Because he's a straigt-talker, and he said so.

Haven't you been paying attention?

It's not a new tax because it's being proposed by a Republican.

Is it me, or is this a really terrible idea? And who's going to want to start paying taxes on their health insurance?

You're missing the point. This is actually the key to the conservative plan to reduce the cost of health care in this country.

Employers won't suddenly end up paying taxes on health care benefits. They'll stop providing health care benefits altogether.

And that really is the point.

This is what these crazy people mean when they talk about applying market forces to the price of health care. It's what Bush means when he says the reason health care costs so much is that consumers - or what I prefer to call "patients" -don't shop around for the cheapest medical because somebody else is paying for it. The "somebody else" he is talking about is the employer.

So, to these rock-ribbed free marketeers, the best way to lower the cost is to make each individual entirely responsible for the cost of his or her own health plan, or for the out-of-pocket cost if they don't have insurance.

Under this glorious plan, in which you and I gain the privilege of owning our own health care plans (Ownership Society!), we will shop for medical care the same way we shop for food or clothing or cars. As soon as doctors and hospitals realize we are passing them by in favor of the cheaper MRI across town, they will lower their prices in order to compete.

Won't that be wonderful? It will be a workers' paradise!

This is easy. Right now, employers pay $0 in taxes on their health care spending. After they lose this exemption, they will pay taxes on $1 trillion. For ease of math, let's say that's $200 billion. To figure out by what percentage taxes are increasing, you have to divide the new amount by the old amount. Dividing by zero is, of course, undefined.

Thus: no tax increase. His talk is as straight as your math teacher's. Shame on you.

Well, as I understand the way "The Pledge" works, it is a commitment to not raising marginal tax rates, and to offsetting any elimination of deductions with other tax cuts. So it's possible (though not likely) that McCain has in mind some offset, or that he will come up with a proposal for one should he decide to push this health care plan.

So this is not necessarily a "gotcha." Also, just in terms of words, it gives too much to the anti-new tax crowd (of which I am not a member) to allow every revenue increasing measure a "new tax"--words mean something, even though funds are fungible. It would not be Orwellian to say that in eliminating a loophole (not saying that this deduction is a loophole, but many are) one is starting a "new tax." So in your haste to paint McCain a non-straight-talker, do not give away too much.

Oops, I should say that it's ok to say that eliminating a loophole is NOT starting a new tax. Sorry for the poor proofreading.

Can someone explain to me how this isn't a new tax?

Of course it's a new tax. We'll pay more and that's the acid test. However, McCain will frame it as 'removing a tax loophole.'
The same technique is used by liberals who will not call not making the tax cuts about to sunset a tax increase. Again, the acid test is we will all pay more....a lot more.

Tee hee. Nicely said, Ezra. But I gotta say, if Russert made that same point on Meet the Press, you'd accuse him of practicing journamalism, of focusing on unimportant inconsistencies instead of on whether the candidates' espoused positions will do what they say they will do.

That's not an entirely fair comparison, I understand. You don't get to interview John McCain on a regular basis on a prestigious show with a limited amount of air time. Just want to make the point that this sort of gotcha political commentary is fun and easy and hard to avoid.

Nate

Nate

So McCain is now promising "no new taxes."

Any day now we'll hear Hillary Clinton accusing McCain of plagiarizing former President Bush.

its not a new tax in the same way that waterboarding isn't torture.

We dont tortue, therefore waterboarding isnt torture.

It's not a new tax because McCain said he wouldn't raise taxes.

Hahahaha!
Good point on division by zero. However, Obama can also make the case that McCain's new taxes are "illegal"

i'm pretty sure that i lose any dispute over taxes with the tax policy center, but, the $1 trillion doesn't make sense to me.

currently, the total of employer-provided health care expenditures is closer to $500 billion per year. And, the total tax exclusion is around $170 billion per year. so, this seems like the max to me of any tax increase that could happen if we decided to start taxing employer-provided health benefits.

big numbers, but, not a trillion.

the taxpolicy link referenced an OMB report, but, all i found was an estimate of giving a standard deduction for purchasing health care, and, the tax increase from this was more like $100 billion over the entire 2009-13 window of the OMB report

i've dropped a comment at their site, as well.

Viajero, the sunset in the tax cuts was in the bill that the Republicans passed and Bush signed, and it was in there specifically so that Bush could make economic projections that looked good because the tax cuts weren't permanent. Now if no one does anything, the tax cuts will go away, just as the bill and the projections said they would.

How on earth can doing nothing count as passing a tax increase?

in case anybody cares, the $1 trillion what doing away with the entire tax exclusion for employer-provided health insurance would cost from 2009-2013.

wow, is McCain really pushing this?

Is this similar to the Wyden plan, insofar as it starts by breaking the current (already crumbling) employer based health insurance system by taking away the the tax benefit?

But wasn't one of the arguments against the Clinton plan in 1993-94, and allegedly against single-payer, that people who already have insurance are more afraid of losing what they have?

And the plan for what to do after breaking the current system is to do what then...?

Just askin'

How on earth can doing nothing count as passing a tax increase?

1)Congress in in charge.
2)Income taxes increase under their watch.

A lie by omission is still a lie and a tax increase that happens because you do nothing is still a tax increase.

Two interesting things about dividing by zero:
- One: yes it is "undefined" (that is, it represents a singularity). However, it can be easily shown that value obtained by division approach infinity as denominators approach zero.
- Two: it can be shown (but I don't know how, I got this from Ray Kurzweil's The SIngularity is Near) that the result of division by zero is larger than any finite value.

So in the rule of thumb world, we assume that it represents infinity. Therefore McCain's tax increase is infinite.

Wasn't that fun?

Viajero, if it's a tax increase, it's a tax increase that was passed by Republicans and signed by Bush at the time the original bill was passed, because the "increase" is in that bill. Nothing to do with the Congress we have now.

Because Reagan's Social Security tax increase has already been tried. McCain needs a new, fresh-looking backdoor tax increase on working Americans.

Because he belongs to the party of ideas, or something.

Viajero, if it's a tax increase, it's a tax increase that was passed by Republicans and signed by Bush at the time the original bill was passed, because the "increase" is in that bill. Nothing to do with the Congress we have now.

This almost works. The problem rises when you factor in the control that Congress has over all past laws to modify or change completely. They are, currently in charge and they are culpable.

Just the simple fact that you wish to torture the definition to avoid the appearance of a Democrat controlled congress raising taxes shows that you understand the public doesn't like tax-raising.

Just wait until they realize how the Democrats are planning on paying for all of the new programs that they and Monkey-Man are proposing once he gets in office! Boy, are they in for a shock!!