Senate after they tossed single payer folks in jail

At the last senate finance committee hearings, after they removed the single payer folks and carted some off to jail; they heard testimony that taxing worker's meager healthcare benefits would be a good idea.

This is from today's Wall Street Journal and is interesting reading.



This is from today's Wall Street journal and is a copyrighted editorial. I shall withdraw if objections made:




http://online.wsj.com/article/SB124355286037664421.html#
REVIEW & OUTLOOK MAY 29, 2009 Taxing Health Care
Obama and Democrats owe John

Politicians wouldn't be politicians if they didn't trim their sails to the
prevailing winds. Even so, the emerging 180-degree turn by Democrats on taxes
and health insurance is one for the record books.


AP
Democrats have spent years arguing that proposals to equalize the tax treatment
of health insurance are an outrage against the American people. Workers pay no
income or payroll taxes on the value of job-based plans, but the same hand isn't
extended to individuals who must buy coverage on their own. Last year liberals
mauled John McCain for daring to touch the employer-based exclusion to finance
more coverage for the individually uninsured. He was proposing "a
multitrillion-dollar tax hike -- the largest middle-class tax hike in history,"
said Barack Obama, whose TV ads were brutal.

But now Democrats need the money to finance $1.2 trillion or more for their new
health insurance entitlement. Last week Senate Finance Chairman Max Baucus
released his revenue "policy options" and high on the list is . . . taxing
health benefits. Or listen to White House budget director Peter Orszag, who
recently told CNN's John King that the exclusion "was not in the President's
campaign plan, it wasn't in our budget. Clearly, some Members of Congress are
putting it on the table and we are going to have to let this play out."

Mr. King tried again. "Let this play out. But would the President sign a bill
that includes a pretty significant tax increase? That would be a tax increase."
Mr. Orszag: "We're not going to be -- I think it's premature to be commenting on
individual items . . . There are lots of ideas that are being put on the table."
Translation: You betcha he'd sign it.

The tax exclusion is such a big revenue prize because Mr. Baucus is scrubbing
every other tax nook and cranny and only coming up with rounding errors. A
sampler:

- Impose an excise tax on hard alcohol, beer and some kinds of wine. That would
be in addition to a sin tax on beverages sweetened with sugar or high-fructose
corn syrup, such as soda. Mr. Baucus doesn't offer revenue estimates, though the
Congressional Budget Office says a $16 per proof gallon alcohol tax might raise
$60 billion over 10 years, and another $50.4 billion at three cents per 12
ounces of sugary drink.

- End or limit the tax-exempt status of charitable hospitals, which only costs
currently a mere $6 billion a year.

- Make college students in work-study programs subject to the payroll tax. Also
targeted are medical residents, perhaps on the principle that they'll one day be
"rich" doctors. CBO has no score on these.

- Reducing Medicare reimbursement rates for supposedly "over valued physician
services," such as diagnostic imaging. CBO says that requiring doctors to get
prior clearance could save $1 billion in 10 years.

- For individuals with high-deductible insurance plans, contributions to health
savings accounts would no longer be tax deductible. That would penalize patients
who choose plans that encourage them to be informed consumers. CBO says that
banning HSA payments entirely would yield all of $10 billion.

By contrast, the employer-based exclusion offers a huge money pot -- an
estimated $226 billion in 2008. Yet as liberal MIT economist Jonathan Gruber
recently told Mr. Baucus's committee, "no health expert today would ever set up
a health system with such an enormous tax subsidy to a particular form of
insurance" (his emphasis). It creates a coverage gap between workers who receive
it from their employers and those who pay -- or can't afford to pay -- with
after-tax money.

The tax exclusion is also one reason health costs continue to rise. It
encourages workers to take an extra dollar of compensation in fringe benefits
instead of cash while also routing low-deductible health spending through third
parties. Some 84 cents of every medical dollar is spent by someone other than
the patient. The insured have no incentives to make cost-conscious decisions
about care.

So reforming the exclusion would inject a dose of discipline into American
medicine. But for most Democrats the goal isn't to create a more rational
health-insurance market. They simply want the revenue for another government
program. Mr. Baucus won't target gold-plated employer insurance plans in
general, because union-negotiated benefits are usually gold-plated. Rather, he
may cap or phase out the exclusion by income, starting with workers earning more
than $200,000. Insurance options that don't conform to government diktats
(health savings accounts) would also lose any tax advantage. This would do
nothing for market efficiency, but it would be one more stealth tax increase.

Democrats owe an apology to Mr. McCain, and it'll be fascinating to see if they
will now suffer a political backlash of their own making. Having told the
country that this tax reform is really a tax increase, Democrats are opening
themselves to the same attacks they leveled against Republicans.

They could avoid that fate if they used the tax exclusion money to finance, say,
a tax credit for the uninsured. That would be a genuinely bipartisan reform. But
liberals won't accept that because they want to take one giant step toward
government-run health care. And the only way they can pay for it is by taxing
everything in sight, including your current health insurance.

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Taxes and death. Without single payer health insurance, death is a real probability for many an American.