Obama's Looming Health Care Disaster: Looking for Love in All the Wrong Places
"For the first time in American history, he wants to tax your health benefits. Apparently, Senator McCain doesn't think it's enough that your health premiums have doubled. He thinks you should have to pay taxes on them, too." -- Barack Obama, September, 2008
American working people desperately want President Obama to succeed. They certainly do not expect him to break his word on taxing worker health benefits. It's one thing to break a promise. It's quite another to increase taxes dramatically on the very people who most believed in your words, while at the same time letting the wealthy off the hook.
I've come across increasing disillusionment among workers like those at Verizon. They supported Obama in large part because they wanted to protect their excellent health care benefits, something they are very proud of. They should be. They have the kind of plan everyone should have -- full coverage, low deductibles, dental, prescription drugs, and mental health coverage. Their middle-class lives are not economically threatened by illnesses or accidents.
These benefits did not fall from the sky or from the generosity of their employer. Verizon workers won these benefits by uniting with each other and with their union, the Communications Workers of America. They fought a series of strikes over the past three decades (with Verizon and with the companies that preceded it) to secure their benefits and to hang onto them against stiff company assaults. They have no intention of giving them up.
These workers also provided rock solid support for Obama, including his call for health care reform so that all working people one day could enjoy similar coverage. In fact, for these workers one of the key distinguishing points between Obama and McCain centered on the taxing of health care benefits. They felt enormously threatened by McCain's health tax proposals, especially since the cost of many of their excellent plans can exceed $20,000 a year per active member and even more for retirees and their families. Counting those benefits as taxable income would amount to an enormous tax increase for these workers, and their union made sure they understood this point during the campaign. In fact, labor unions all over the country distributed millions of pieces of campaign literature and made tens of thousands of phone calls to drive this point home.
Now these workers are hearing that Obama is open to a tax on these benefits to help pay for health care reform. The very mention of this tax has already weakened support from these workers and sapped their enthusiasm to fight back against Obama's opponents.
Yet, team Obama led by Rahm Emanuel seems incredibly out of touch with this reality. In their desperate effort to find revenues for their national health care proposals, they are "pivoting" as they signal a willingness to consider taxes on the better, more expensive health insurance benefits. If the administration continues down that path, Obama will lose these workers, now and forever. They probably won't vote for the Republicans in the mid-term elections, but they might sit it out or fail to campaign vigorously for Democrats.
Because the administration has put its entire reputation on the line to get this bill passed, a version of this tax might slip in. And if it does, you wouldn't be paranoid to view it as a poison pill ploy by Republicans to undermine Obama for the rest of his presidency.
These workers have an intuitive understanding that they are being asked to pay precisely because Obama seems unable to tackle the wealthy and their Blue Dog Democratic defenders. These Democrats don't want to stop the sky-high salaries on Wall Street or to interfere with its windfall profits, even after these same profiteers crashed the system. Working people clearly see that we have bailed out Wall Street with more money than it will take to fund health care over the next ten years. Yet, the administration is unwilling to tap the wealthy to pay for it, even when there are several ways to do so. If Obama wants health care reform while maintaining the support of his staunchest working class supporters, he should consider the following:
1. Increases taxes on those who have adjustable gross incomes of over $1 million a year. According to 2007 tax documents, there were about 400,000 such returns. They paid an average of 22 percent of the gross adjustable income in taxes. If we put a 10 percent health-care surcharge on these wealthy taxpayers, (raising the effective rate to 32 percent) we would collect an additional $140 billion per year. And not one of these taxpayers would suffer any hardship since they would still be extremely rich by any reasonable standard. Also, it would be more than fair since most of these millionaires made a killing during the fantasy finance bubble and are making money again because we bailed out the financial sector.
2. Place a 90 percent windfall tax on Wall Street profits and bonuses. Profits are returning to the "too big to fail" firms, starting with Goldman Sachs and JP Morgan Chase. They are making money again because we bailed out the entire financial sector, guaranteed toxic assets, provided liquidity free of charge, changed the accounting standards, and got them repaid from AIG at par value. If people like Andrew J. Hall are permitted to receive $100 million in bonus payments from CitiGroup, a bank we basically own, then 90 percent should be taxed back to us. These firms and their stars owe us, big time. No worker will be able to understand why his or her health care is being taxed while the elites on Wall Street walk off with tens of millions in taxpayer dollars.
3. Install a very small tax on each and every financial transaction on Wall Street. Everyone else in America pays some kind of sales tax on their purchases, why not Wall Street? This kind of fee would generate at least $50 billion a year. This would also have the important benefits of stabilizing the economy in the long term, reducing the risk of future bursting bubbles, by slowing down speculation as well as moving money out of the bloated financial sector and into the real economy. (Of course this would need to be an international tax agreed upon by the G-20 nations to make sure countries don't game the tax.)
These three measures would generate more than enough revenue to pay for universal health care, while also generating enthusiastic support from the Verizon workers and the millions of others with decent health care benefits.
