Tax on Health Benefits Considered by Democrat Senate

Senator Max Baucus (D-Montana, Chairman of the Senate Finance Committee) is drafting a health plan which will include a new tax on employer-provided benefits. This is discussed in this Washington Post article. Baucus's plan is to tax any benefit exceeding the current basic plan offered federal employees of $13,000 a year for a family of four. My first thought is that there are few private sector plans with such high benefits, but apparently many union workers actually do have such a high level of benefits because the unions squawked at this plan. As a result, the Democrats have shown a blind eye to the Equal Protection Clause of the Constitution and they are making an exception of the unions on this tax, at least while they are under any current labor contracts. This makes the rest of us second-class citizens. Or is it simply that the unions are treated as though they are Muslims in a Muslim country and the rest of us are held in a state of Dhimmitude?

Baucus says the tax on health benefits is likely to be phased in over several years. Given that the new health plans will immediately cost much more money and Washington has printed as much money as it can already without drastic inflation resulting, it is hard to see how this can be a very gradual phase in. The Democrats expect to raise nearly $420 billion over the next 10 years this way. Of course, over $1 trillion is needed over the next 9 years, according to government estimates for the health plan to be funded.

Quiz: Are government estimates of program costs systematically high, dead-on, or low historically? Well, if you did not answer low immediately, you are a very other-worldly creature indeed!

So, the Senate Finance Committee will be proposing still more taxes to pay for this health insurance plan to cover some fraction of the uninsured. Obama suggests limiting the itemized tax deductions of families making more than $250,000 per year as one such tax. The Joint Committee on Taxation, in a closed door meeting last month (exemplifying the new transparency in government operations promised by Obama), estimated that repealing deductions of certain large medical expenses will produce revenues of $180 billion over 10 years, a new tax on health reimbursement accounts and flexible savings accounts will bring in $70 billion over 10 years, a $0.03 tax on sugary drinks will yield $50 billion, and an increased alcohol tax will add another $60 billion. Or, one can generate enough revenue in new taxes by taxing half of all employer-provided health benefits, yielding $1.2 trillion in new revenues.

Given that increasing numbers of businesses do not offer a health insurance benefit to employees now, one would expect that any plan to tax half of the health premiums paid by companies would greatly reduce the value of such a benefit to employees and hence cause more companies to choose to offer no health benefit. Well, the government plans not to allow this. They are planning to require almost all companies to provide a health benefit plan. Unfortunately, with more people having health benefit plans and the government driving down the costs in the additional government insurance plan, while driving them up in the private plans, businesses are going to see escalating health benefit plan costs such as they have never seen before. This despite the fact that these costs have been rising very rapidly and are causing many businesses a great deal of dispair. So, since American businesses will soon be strapped with much higher health benefit costs, many American jobs will not be created and many will be lost. Our competition in other countries will reap the benefit of the Democrat Congress Health Insurance Business Death Plan.

Taxing health benefits offered by companies and taxing health reimbursement accounts will leave many Americans with a worsened ability to obtain quality health care. Many people will not be able to afford their large medical bills when they can no longer take a tax deduction on them. The health care industry will fall under still more government pressure to limit quality of care by further reducing doctor-patient interface time and by preventing research into the use of new techniques and drugs. Less money will be invested in new equipment with increased capabilities. Expensive procedures will be rationed, probably especially for the elderly. The command will be given more and more to let them die, for they have too little time left to make the procedure worth the cost to the program. [They have few votes left in them to cast at elections.] The more capable future doctors and pharmacists will not wish to enter the field of medicine due to increased control by bureaucrats and the shear boredom of dealing with additional mounds of paperwork.

The dream of every government bureaucrat is that private industry will function using the same management methods used within government. These methods include the assumption that anyone working in the bureaucratic agencies is a child, a stupid and thieving child. In some government agencies, this is the case. So, the pressure will be cranked up to see that this is also the case in every hospital, pharmacy, and doctor's office, because only people of the low quality of those working for government agencies will soon want to be in the health care industry.

So, these bums plan to tax my source of caffeine, but not coffee. Damn, that makes me angry. I drink coke and I do not like coffee. Besides warm drinks make me drousy. Artificial sweeteners give me headaches or make my stomach upset. I will not touch those poisons. I suppose I will just fall asleep driving home one morning and die. Thanks Congress! You elitists are so, so, so, good at managing our lives!

Given the incredible low confidence ratings that the American people consistently have been giving Congress over the last decade or two, how is it that we keep allowing them to exercise ever more control over our lives? Have the American people become totally spineless? Once the proud standard bearers for the sovereign rights of the individual to life, liberty, property, and the pursuit of happiness, have they now become nothing but sheep herded by the fools who imagine themselves the elite?