Today, during an interview with ABC’s George Stephanopoulos, Sen. John McCain (R-AZ), who has previously promised “not [to] raise your taxes nor support a tax increase,” finally admitted that his health care tax credits would not cover the costs of a comprehensive health insurance plan:
MCCAIN: Actually, my position is that it will be, it will give people actually more money to go out and purchase tax – health insurance on their own and only those with the Cadillac gold-plated health insurance policies today are the ones who might suffer from it. The ones -
STEPHANOPOULOS: So they would see their taxes go up potentially.
MCCAIN: It depends on, on, on what plan they have. But that’s usually the wealthiest people. Ordinary working Americans have the kind of – or an overwhelming majority have the health insurance plans that this tax credit, refundable tax credit, will actually put more money in their pockets for the purchase of health care than what they had before.
McCain’s tax increase is worse than he lets on:
- Eliminating Tax Exemption Increases Cost Of Plan For Those Who Need It Most: By equalizing the tax treatment of employer and individual plans and enticing healthy workers to buy cheaper but less substantive insurance in the individual market place, McCain’s tax reform would increase costs for sicker workers and may force some workers to opt out entirely.
- Tax Credits Don’t Keep Up With Health Costs: McCain’s credits will diminish in proportion to growing health care premiums. This is because McCain indexes the growth of his initial $5,000 offering to inflation, not premiums. And, since premiums grow at a higher rate than inflation, McCain’s proposal imposes a large tax increase on the middle class.
- Middle Class Experiences Largest Tax Increase: For a couple earning $40,000 and paying $13,800 for insurance, “McCain’s new tax credit would cut their taxes by $50 in 2009, but because the credit quickly falls behind rising premiums that are the basis of the current tax break, the family would pay $1,169 more in taxes in 2013…[and] would pay $2,809 more in taxes by 2018.”
Ironically, McCain’s health care plan raises taxes for families whose yearly income just barely covers the cost of a Cadillac.