Tuesday, October 07, 2008

McCain's Healthcare Tax Proposal

Would actually probably benefit me personally more than Obama's.

That's because I'm self-employed and cover my own GROUP health insurance. Since I'm already paying taxes on a good portion of my healthcare, the $2,500 rebate would largely be a benefit to me.

However, it would probably be a disaster for larger businesses that employed anywhere from ten to a hundred employees, as employees would see a decrease in their takehome pay (as the portion of the tax benefit they receive from their employer would now have taxes taken out.) The only way that employers could mitigate the amount of taxes would be by reducing healthcare benefits. So it would be an incentive for employers to move people into plans with higher deductables and co-pays. So even though employees would see a tax rebate, the increased taxes and higher deductables would more than offset that.

Essentially, the McCain plan simply redistributes the tax burden so that self-employed people, and rich people with expensive plans, pay less tax, and everyone else who works for a living pays more, and sees the quality of their coverage decline.

It's one benefit that isn't going to convince me to vote for McCain: decreasing the quality of healthcare for workers is not exactly what we need to be doing in a severe recession.

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