Like a good basketball player, President Obama knows how to pivot. Like a good politician he also should know when to pivot and in what direction. But if he pivots towards taxes on health care benefits, he'll find himself alone on the court with a bunch of blue dogs and bankers as teammates, while his working class fans walk away in disgust. Even more importantly, his real team needs to see him take on the big boys... and soon.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.
Follow Les Leopold on Twitter: www.twitter.com/les_leopold
Miles J. Zaremski: The Moral Imperative: Health Care as an American Right
However we look at health care, one thing is certain: health care is universal to each and every human being in this country, regardless of power, position, gender, race or ethnicity.
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Obama’s health-care promises are being exposed by the details of the actual legislation, and we WILL see costs rise. Support the goal of covering all individuals through private health insurance! http://www
Why not just tax everybody at 100% and give everybody their "fair" share.
It's not like people will decide to stop working and making lots of money just because they don't get to keep it. I am sure they will continue to work even though they could make the same money doing nothing.
Better yet, just pass HR-676 already.
Good grief!
Bingo MEDICARE FOR ALL....and a health care surtax of 15% on ALL INCOME over $100,000..
"2. Place a 90 percent windfall tax on Wall Street profits and bonuses."
Sweet, add to that of course the NY State tax of 8.97 for > $500,000 and the NY City tax rate of 3.2% for > $90,000; you wouldn't want to skip on paying your other required taxes.
90 + 8.97 + 3.2 = 102.17%. If you make a profit, we'll take all of it away; and then some.. that'll teach you what happens to companies that make money.
Hey, lets do this for all industries. 102% tax on all profits across the board.
What? It wont hurt the economy you silly fools; small business owners will still work just as hard even if they're never paid again; and in fact are punished for ever making any money. Its economics.
Admittedly I never studied economics; but I'm pretty sure a 102% tax rate won't hurt anything. Otherwise why would anyone propose such a thing?
In the 1950s the marginal tax rate for those earning over $1 million was 90 percent. The sky did not fall. In this case I. \'m only talking about reclaiming the windfall profits of a few firms like Goldman Sachs and JP Morgan Chase. They "earned" their profits because of our AIG bailout, all kinds of low interest loans and asset guarantees, changes in the mark-to-mark rules, the elimination of their competition, and our general bailout of the entire sector. It's hard to make the case they produced any economic value at all. A windfall tax is just not that outrageous under those circumstances.
I've never understood why their isn't some kind maximum wadge for CEO's, and other high paid members of companies including their bounces. It's would not need to be a hard set number, rather it would be a formula. Something like:
max pay(M) must be less than or equal to twenty times the average pay(A) of all company employees. M ≤ 20A
So if A = 50,000 per year then M= 1,000,000
If the CEO wants to make more money personally then he need to raise the average for all other employees.
I have never understood why their is no maximum wadge law for CEO's and other highly paid company executives. A max wadge law wouldn't be a hard set num but rather a formula such as.
Max pay, including bonuses, (M) must be less than or equal to, let's say, twenty times the average pay(A) of all other employees.
or
M ≤ 20A.
So if A = 50,0000 per year, then M = 1,000,000
So if a CEO wants to earn more money personally he would need to work towards raising the average pay for all other employees.
P.S.
Please do approve my other post full of typos and bad grammar. I meant to hit preview not post.
A million dollars in the 1950s was worth a lot more than a million dollars now. Another word for confiscation.
"Place a 90 percent windfall tax on Wall Street profits and bonuses."
OMG hahahahaha
roflmao
Obama and the Democrats could pass strong BIPARTISAN health-care bills, WITH a public option,
in both houses of Congress tomorrow -- all they need to do is throw the Republicans a bone by proposing a 5% cut in capital gains taxes over the next five years.
Sound too simple? The Republicans are utter, shameless whores, and cuts in capital gains -- which benefit only the rich -- is their Holy Grail. There may have to be a bit of haggling over the final percentage and term of the cuts, but they won't be able to resist it any more than flies can pass up a pile of dung.
What's so wrong about just taxing the rich? They can take it. I hear my Republican relatives moaning and groaning about havng to pay more taxes while they sit on the beach in Spain for a few weeks every winter and then fly off to their mountain cabin to take in a little skiing before they have to get back to their ocean front home in Santa Barbara. Jeesh. I'm working my butt off just to stay afloat!
Our hearts and prayers are with the Kennedy family. They and our nation has suffered a great loss. The greatest tribute would be for all of us to continue to be pro-active in our fight to get universal health care.
If we make a simple change in the way the government manages the 1/2 billion square feet of office space used by its two million workers, we could quickly save over 100 billion dollars per year. Most of this space is used by white collar workers and it goes unused 70% of the time. Adding just a second shift for white collar jobs could cut the cost by up to 50%. Wouldn't it save enough money to pay for universal health care. Wouldn't it also reduce the carbon footprint of the government by 30% to 50%.
