McCain's 3.6 Trillion dollar tax increase.

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McCain's 3.6 Trillion dollar tax increase.

Post by SirNitram »

WSJ

Op-Ed, so skipping to the relevent bit.
In contrast, Sen. McCain's tax plan largely leaves the middle class behind. His one and only middle-class tax cut -- a slow phase-in of a bigger dependent exemption -- would provide no benefit whatsoever to 101 million families who do not have children or other dependents, or who have a low income.

But 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.

The McCain plan represents Bush economics on steroids. It has $3.4 trillion more in tax cuts than President Bush is proposing, largely directed at corporations and the most affluent. Sen. McCain would implement these cuts without proposing any meaningful steps to simplify taxes or eliminate distortions and loopholes. In addition, Sen. McCain has floated over $1 trillion in new spending increases but barely any specific spending cuts.

..

In contrast, Sen. McCain has put forward the most fiscally reckless presidential platform in modern memory. The likely results of his Bush-plus policies are clear. As Berkeley economist Brad Delong has estimated, the McCain plan, as compared to the Obama plan, would lower annual incomes by $300 billion or more in real terms by 2017, costing the typical worker $1,800 or more due to the effect of large deficits on national savings and thus capital formation. Sen. McCain's neglect of critical public investments would further impede economic growth for decades to come.
McCain, in Aspen today.
When Isaacson said the proposal would have to be on the table to be negotiated off the table, McCain drew a smattering of laughter when he said “I have to be against tax increases, as you know.”
Says it all.
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Post by Erik von Nein »

So, wait, if the Op-Ed is accurate McCain is planning on cutting taxes to corps/wealthy/whatever by 3.4 trillion while his idiotic healthcare plan would need/cause an increase of 3.6 trillion in taxes on anyone receiving healthcare from employers?

*facepalm*
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Post by Darth Wong »

Erik von Nein wrote:So, wait, if the Op-Ed is accurate McCain is planning on cutting taxes to corps/wealthy/whatever by 3.4 trillion while his idiotic healthcare plan would need/cause an increase of 3.6 trillion in taxes on anyone receiving healthcare from employers?

*facepalm*
As if this is a surprise.
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Post by Erik von Nein »

It's not, really, it's just so obviously stupid.
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Post by Imperial Overlord »

Darth Wong wrote:
Erik von Nein wrote:So, wait, if the Op-Ed is accurate McCain is planning on cutting taxes to corps/wealthy/whatever by 3.4 trillion while his idiotic healthcare plan would need/cause an increase of 3.6 trillion in taxes on anyone receiving healthcare from employers?

*facepalm*
As if this is a surprise.
Only the magnitude is surprising. You would think the giant precipice looming in front of them might have at least convinced them to slow down wrecking the country, but obviously by considering them to be evil, selfish lying bastards I was giving them too much credit.
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Post by Glocksman »

It is accurate as the little known centerpiece of the McCain healthcare 'platform' is stripping the tax breaks employers and employees get WRT employer provided health insurance.

What a lot of people don't realize is that McCain's $5000 tax credit pays for less than a third of the cost of decent health insurance for a family.

His health insurance 'reforms' are among the reasons that moved this former conservative to back Barack Obama.
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Post by Uraniun235 »

Sen. McCain's plan will count the health care you get from your employer as if it were taxable cash income.
Who conceived this... this obscenity?
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Post by SirNitram »

Uraniun235 wrote:
Sen. McCain's plan will count the health care you get from your employer as if it were taxable cash income.
Who conceived this... this obscenity?
I'm sure if you check, a lobbyist on McCain's campaign works for the healthcare industry.
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Post by Aratech »

Cripes... I know the guy said he knew next to nothing about economics, but this takes the cake. Is anyone else filled with a sense of impending financial doom?
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Post by acesand8s »

SirNitram wrote:I'm sure if you check, a lobbyist on McCain's campaign works for the healthcare industry.
What would they care if they get paid by tax-exempt or taxable income? They get paid either way. I mean, this is just cliche maniacal-laughter-and-mustache-twirling evil. Even my hardcore Republican, voted-for-Bush-twice roommate thinks this is crazy.
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Post by SirNitram »

acesand8s wrote:
SirNitram wrote:I'm sure if you check, a lobbyist on McCain's campaign works for the healthcare industry.
What would they care if they get paid by tax-exempt or taxable income? They get paid either way. I mean, this is just cliche maniacal-laughter-and-mustache-twirling evil. Even my hardcore Republican, voted-for-Bush-twice roommate thinks this is crazy.
I'll break this down.

Health insurance costs spike even further = Less people getting preventative care.

Less preventative care = More problems.

More problems = More hospital visits or more expensive treatments.

