creators.com opinion web
Liberal Opinion Conservative Opinion
Froma Harrop
Froma Harrop
21 Oct 2014
'Death with Dignity' Law Is Least Slippery Slope

The story of Brittany Maynard has revived the debate over Oregon's Death with Dignity Act. The law lets … Read More.

16 Oct 2014
Why Millennials Don't Drive So Much

Young Americans are just not into driving the way their elders are or did at their age. They are less likely … Read More.

14 Oct 2014
Castrating Conservative Principles in Iowa

There exists a government boondoggle that offends conservatives, liberals, environmentalists, oil refiners, … Read More.

... But Keep the Tax Breaks for Mansions

Comment

The president has finally found a tax increase he likes — on workers' "gold-plated" health benefits. The new-found tax revenues would supposedly offset the cost of helping Americans buy their own coverage. This weird plan won't go anywhere politically — even though elements of it have merit.

The tax system can't fix the health system. Bush has this idea that fiddling with the tax code will meet most every social need. It won't, and that goes double in the very complex world of health care.

Employer-provided health insurance is now entirely tax-exempt. Coverage bought outside the job is not. Bush's proposal, mentioned in his State of the Union Address, would do the following:

Workplace health coverage costing more than $15,000 for a family or $7,500 for an individual would be subject to income and payroll taxes. Families that buy their own policies, meanwhile, could deduct $15,000 from taxable income. Individuals could take off $7,500. It doesn't matter if the actual cost of the insurance is less.

The idea is being sold as a way to help the 47 million uninsured Americans buy coverage. Not many are buying.

"It's totally unclear as to how these benefits would be reprogrammed to help the uninsured," Fitzhugh Mullan, a former U.S. assistant surgeon general, said over the phone.

The uninsured are mostly the working poor, who don't earn enough to use tax deductions. The proposal does nothing for those who can't get insurance because a family member is already sick. Private insurers shun even well-to-do people with pre-existing conditions.

The deduction would be a boon to the 27 million Americans who already buy health insurance outside of the workplace — and a matter of fairness. As Bush correctly noted, it would "level the playing field" for people who obtain coverage outside the job.

No doubt there are people with good incomes who haven't bothered to buy health insurance and would do so with an attractive tax incentive.

But let's be clear about one thing: This tax deduction is more about helping real-estate agents and freelance consultants than dishwashers.

However, placing some limit on the tax subsidy for health insurance makes sense, says Mullan, now a professor of health policy and pediatrics at George Washington University.

"We're going to have to design ways in which the individuals with more luxurious or extensive health benefits are not receiving those at public expense," he says. "If you want to buy a Lexus, you can buy a Lexus, but you have to have a bank account to do it."

But this is a minor point. The big negative in Bush's health-care policy, Mullan contends, is that it doesn't address the big stuff — "The crazy-quilt of insurance carriers, government coverage, complexity and waste in the system."

In his weekend radio address, Bush likened this proposed tax treatment of health insurance to that of home ownership. Just as Americans can deduct interest payments on home mortgages, he said, they would deduct premium payments on health insurance.

It's an awkward choice of analogy in that there's almost no cap on the deductibility of mortgage interest. You can deduct all the interest paid on a $1 million mortgage, whether it bought a McMansion, a beach house or both.

Economists argue that allowing generous deductions for mega-mortgages raises the price of housing — just as tax subsidies for fancy health coverage increase medical costs. But while Bush has ignored their calls to curb the subsidy for luxury residences, he's perfectly happy to jump on the autoworkers' spiffy health benefits.

"Of all the tax breaks for all the interests in all of America," the workers must be thinking, "and you had to come into mine."

To find out more about Froma Harrop, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 2007 THE PROVIDENCE JOURNAL CO.

DISTRIBUTED BY CREATORS SYNDICATE INC.



Comments

0 Comments | Post Comment
Already have an account? Log in.
New Account  
Your Name:
Your E-mail:
Your Password:
Confirm Your Password:

Please allow a few minutes for your comment to be posted.

Enter the numbers to the right:  
Creators.com comments policy
More
Froma Harrop
Oct. `14
Su Mo Tu We Th Fr Sa
28 29 30 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31 1
About the author About the author
Write the author Write the author
Printer friendly format Printer friendly format
Email to friend Email to friend
View by Month
Walter Williams
Walter E. WilliamsUpdated 22 Oct 2014
Ben Shapiro
Ben ShapiroUpdated 22 Oct 2014
Roger Simon
Roger SimonUpdated 22 Oct 2014

29 Sep 2009 Liberals -- Choose Your Friends Wisely

23 Aug 2011 'Enforcement' of Immigration Laws Already Here

8 Mar 2012 After Snowe, Is Brown Next?