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McCain health plan could mean higher tax
On stops in Florida and Pennsylvania this week, Senator John McCain has emphasised a free-market approach that he said would lower health care costs and make insurance affordable.
- By Kevin Sack and Micheal Cooper, The New York Times
- Published: 00:05 May 3, 2008
- Republican Senator John McCain speaks during a town hall meeting in Des Moines, Iowa.
- Image Credit: AP
Allentown, Pennsylvania: Though Senator John McCain has promised to not raise taxes, his campaign has acknowledged that the health plan he outlined this week would have the effect of increasing tax payments for some workers, primarily those with high incomes and expensive health plans.
The campaign cannot yet project how many taxpayers might see their taxes go up, said Douglas Holtz-Eakin, McCain's top domestic policy adviser. But Holtz-Eakin said in an interview that for some, McCain's health care tax credits would not be large enough to compensate for his proposal to eliminate the tax breaks afforded to workers with employer-provided health benefits.
On stops in Florida and Pennsylvania this week, McCain, the presumptive Republican presidential nominee, has emphasised a free-market approach that he said would lower health care costs and make insurance affordable.
To do so he is proposing a major tax change that he hopes will make the insurance marketplace more competitive and less expensive in part by encouraging more people to buy health insurance on their own instead of receiving it from their employers.
The 71 per cent of insured Americans who get their health coverage through their employers now enjoy a significant advantage because the money spent by employers on their health coverage is excluded from their taxable income. If employers chose to pay that share of a worker's compensation as wages rather than benefits, the income would be taxable.
The exclusion costs the federal government more than $212 billion a year in income and payroll taxes, according to Congress's Joint Committee on Taxation. That is more than the cost of the deductibility of home mortgage interest, according to the Employee Benefit Research Institute.
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| This article on the national political campaigns in the United States is from The New York Times. It was specially selected and prepared by the editors of The New York Times News Service. |
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