…Sen. McCain’s plan does include one new proposal that would result in higher taxes on the middle class. As even Sen. McCain’s advisers have acknowledged, his health-care plan would impose a $3.6 trillion tax increase over 10 years on workers.
Sen. McCain’s plan will count the health care you get from your employer as if it were taxable cash income. Even after accounting for Sen. McCain’s proposed health-care tax credits, this plan would eventually leave tens of millions of middle-class families paying higher taxes. In addition, as the Congressional Budget Office has shown, this kind of plan would push people into higher tax brackets and increase the taxes people pay as their compensation rises, raising marginal tax rates by even more than if we let the entire Bush tax-cut plan expire tomorrow.
I really couldn’t believe it. As someone who’s more radical than Bush on cutting taxes, I couldn’t believe McCain would actually be proposing this. Since the article was written by people from the Obama camp, I thought they must be distorting the truth. So I looked and sure enough, this is EXACTLY what he’s proposing. In fact he even clarified this in a press conference. McCain’s own words:
Afterward, McCain explained to reporters: “The employer tax deduction stays in place so the employer still has the incentive to provide health insurance to the employee, but the employee now loses the health tax incentive and it is replaced by the refundable tax credit.”
Are you kidding me? I mean I’m speechless, really. I am now going to have to pay taxes, each check, out of pocket, wait until my tax refund to get the money back…hopefully.
Under the plan, employees who have employer-provided health insurance would be taxed on the portion of their coverage that their employer pays. Aides say those costs would be offset by providing tax credits of $2,500 to individuals and $5,000 to families. They said low-income and middle-income people would benefit from the changes the most, while people in the top tax bracket and whose employers pay $15,000 or more of their health insurance costs would break even or pay higher taxes.
On top of this assinine tax increase on lower and middle income citizens, those who file a 1040EZ (the majority of lower income and middle income household, and a favorite of those who don’t need to itemize), this on who can file a 1040EZ:
You do not claim an education credit, retirement savings contributions credit, or a health coverage tax credit.
So either hire an accountant, itemize and file a 1040, or pay taxes on your health care. I’m sure most low income households have their accountant on speed dial for just such situations.
This is a ridiculous proposal. Wonder what all those anti-tax McCain supporters think about this policy!!