The allegedly centrist Senate Finance health care bill partially pays for reform by taxing expansive insurance plans. The original allegedly left-wing House bill raises revenue with a income surtax on the uber-wealthy. Guess which one is incredibly unpopular with the American middle?
Two polls in two days -- the ABC/ W. Post poll and the USA Today/Gallup poll -- found widespread rejection of the insurance tax, a whopping 61%.
Meanwhile, Gallup found 59% support the income surtax on the wealthiest households. It's pretty clear where the actual political center is.
Yet, so-called congressional centrists are resisting the income tax on the wealthiest and pushing the insurance tax, which would fall on some middle-class households.
Why is this so? (Besides the general political fear of offending wealthy voters in home districts.)
As the Center for Budget and Policy Priorities argues, the tax would drive down the overall cost of health insurance by providing a disincentive to offer expansive insurance plans. CBPP also contends that most households would not end up paying the tax directly, because they would instead get less expensive health insurance, and in turn, higher wages.
But as CQ noted today, employees get health benefits tax-free, while wages are not tax-free. Plus, the increase in wages will be very uneven, and could be used to shift more health insurance costs back onto workers.
Of the $201.4 billion the excise tax would generate, $37.8 billion would come from the excise tax itself. The rest would come from income and payroll taxes generated from higher wages. Workers who receive higher wages would also get more money from Social Security when they retire.But there are limits to those potential wage gains. They may vary by industry and region, depending on competition for workers. And, because many high-premium health care plans have relatively low co-payments and deductibles, employers may get around the excise tax by requiring employees to use some of their after-tax money to pay for health care.
Some folks may come out ahead on this deal, but some won't. The issue may be more complicated than a simple poll question can capturee, but you can't rebut by saying no middle-class families would be adversely affected.
It would be one thing if the insurance tax was the only way to get health care reform. But it isn't.
There more popular ways to save money, like a robust public option.
And there are more popular ways to raise money, like an income surtax on the wealthiest Americans.
Both would be the centrist way to go.
Originally posted at OurFuture.org.
Follow Bill Scher on Twitter: www.twitter.com/billscher
"America’s Health Insurance Plans (AHIP) is the national association representing nearly 1,300 member companies providing health insurance coverage to more than 200 million Americans."
http://www.ahip.org/content/default.aspx?bc=31
Let's make a couple of assumptions
1. Some of these are regional carriers and HMOs. So that a particular plan offered in Lincoln, Cheyenne, and Denver would not be available in Boise.
2. Lets be cautious and assume that of the 1300 nation wide providers, at any given location only 600 choices would be available.
The only justification I've heard for the Public Option is that it is needed to promote competition. Without the public option, the proponents claim, there will be no competition. Well, let's see how effective it would be.
1. I live in a state where 21 companies are licensed to offer healthcare insurance.
So that means that I could now can choose between 22 sources. That's about a 5% competitive increase.
2. Instead of a public option, suppose that the Federal Anti-Trust Exclusion for insurance companies were lifted, and federal law stated that no state can bar a recognized insurer from offering insurance. From my current 21 companies, I would be able to chose from any of the approximately 600 recognized health insurance providers. That is about a 2800% competitive increase.
Ah, excuse me. Tell me again, why do I want a public option to lower costs by increasing competition?
Secondly, while I'm all for removing antitrust exemptions, I wouldn't gain a thing from the introduction of hundreds more private insurance companies who are all likely to drop me if I need coverage. That is not a meaningful choice - the only meaningful choice in that situation is between being scammed by an insurance company, or to not have health insurance and hope I never get cancer.
I'd like a health insurance choice that functions, please. Just one will do.
-Top 1%-
Income Split Point = $410,096
Share of Income taxes = 40.42%
Source: Internal Revenue Service
http://www.taxfoundation.org/news/show/250.html
The top 1% of taxpayers, those earning more than $410K, account for over 40% of the income taxes that are paid. That sounds pretty fair to me.
As you can read on this very site, Warren Buffett pays a lower tax rate than his janitor - and probably you and I, too.
No, You are wrong. The number is 22.8%
Total National AGI = 8,798,500 Millions
1% AGI = 2,008,259 Millions
8,798,500 Millions / 2,008,259 Millions = 22.83%
If Buffet pays little or no tax, there are enough 1%ers who pay alot of tax such that the average rate for the 1%ers is 22.45% - the highest average tax rate for all groups.
Same refernce cited in original post.
Not only are capital gains taxed at a preferential rate, but any capital gains on mutual funds are automatically given the best possible rate (presently, 10%).
America's taxation system is not progressive anymore. It is progressive only so long as your wage continues to increase. Once other forms of compensation are taken into account, and more importantly once you are wealthy enough to hold significant capital assets, taxation in fact becomes regressive. Your very source notes that the top .1% pay a lower tax rate than the top 1% do.
More on those other forms of compensation. Not only are non-monetary forms of compensation, such as health care and stock options, not taxed, they do not even count as income according to the IRS. So if I make a million dollars and then am given the ability to make another million dollars buying discounted stock, then when someone like you looks at what should be a trustworthy source, you only see 50% of what I'm actually making.
Furthermore, if you'll note, your source considers adjusted taxable income, not actual income - many tax deductions apply to reduce taxable income before it's even considered AGI. So that 50% figure could easily be even lower - and then I pay what seems to be an equitable rate on that fraction of my actual income.
So even your statistics, which still demonstrate clearly regressive taxation for sufficiently wealthy individuals, exclude a great deal of effective
I wonder how much of that 39% hold a similar view.
None of the bills cut cost like people want.
____________________
AN HONEST ASSESSMENT OF AMERICA FROM DENNIS KUCINICH
The political system is failing the American people. Money for Wall Street, not for Main Street. Money for War, not for Peace. Money to move jobs out of America, not to create new jobs here. Money for insurance companies, but what about the people?
Insurers wield enormous influence to knock a public option out of the Senate Finance Committee health care bill!
While 47 million uninsured wait for an answer, and another 50 million underinsured stand by, Americans are losing their jobs, their homes, their health care and their retirement security. How long can people wait for help?
We must give STATES the Option for single-payer in the health care bill to meet the broad based health care needs of the American people.