For details go to:
http://whi
The fact that 50 million of our friends, neighbors, and relatives do not have health coverage is a human tragedy. See www.whitec
Please post a comment if you do not think this will work or send me an email @ hotmail.co
Taxing profits only hurt those that own stocks, which in today life is anyone who has retirement plans at work or many small business owners and individuals that have personal plan for retirement. I also know that many elderly people who were willing to take to responsibility of prepare for the future have bought stocks as nest egg, so taxing profits will hurt them by taking the security they’ve been saving for. Why do people think that profits are bad when profits do so many good things? Profits give grandparents and parents security for all sorts of things retirement, insurance, travel, and sending children to college. Some profits are used as incentives for employees as profit sharing or to reinvest in the company.
A 1% transaction tax is hardley a massive burden on the market, especially when you consider that it keeps a system of government alive that bails them out in total when they fail. Such a Deal !
It's always not much when it is someone elses money!
It will not keep the system alive it will hurt it more....th
You folks just do not get it! Income redistribution, something for nothing! Do they get a refun if they lose on the transaction?
I just signed a petition demanding that the U.S. Congress allow a public option.
Click here to sign: http://bit
2. Place a 90 percent windfall tax on Wall Street profits and bonuses.
Translatio
What is being considered is a one penny tax per share per transaction. Hardly a 90% tax. If that penny tax leads to an increase in unemployment, something is very wrong with the financial stability of this nation.
Look what happened under the republican presidents over the last 30 years, TRILLIONS and TRILLIONS OF dollars of debt, cut the tax rate for the wealthy and what happened to JOBS and WAGES....T
You should be ashamed of your selves! Don't everybody in America deserve religious freedom? Don't everybody reserve a firm financial system? Don't every American deserve health care? NO not insurance, that just for those who have not seen how their system works. The Republicans and the Democrats should all be thrown out of office, Lobbyists are deciding our childrens future! The campaign of lies any bull$hit have turned some against care for everyone! What wrong with a public option? Just because lobbyist don't like it don't mean its wrong, after all they are protecting their way of life not ours!
why not fix tort reform 1st, we have 55Of the worlds population and 45% of the lawyers. Trial lawyers add $500B a year to health care expense. Yet because they are the biggest contributors to barack and the dems he took it off the table
There's truth in what you say but this tends to be a double edge sword. I really don't want someone standing over me with a scalpel that is totally insulated from economic retribution in the event of a slip !
Never Happen. Lawyers are the problem. Thing is, they better concede because if we ever go nationalized and the Doctors are paid by the government and insurance is all through the Government they won't win a single case. Imagine them trying to get huge settlements from the Fed Govt! HA!
On your three points I respond... 1) YES, 2) YES YES, 3) YES YES YES!
Anyone who votes to tax health care benefits will be looking for a new job next year. Obama’s immediate jump to the center has cost him his relevance. The selection of Wall Street insiders Geithner and Summers and giving in to Wall Street was strike one. His support for continuing the Wars, protecting the War criminals and continued massive defense spending was strike two. Now his complete collapse in the health care debate is strike three. The republicans have kicked his teeth in and all he could do was smile, call for bipartisanship and offer to sing Kumbaya with them in the Rose Garden. When we desperately needed a tiger we got a pussycat.
Fanned and faved!
Agree, agree, agree! I'm feeling seriously punked over this.
This taxing health benefits is a Republican tactic! They've been trying to tax health benefits for decades.
For Obama to consider doing this is mind boggling. It's a betrayal of Democratic party principles.
I'm beginning to wonder who is this guy we worked so hard to get elected? Who will give us relief from the Compassionate Conservatives??
The Democrat Party has always been a volatile mix of various special interests that requires a strong leadership to keep the party on course. Unfortunately we haven't had any strong leadership in a long time which leads to situations where a small minority group (i.e., Blue Dogs) end up being the tail that wags the dog. I recently found a political rant on YouTube by Air America's Mike Papantonio that pretty well sums up this situation:
http://www
You know your party's in trouble when one of their biggest media supporters points a critical finger.
Part of normalizing the health care market has to be either giving EVERYBODY who buys health insurance the same tax break or if they can't extend the exemption to everyone then they should eliminate it. It is not fair that I buy a private policy and have to pay taxes on the money I use to do that. Meanwhile the worker who gets their coverage as part of their compensation from their employer gets a tax freebie. Earnings which are magically hidden so the uninsured and private market purchasers bear the burden for this unfair tax loophole. This unfair tax law is a big part of why health insurance is SO screwed up. Bad tax law = broken insurance market.
Hear, Hear!!! I'm tired of subsidizing wage slaves. Self employed and freelancers are the most efficient part of the economy so why are we taxed more...inc
The other thing is that many people aren't supporting health care reform because they are insulated from its true cost. They would be pissed as hell if they realized what cost they were bearing to subsidize an insurance industry. It could be part of THEIR profits if we got insurance gone.
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