Treatment and the like is always going to be more expensive, and likely also more profitable, than preventative care.
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Post by The Yosemite Bear »

no shit 28 grams of prevention = .5 kilos of cure.

sorry I guess the GOP has slipped into cartoon evil some more....
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Post by Fingolfin_Noldor »

Apparently, McCain is determined to bankrupt the United States.
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Post by Glocksman »

SirNitram wrote:
acesand8s wrote:
SirNitram wrote:I'm sure if you check, a lobbyist on McCain's campaign works for the healthcare industry.
What would they care if they get paid by tax-exempt or taxable income? They get paid either way. I mean, this is just cliche maniacal-laughter-and-mustache-twirling evil. Even my hardcore Republican, voted-for-Bush-twice roommate thinks this is crazy.
I'll break this down.

Health insurance costs spike even further = Less people getting preventative care.

Less preventative care = More problems.

More problems = More hospital visits or more expensive treatments.

Treatment and the like is always going to be more expensive, and likely also more profitable, than preventative care.
True, but if less people carry insurance due to the cost, the health insurance industry actually loses out under the McCain 'reforms'.

IMHO the real beneficiaries of the McCain plan would be the companies who can use it as an excuse to drop employer provided health coverage, and that's the real reason behind the plan.
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Post by SirNitram »

Wouldn't surprise me. Then again, which is more profitable: The cure or vaccine, or the treatment? Big Pharma gets some too.
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Post by PainRack »

SirNitram wrote: I'll break this down.

Health insurance costs spike even further = Less people getting preventative care.

Less preventative care = More problems.

More problems = More hospital visits or more expensive treatments.

Treatment and the like is always going to be more expensive, and likely also more profitable, than preventative care.
Errr... its actually more expensive to treat them too on the part of the healthcare industries.

On the other hand, going in for a quick bloodcheck yearly and a poke here and there is infinitely more sustainable as a money source and doesn't require you to buy so many expensive equipment.
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Post by CmdrWilkens »

Glocksman wrote:True, but if less people carry insurance due to the cost, the health insurance industry actually loses out under the McCain 'reforms'.

IMHO the real beneficiaries of the McCain plan would be the companies who can use it as an excuse to drop employer provided health coverage, and that's the real reason behind the plan.

You would think the Healthcare companies would lose out but you aren't considering WHO is going to drop their coverage. Its going to be the folks who are hurting the msot to begin with, the ones who due to diet, environment, and other causes are more likely to get sick to begin with. Basically rising costs mean the companies get to drop a whole bunch of expensive unhealthy folks leaving them only with rich healthy customers who they don't have t spend money on. This means profit margins go up even as customer base goes down.
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Post by Glocksman »

Interestingly enough, McSame's health 'reforms' were the subject of a piece I wrote for my union local's newsletter last month.

glocksman wrote:As we all know from firsthand experience, one of our big issues with the company during contract negotiations is the cost of health insurance and who pays for it. Under current law, employer provided health insurance is a non-taxable benefit. This means that neither we nor TJ Maxx pay taxes on the money used to purchase health insurance.

The reasoning behind not taxing health insurance is simple: it encourages employers to provide coverage and workers to take the insurance.

John McCain wants to change that and start taxing employer provided insurance.

You are probably asking yourself ‘why?’. The reason why is that he wants to replace employer provided insurance with a $2500 ($5000 for a family) tax credit to enable people to buy insurance on the open market. He claims that this will ‘encourage competition’ and lower costs.

This is not true.

What it will do is force people such as ourselves to pay a lot more for insurance than we currently pay. Let’s look at why it will not work. First off, the cost of insurance exceeds the proposed tax credit by a large margin. For example, the total cost of Welborn HMO insurance for employees of Vanderburgh County* is $503.45/month for single people and $1,510.33/month for family coverage. This works out to $6041.40 per year for a single person and $18,123.96 per year for a family.

As you can see, his proposed tax credit would only pay about 1/3 of the cost and that’s assuming individual families can negotiate the same prices that the county government can. Frankly the odds of you and I negotiating the same prices are lower than the odds of winning the Powerball jackpot, as we do not have the group buying power that large companies and governments have.

When McCain says he wants to "eliminate the bias" towards employer-sponsored health benefits by cutting tax advantages employers receive for offering coverage, it's not hard to guess where it will lead -- a flood of employers dropping their health coverage and pushing their employees into the private market to fend for themselves.

This is NOT unintentional. McCain and his corporate advisers think it is good for individuals and families to pay more because it makes them think twice before seeking health care, and—in theory—they will shop around for cheaper care. And if they can’t cover the costs of real health insurance with McCain’s tax credit, the insurance industry will sell you lower-cost plans with big holes in coverage or costly co-pays—that is, if you are not already sick and you aren’t too old for them to see you as profitable.

Under the McCain ‘plan’, the reality is that millions of working Americans will no longer be able to afford health insurance, and the sick and elderly won’t be able to purchase coverage at any price.

Then again, John McCain doesn’t have to worry about health care himself, as his is fully provided for by the Federal Government and his wife is worth over $100 million.

You and I aren’t multimillionaires and simple reality trumps McCain’s crackpot theories.

