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Next Up: Tax Fight

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"Next Up: Tax Fight"

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I have a column in the Daily Beast this morning about what I think is likely to prove the biggest sticking point in terms of getting a health care bill done—the very different revenue mechanisms under consideration in the House and the Senate. There’s no indication that the House’s surtax on the rich has serious support in the Senate, and no indication that the Senate’s excise tax on high-value insurance plans has serious support in the House.

My take on this is that the Senate’s excise tax needs to be scaled-back somewhat, and also that the House does much better on the subsidy front implying that we need more revenue than what the Senate’s tax raises. Consequently, you could easily compromise between the two bodies by combining a scaled-back version of the excise tax with a scaled-back version of the surtax, then afford generous subsidies. But in the political world you normally don’t solve a dispute over tax policy by doing both tax hikes simultaneously.

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