Our guest bloggers are James Kvaal and Ben Furnas, senior fellow and research associate at the Center for American Progress Action Fund.
CBS News took a look at whether John McCain’s health care plan would raise taxes on millions of American families the other night. Watch it:
Here’s what we think is important.
First, the McCain plan will eventually result on higher taxes on most households with health insurance through their jobs. That’s because the McCain tax credit will grow only with inflation. Current tax benefits grow with premiums, which increase three or four times faster than inflation.
Second, the McCain plan will result in higher taxes for some households right away. Families with higher incomes and more expensive insurance plans are most likely to get hit by higher taxes.
Third, the full impact of the McCain plan is difficult to calculate because the McCain campaign is trying to have it both ways on a critical question at the heart of his health care plan: whether it imposes payroll taxes (as well as income taxes) on health benefits.
As originally announced, McCain seemed to impose both income and payroll taxes on health benefits. That would mean that typical middle-class families would pay higher taxes within a year or two.
Now the McCain campaign is apparently saying that they will impose only income taxes on health benefits. If that’s right, then — as CBS reports — most families will see tax cuts in initially. However, because the credit would still quickly fall behind premiums, the plan would still increase taxes on most families eventually. Moreover, McCain’s would cost an additional $1.3 trillion — a massive cost which the McCain campaign has not acknowledged.
Making families pay more for their health care is not some accidental quirk due to the details of the McCain plan. It is a key part of the conservative ideology to shift costs onto families, which they believe will reduce wasteful health care spending. But it is more likely to leave families struggling with higher and higher health care costs and forced to skip care they need.