To sum it all up, the McCain campaign could use these simple marketing slogans for their plan: ‘Don't Get Sick in America’, ‘Only the Healthy & Wealthy Need Apply’ or ‘You're On Your Own’.
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Post by Questor »

For those who want to know what it costs an employer in the US, granted our benefits are good, but I doubt they are completely out of line:

From the agreement between my employer and our union
9.2 The District shall pay $8,443 per eligible unit member per benefit year unless modified through the provisions of Article 9.2.2. The District’s contribution for health benefits shall be subject to annual negotiation.

9.2.1 The District shall maintain a minimum of four (4) months of claims in the BMB Health Fund.

9.2.2 The District and CSEA agree that reaching agreement on the funding level is a priority. If agreement is not reached by October 1 of any benefit year, and funding to the BMB is not sufficient to maintain the employee benefits proposed by the BMB, then the District shall cover one-half of the shortfall in funding and the remaining one-half shall be divided equally among active employees participating in the plan and paid for by individual payroll deductions. The payroll deduction shall be implemented no later than November 1.
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Post by Glocksman »

Jason L. Miles wrote:For those who want to know what it costs an employer in the US, granted our benefits are good, but I doubt they are completely out of line:

From the agreement between my employer and our union
9.2 The District shall pay $8,443 per eligible unit member per benefit year unless modified through the provisions of Article 9.2.2. The District’s contribution for health benefits shall be subject to annual negotiation.

9.2.1 The District shall maintain a minimum of four (4) months of claims in the BMB Health Fund.

9.2.2 The District and CSEA agree that reaching agreement on the funding level is a priority. If agreement is not reached by October 1 of any benefit year, and funding to the BMB is not sufficient to maintain the employee benefits proposed by the BMB, then the District shall cover one-half of the shortfall in funding and the remaining one-half shall be divided equally among active employees participating in the plan and paid for by individual payroll deductions. The payroll deduction shall be implemented no later than November 1.
My county government has a web page up with insurance costs that I mentioned in the original piece (that's what the asterisk denotes), but did not include it in the post.

It's right here.

Note that Welborn HMO is the cheapest health insurance option for county employees.
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Post by The Yosemite Bear »

Actually health care was the BIGGEST point of arguement between management and the union on our last negotiations that were just concluded a week ago, five months behind the end of our contract. It has been the biggest arguement between management and the union for over ten years now.

so this trick would possibly actually strengthen unions, as we actually do have our own health care buying blocks for members whose employers don't offer them anymore. Pay dues, get health care that will bankrupt you slower...

Ok so he's planning on destroying the rest of the country for the profit of a few...
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Post by Darth Wong »

This is all consistent with the general economic conservative platform, as described by Glenn Beck. These people want to take away any programs intended to make things easier for people who have "failed" at life, by which they mean "are not rich".

In their perverse value system, this is about "fairness". But of course, they have an enormously selective view of "fairness"; the entire capitalist system is arranged in such a manner that life opportunities are enormously different for a rich person than a poor person; this kind of unfairness does not seem to bother them at all. They certainly don't seem to lose sleep over it.

But the idea that the rich might pay a proportion of national tax revenue greater than their percentage of the population: that is unacceptably unfair! And if you have to strip away all of the social programs that make life bearable for the lower and middle class in order to reduce the tax burden on those oh-so-downtrodden rich people, then so be it!
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Post by Patrick Degan »

The Yosemite Bear wrote:no shit 28 grams of prevention = .5 kilos of cure.

sorry I guess the GOP has slipped into cartoon evil some more....
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Post by K. A. Pital »

John McPain is a fitting name indeed.

McCain's indeed not just McSame - it's Bush "Economics" and "Pooh-litics" upgraded.

I fear to think how McPain could upgrade Bush's disaster of a foreign policy, and what his election will signify for the judicial branch of the US - I heard he'd be lobbying hardcore conservatives into judge positions even more than Bush, isn't that right?
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Post by Starglider »

I find it vaguely amusing that no one here has even mentioned the theoretical justification for this; that employers dropping healthcare benefits will enable significant pay rises, which will then cover the cost of private insurance. No one has mentioned it because it's blatantly implausible; virtually all US employers will just treat it as a way to (significantly) cut effective salaries. But on die-hard conservative forums, the rhetoric about 'enabling choice' and 'the efficiency of market forces' will continue in complete denial of this fact.

The people trying to make a case for preventative treatment being in the interests of the healthcare industry are being hopelessly optimistic. The ideal condition for profit maximisation is a nasty chronic condition that can be staved off only with expensive treatments, such that the patient has to plow all their income into healthcare over a period of a couple of decades or so. Ideally they will eventually die with a negative net worth, including sucking as much cash as possible from relatives as well. Thus die-hard Randians will invest in both tobacco companies and cancer treatments.

Of course this is all ok in Libertarian eyes because if people were intelligent enough to demand good cheap preventative care, the market would provide. If they're not intelligent or educated enough to do that, or if they can't afford regular check-ups when they're struggling to make the rent, well that's all their own fault of course.
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