Wednesday, February 5, 2014

Does Government Subsidize Job-based Health Insurance? Why Yes.

Republicans like a free healthcare market and tax subsidies. Democrats like
regulated healthcare markets and tax subsidies plus taxes. Result? The
Democratic plan covers more Americans. Is that what this is all about? Maybe.

Both Democrats and Republicans have long supported, in bipartisan fashion, the tax exempt status of health-related benefits. Businesses that compensate their workers, in part, by providing free or reduced-cost health insurance are the rule, not the exception. Most Americans have, since World War II when the benefit was first instituted, afforded their health insurance in this manner.

Since this practice has cost the government billions upon billions, likely trillions, of dollars in tax revenues, it must count as one of the biggest government giveaways of all time.

So why don't conservatives scream bloody murder about it? Probably because it would be political suicide to attempt it. President John McCain attempted it during the 2008 campaign. How'd that work out?

McCain proposed to end the tax-exempt status of healthcare benefits, which would then be partially offset by tax credits. He and his campaign spent an awful lot of time explaining how it wasn't a tax increase. More germane, you don't hear conservatives offering to revoke the tax exemption anymore. Perhaps because of what happened when President McCain last proposed it.

Both Republicans and Democrats, then, support the idea of using taxes to support Americans getting healthcare coverage. So today's never-ending continuing debate over Obamacare must be about regulating the insurance market, not subsidizing it. Oh, and taxes.

Eric, here's the deal. 35% of Americans would rather die than pay more
in taxes. That's our base. The problem is finding another 16% who agree.

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