Ladies and gentlemen, sit back and savor the irony as the Obama administration and his minions on the hill consider funding Obamacare in part by taxing what he said (while campaigning) should not be taxed – Employer based health care benefits, which is currently tax exempt. If you recall John McCain’s health care reform plan involved taxing employee health care benefits to fund a tax credit for people to go out and buy their own health care insurance. You will also recall that Obama railed against such a tax saying that it would hurt low income and middle class families. However, the idea is gaining steam in Congress as they have estimated that removing the tax exemption could generate up to $297 billion in tax revenues.
The idea of taxing employee health-care benefits to raise money for an overhaul of the health system is gaining strength in Congress, although it drew criticism from Barack Obama when he was campaigning for president.
Experts lined up Tuesday before the Senate Finance Committee and said it is one of the best ways to pay for a health-care overhaul. Many top Democrats support the concept.
Not so coincidentally taxing the benefits to pay for Obamacare is also another nail in the private health care coffin – which Obama and his statist Congress are building – and another way to help ensure the inevitability of single-payer nationalized health care. The major road block for Obamacare is funding. The overwhelming costs of his health care initiative cannot be funded from just one place…
A comprehensive plan that would include coverage for those now without insurance is expected to cost about $1.2 trillion over 10 years. So far, the government has identified where it will get about half of that sum.
The sheer magnitude of funds needed for Obamacare means that Obama and Congress are going to have to get creative with their taxation. As discussed earlier here they are also considering a Soda Tax and naturally, another alcohol tax. Falling short of the currently projected $1.2 trillion over 10 years, the currently estimated $297 billion annually is starting to look mouth-watering good. However, that doesn’t mean that removing the exemption will fly in Congress.
Leading Democrats say they still want the benefits to have some tax advantages. “To be honest, I don’t think we’re going to repeal the exclusion,” Senate Finance Committee Chairman Max Baucus (D., Mont.) said at Tuesday’s hearing. Instead, they are considering placing a cap on the amount that is tax-exempt, and higher-income employees could see the tax benefit curbed.
“I don’t see how you put a package together…unless you touch the exclusion,” Robert Greenstein, executive director of the Center on Budget and Policy Priorities, a left-leaning think tank, said at Tuesday’s hearing.
Translation – more class warfare. My prediction is that targeted voting blocks (poor and lower middle class) will probably keep their exemptions while the middle class will probably see partial exemptions. The upper middle class will see less, if any, exemptions and those vile, evil, rich people will get no exemptions and/or possibly pay even more.
Call me cynical but I highly suspect that Obamacare will cost well above $1.2 trillion – which of course, means that those initially kept expemtions will be slowly stripped away. And should these exemptions be stripped we can look forward to an acceleration towards a complete single-payer system. The irony is that by killing exemptions to pay for Obamacare and usher in the single-payer system, once private health care is dead and buried… how will it be paid for?