“Budget Neutral” Means Revenue

I’ve seen focus group data indicating that the — entirely accurate — charge that John McCain is proposing a gigantic tax increase on employer-provided health care benefits is extremely effective. Consequently, it’s no surprise that the McCain campaign is furiously accusing Obama of lying. But Ben Furnas points out that Sarah Palin implicitly admitted the truth of the tax hike charge when she described McCain’s health care plan as budget neutral:

She says:

He’s proposing a $5,000 tax credit for families so that they can get out there and they can purchase their own health care coverage. That’s a smart thing to do. That’s budget neutral.


A $5,000 tax credit costs a lot of money. But as Palin says, McCain’s plan is budget neutral. That’s because the tax credits are offset by a large increase in taxes on recipients of employer-provided health care.