Obama Is Pressed to Tax Health Benefits

[cal04]

Seeking GOP Votes, Democrats Split Over Plan for New Levy
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/14/AR2009061402769.html?hpid=topnews

The White House is caught in a battle within its own party over how to finance a comprehensive overhaul of America's health-care system, as key Democrats advocate a tax plan that could require President Obama to break his campaign pledge not to raise taxes on the middle class.

Sensitive to voter anxiety about a soaring federal deficit, Obama and congressional leaders have vowed to pay for a sweeping expansion of the health-care system -- expected to cost more than $1 trillion over the next decade -- without additional borrowing.

Much of the money is likely to come from reining in spending on federal health programs for the elderly and the poor. Obama has proposed trimming more than $600 billion from Medicare and Medicaid by 2019 -- including more than $300 billion in cuts unveiled in his Saturday radio and Internet address -- which could fulfill the promise to curb the growth of federal health spending.

The rest of the cash will probably come from new taxes. But Democrats are deeply divided over which taxes to raise, and the issue has become a central stumbling block in the push to enact legislation by fall.

In recent days, Obama has revived a tax plan he first offered in February: limiting itemized deductions for the nation's 3 million highest earners. Polls show that the idea is popular -- it was Obama's biggest applause line last week at an event in Wisconsin -- and it would enable him to abide by a campaign pledge to pay for coverage for the uninsured with new taxes on the rich.

(snip)
But many Democrats, particularly in the Senate, have balked at the idea, saying they prefer a tax that has some hope of winning Republican support. In legislation that could be unveiled as early as this week, Senate Finance Committee Chairman Max Baucus (D-Mont.) is expected to propose a new tax on the health benefits that millions of Americans currently receive tax-free through employers.

[lindisfarne]

1. A tax on health benefits beyond a certain benefit level IS fair.

Obviously, details will have to be worked out, but executives, for example, get VERY generous health benefits, compared to the average American. That expense is part of their total compensation package. It's not fair that they get a larger dollar amount of their total compensation package untaxed, compared to a worker making $24,000/year (assuming that worker gets any health benefits currently). They also should be talking about taxing insurance benefits for disability and life coverage that exceed a certain level.

[dkf]

6. So do unions.

I'd like to know exactly what these executive health benefits look like. I have no idea what is so much better about it than the health benefits my state retiree parents get.

[lindisfarne]

13. I agree. Anyone whose benefits exceed a certain level should be taxed.

This is a little tricky, because you cannot just go by $ amount paid by an employer for the health insurance, because larger corporations (currently) are able to negotiate much better rates than smaller employers for health insurance.

One way of addressing this is to not allow private insurance companies to charge different rates to different employers on a per-employee basis for the same package of benefits. We need a much greater degree of regulation of the insurance industry than is currently the case (Germany is highly regulated and their private insurance industry works fine alongside their public option - and their population is only 82 million; not all buy private insurance).

(The exemption for taxing union benefits that has been discussed is only until the contracts they have at the time of passage of the tax expire. Unions have often negotiated for better benefits over better pay, so in the next round of contracts, they'll have to examine whether their level of health benefits will be taxed, and if so whether they want to reduce their health benefits to avoid the tax, and negotiate instead for higher pay.)

Compensation of all sorts should be taxable when it exceeds some level (and I'm glad to see that life insurance benefits already are taxed, apparently beyond $50,000 per another reply - I didn't know that).

[clear eye]

8. Two cents from the insurance co. shill. n/t

[iamjoy]

9. Life Insurance Already Is Taxable

Only the first $50,000 of employer provided life insurance is tax exempt. Anything over that is subject to taxes. The government has some table to assign a value to it (based on age and amount of coverage)

[FreakinDJ]

10. Fuck You - We voted down McLame's plan with McLame

It was McCain's plan to tax health benifits and the country overwhelmingly said NO!!

[marybourg]

2. "a tax that has some hope of winning Republican support."?

There ain't no such thing. Oh wait, a tax on the poor! That'll do it.

[aquart]

11. WTF cares about Republican support? This ain't Albany.

[QC]

12. But Obama always *STARTS* by making concessions to the Republicans.

Someone needs to take this man to a yard sale and show him how negotiation is done.

[lindisfarne]

15. The people clearly want a public option: 73% in one survey; 67% in another. Links at

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3922967&mesg_id=3923009

The public need to bombard their representatives and let them know they want the public option. This might help said representatives (senators & congresspeople) to resist the pressure from the repubs to negotiate.

