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Change is good when the way things are isn't working and the new direction is an improvement upon the old. That is true at the individual level as well as society; being open to internal change, an alteration in our own personal behavior or opinion, is important to growth. If you've never changed your mind about anything you've never thought about anything.

But sometimes it's just funny. In the past two years, have we really pulled a 180 on taxing benefits? Did we go through some process of education and discovery to realize that, hey, actually, McCain was on to something?

Or are pronouncements about this simply floating in the wind, rooted in few (if any) underlying policy principles and political strategies? For disclosure on myself, you can read what I think generally about raising taxes here and specifically about taxing benefits here.

The rest of this diary is just to memorialize in one place a few comments other people said back when not taxing health benefits was the 'liberal' 'Democratic' 'reality-based' 'fair' 'pragmatic' 'sane' thing to do.

On February 21, 2008, Seth Michaels posted this on the afl-cio blog in a post entitled McCain’s Health Care Plan: Higher Taxes, Less Coverage

Democratic Sens. Hillary Clinton (N.Y.) and Barack Obama (Ill.) have proposed solutions to the nation’s health care crisis that would go a long way toward addressing the needs of working families. (You can download a side-by-side comparison of the presidential candidates’ health care plans here.) Yet, the Republican presidential frontrunner, Sen. John McCain (R-Ariz.), is backing a plan that would make health care even more out of reach for most of us.

McCain is pledging “no new taxes,” but his own health care plan might represent a massive tax increase for working families, according to the Tax Policy Center and the Kaiser Family Foundation.

On August 14, 2008, James Kvaal posted a piece at Think Progress' the Wonk Room entitled McCain’s Plan To Tax Health Insurance that included the following:

Actually, considered as a whole, McCain’s plan will raise taxes on millions of workers for two reasons. First, his plan would tax workers’ health benefits, which are largely tax-free today. Although he also creates a new tax credit for insurance premiums, many workers will pay more in taxes on their insurance then they get from the new credit.

Second, the value of McCain’s credit will erode quickly. While health care premiums are expected to grow by 7 percent a year, McCain’s credit will increase by only about 2 percent a year. In contrast, current tax benefits keep up with rising premiums.

On September 11, 2008, Kevin Drum explained the math at Mother Jones in Healthcare, McCain Style

Except there's some fine print hidden where McCain hopes no one will see it: his tax credit increases each year only by the normal inflation rate. Your premiums are going to increase way faster — probably around 6-8% per year. That means your taxes are going to go up 6-8% per year too. The chart on the right, courtesy of CAP, shows the gory details: the tax credit doesn't keep up with the increase in tax payments. In other words, your taxes go up.

On September 12, 2008, Meteor Blades headlined a diary at Daily Kos called McCain Distorts and Twists on Taxes, Says Obama

Senator Barack Obama in Dover, N.H., September 12:


"[McCain's] plan gives absolutely nothing to about 100 million American households. I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.

   And my opponent can't make that pledge, and here's why. For the first time in American history, John McCain wants to tax your health-care benefits. Apparently, Senator McCain doesn't think it's enough that health care premiums have doubled, he thinks that you should have to pay taxes on them, too. That's a $3.6 trillion tax increase potentially on middle-class families. And that would eventually leave tens of millions of you paying higher taxes or losing your benefits. That's his idea of change.

On October 2, 2008, Matt Ortega highlighted a local editorial on in Editorial Rips John McCain's Plan for Healthcare

The latest Concord Monitor (NH) editorial ripped John McCain's 'plans' to "blow up" the current healthcare system that would leave far fewer Americans with insurance.


McCain would blow up the current system and ensure that fewer Americans are covered. He wants to eliminate the tax deduction employers get for providing health insurance. Instead, he would give tax credits to individuals and families to make it easier for them to purchase insurance on what he believes will be a new, bigger open market that will compete to lower health care costs. The credits would be $2,500 per individual and $5,000 per family.

   There are more components to the McCain plan - portability of insurance from state to state, for example - but none would offset the enormous damage his on-your-own in a wide-open market approach would do.

On October 4, 2008, John Aravosis at Americablog put up a pointed summary in AP: McCain to tax your health benefits

McCain wants to raise taxes on every working American and make you pay taxes on your health benefits. Wow.


That's gonna go over well.

Also on October 4, 2008, Greg Sargent's headline at TPM said it all with Obama Ad Attacks McCain Health Care Plan: "Largest Middle Class Tax Hike Ever"

The Obama campaign is opening up a major new offensive against McCain on health care that includes a forceful speech today denouncing McCain's plan as "radical," as well as a blitz of ads like this new one: [see link for video]

On October 6, 2008, Mike Link posted this notification on the SEIU blog under New Ad: SEIU Members Make Health Care Deciding Issue For Uncommitted Voters

Today, SEIU announced a new, multi-state television and field campaign aimed at targeting undecided voters in the final weeks of the presidential election with information on the difference between the Obama and McCain health care plans.


Beginning Monday, SEIU will begin airing a new television ad, titled "Worried Sick," in two battleground states. The ad underscores the deep concerns working families have about health care - and how John McCain's health care plan would make a bad problem worse by taxing health benefits and denying coverage for pre-existing conditions. In addition to the ad, SEIU is engaging voters directly in battleground states across the country: [see post for video]

More recently, on July 20, 2009, Sam Youngman wrote at The Hill in Obama threatens veto over McCain healthcare plan

President Obama said in an interview Monday afternoon that he would veto a healthcare reform bill that mirrored Sen. John McCain’s proposal from the 2008 presidential campaign.

On PBS's “Newshour with Jim Lehrer,” the president noted that McCain (R-Ariz.) “proposed to eliminate completely the exclusion on the taxation of health benefits.” McCain proposed taxing all employer-provided health benefits in exchange for a tax credit taxpayers would receive to buy insurance.

“I had said that this would be the wrong way to go because it would be too disruptive. Essentially employers would stop providing healthcare,” Obama said.  “John McCain had suggested everybody gets a tax credit, but the concern was that the tax credit wouldn’t be sufficient to actually buy health insurance on the market. So I am still opposed to that and would veto a bill if that was the approach.”

And then yesterday, January 15, 2010, Rachel Slajda wrote at TPM in Pelosi: 'There Are Absolutely No Sticking Points' On Excise Tax Deal

She admitted that the Cadillac tax, or excise tax, had originally been "overwhelmingly rejected" by the House.

But, she said, "We received the good news that there had been some accommodation arrived at by the White House because this was something the President wants to have in the bill in principle and he will."

"I think the principle is preserved but working families and middle class in our country will not feel the negative impact that we feared," Pelosi went on, adding, "That was very well received by our members."

So what's changed? And why are we now talking about exemptions and thresholds and other loopholes to the loophole? If taxing benefits is beneficial, then let's tax them. If we don't want to tax benefits, then let's exempt them from taxation. If radical tax ideas are now on the table, well, then let's actually radically alter the tax code, returning it to a simpler, more progressive form.

Am I the only one who finds this whole process rather humorous?

Crossposted at The Seminal at FDL.

Originally posted to washunate on Sat Jan 16, 2010 at 03:24 PM PST.


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