[kath]

16. Yep -he always worries the most about not offending the Repugs.

Jeebus H. Christ.
I'm SOOOOO fuckin' sick of this shit! Start paying attention to the people who put you in office, dammit!

[lindisfarne]

18. That statement isn't true. I remember the headlines shortly after he took office

when he told the republicans "We won". I don't remember the exact exchange but he was clearly saying, we don't have to negotiate everything. The people have spoken.

I don't agree with every last thing Obama does but he has shown himself to be intelligent, thoughtful, and to gather advice from other (primarily) intelligent people (I don't like Summers, but it's important to gather input from all sides - I'm just not sure he should have been made chair of the CEA). I trust Obama overall to make good decisions because he has a good record of doing so - far better than any of the last 4 presidents.

[aquart]

19. Nobody reasons with the reasonable because they can be talked out of anything.

[Hannah Bell]

20. ;o

[Oregone]

3. Screw that, Just prohibit anyone over 40 from getting treatment.

Youll save a bundle in a bipartisan manner!

[RB TexLa]

4. Lovely, my wife's employer pays over $6,000 a year for her health insurance

So that's $1,900 extra for us.

[lindisfarne]

14. How'd you get that? Did you read the article in the OP? Have you been following this issue?

from the article:
"Two-thirds of Americans under age 65 get coverage through an employer -- more than 158 million people, according to the Kaiser Family Foundation. In 2008, only about one in five employer-sponsored plans carried the high premiums likely to be hit by the tax."
===========

This tax is a little tricky, because you cannot just go by $ amount paid by an employer for the health insurance, because larger corporations (currently) are able to negotiate much better rates than smaller employers for health insurance. You'd have to talk about a LEVEL OF BENEFITS, rather than a $ value of benefits.

One way of addressing this is to not allow private insurance companies to charge different rates to different employers on a per-employee basis for the same package of benefits. We need a much greater degree of regulation of the insurance industry than is currently the case (Germany is highly regulated and their private insurance industry works fine alongside their public option - and their population is only 82 million; not all buy private insurance).

[RB TexLa]

24. Because her premium is more than 3 times the average for employees at her company

and because she pays a much lower portion (0%) than the average paid by employees at her company. Meeting the criteria for every proposed plan to tax health care benefits ever floated.

But I guess the real issue is the fact that I thought I knew that stuff. I really should have asked you if you felt I knew what I was talking about. I am sorry, I mean really, I am begging you to forgive me. I just don't understand how I could have thought even for a second that I could have known what I was talking about.

[clear eye]

26. He knows when he's about to be screwed, Mr. Health Insurance n/t

[QC]

5. This is a trap, and I hope that Obama's obsession with being all reachy outy and bipartisan

doesn't lead him right into it.

If he agrees to this, then the 2010 campaign will be all about how Obama raised your taxes and spent the money on socialized medicine for deadbeats.

[kath]

17. Tax the rich - the top 1-2% - they can freakin' afford it, trust me.

[QC]

25. Oh my goodness no! We could never tax the rich!

Better to sell the country down the river than to do that!

[clear eye]

7. Which "key Democrats" have turned on working people

to pay for this boondoggle of a health insurance plan? The cost of keeping the private insurers in is hitting the fan, now. Over $1T in the next 10 years! The elderly and poor, meaning the least powerful of society, are going to pay dearly to keep the management of private insurers rich, just as we all paid to keep the management of banks rich. The smart thing for the Pres. to do at this point would be to admit that there is no tolerable way to pay for decent universal care and include the for-profit insurers, and that the only affordable plan for the U.S. is single-payer. (Not that I expect to see that.)

What I do hope to see is a realization of the difference in cost between a mixed private/public plan and single payer by the public. We have until Aug. to drive that understanding home, and tell Congress that we don't want our elderly and poor uncared for just to retain private insurance cos.

[Hannah Bell]

21. yes, why isn't the party organizing?

[Vinca]

22. They need to be precise with their numbers because the immediate

reaction to this plan is "no." If you explain that it's gold-plated healthcare insurance valued at more than $12,000 a year that's a whole different concept.

[seabeckind]

23. Alright, this is getting old

when the f--k do I get the change? The only change I've seen coming out of that bullshit factory in dc is that now I have democrats not representing me instead of republicans not representing me.

My wife and I have made a resolution: We will vote or support NO ONE!!! who votes against single payer. Hear that, Maria?

As far as that DINO senator from my previous state of Indiana, might as well have a republican -- at least he looks you in the face and laughs when he f--ks you. Bayh does it by sneaking up from behind.