Skip to comments.Bush to float health insurance tax break
Posted on 01/20/2007 8:18:47 AM PST by PtrainerNYC
WASHINGTON - President Bush will propose in his State of the Union address a tax break for people who buy their own health insurance and a limit on how much coverage individuals can receive tax free at work. ADVERTISEMENT
The proposal to be announced Tuesday offers a tax deduction to people who purchase coverage and urges those with generous plans to either embrace cheaper insurance or pay taxes on part of it, according to a Bush administration official familiar with the proposals.
If passed by Congress, the plan would be the first time that workers could get a tax break for buying their own insurance. At the same time, it would be the first time that some employer-provided health care benefits could be taxed.
Politicians are such scum bags.......
I working my butt off and the taxing authorities are killing me.
I am not saying I should be, I am just identifying this as a problem area for alot of people.
Here's the deal folks. It's better for you as an employee to have the right to deduct the cost of getting your own insurance. The company that you work for should not have this right solely. THIS IS GOOD NOT BAD. This way, an individual can get a Health Savings Account and deduct its cost. Why should the employer be the only one with this benefit? HSAs are GOOD, because they will help us keep health care costs down and you get to keep the cash that you do not use. They are proven.
Granted, if you don't get the insurance, you don't get the tax break. That's no big deal, because you weren't getting it before.
You can take this insurance with you wherever you work. It is transportable. It is yours. There are tons of benefits.
indeed. before I embrace having my employer provided plan (the part of it I don't pay for with co-pays) taxed as income, I'd be in favor of universal medicare funded by a broad based consumption tax.
we have to stop taxing the hell out of wages in this country.
that part of the plan is fine, the new tax is not.
Democrats tax and spend.
Republicans spend and tax.
Potentially - the idea is not to tax you, but to get people to go out and buy their own health insurance on the open market. Putting people in massive group plans drives costs up, does nothing to encourage individual responsibility (in that it pools the costs of the healthy and the least healthy), and denies individual flexibility.
The ideal system would feature individually-purchased low-premium, high-deductible insurance combined with various tax measures, and health savings accounts.
The present "insurance" system is horribly wasteful in large part because it's expected to behave in a way which no other type of "insurance" does - namely, to cover the day-to-day costs of health care. Imagine what auto insurance would cost if it covered the cost of oil changes and wheel reblanacnings.
But then again, Bush needs a tax increase to pay for medical care of the millions of illegal immigrants he is letting flood into our country.
What you say is true. Getting health insurance these days can be a nightmare for our kids.
But you don't solve the problem by piling more and more bureaucratic layers on top of it. That road was taken by Canada and Europe, and it is destroying their economies and medical systems.
One reason why healthcare is so expensive is that the lawyers and insurers are getting more and more of the money and the doctors less and less. Paperwork is crushing, too. Where a small group practice used to have one secretary, they now have to hire five, just to fill out all the required forms.
Hillarycare failed, but clinton managed to pile a number of reforms on anyway. It's noticeable that costs have skyrocketed ever since, and a lot of huge insurance buildings were built with the proceeds.
What we have here is a failure to communicate.
As a matter of good tax policy, all income should be treated equally. If it were up to me, I would count all employer paid benefits as income. I would also count all government transfer payments as income. Broaden the base and reduce the rates.
On a parallel track, good health policy would shift us from third-party payment to individual control. Get the employers out of the loop. And again, if there is to be any subsidy at all (apart from the poor, who will have to be subsidized in any system), it makes no sense to award the subsidy arbitrarily, based on employer choices.
In general, the bigger the employer the higher the wages and the richer the benefit package. That's fine. But there is no reason to provide a tax-code distorting, health-system distorting regressive subsidy on top of that.
For the record, I now work for a large employer, am well paid, and have good benefits. I am goring my own ox here, but if we are serious about tax and health-care reform, we have to be willing to let the chips fall where they may.
For a similar set of reasons, we should phase out the home mortgage interest deduction (which is mostly an illusion anyhow). We wrongfoot ourselves if we complain about housing subsidies for the poor while receiving significantly greater subsidies ourselves. The only difference is that their subsidies are paid by HUD and ours are laundered through the IRS.
The problem of pre-existing conditions is crushing
There is a way around this. Until just recently I would have agreed with you. I'm preparing to move my permanent residence back to the Kansas City area and would prefer to live on the Johnson County Kansas side of the city where I spent most of my adult life both working and living. However, during the last 15 years my residence of record has been Lake Ozark Missouri and I have had Blue Cross/Blue Shield of Missouri.
If I move back to Kansas I have to change insurers. It will still be BC/BS but of Kansas instead of of Missouri, a different policy and hence, my diabetes will be considered a pre-existing condition and will no longer be covered.
Essentially, I thought I would be a prisoner of the state of Missouri the rest of my life. But the exception is this: AARP offers group medical insurance that appears to be as good as my private Blue Cross at a group price. Any doctor I want, same deductibles etc. And one can join AARP at age 50.
Still sounds like a TAX INCREASE to me (and it will be a tax increase for me as I have very good employer-provided coverage.)
What a dumb idea. This State-of-the-Union speech already has "disaster" written all over it. You can bet your last dollar that the MSM will be talking about the "Bush tax increase" for weeks after the speech (recalling the experience of his father).
"TOO MUCH INSURANCE COVERAGE AND FREE COVERAGE FROM EMPLOYERS IS WHAT IS CAUSING HIGH HEALTH CARE COSTS. Until people understand that, and it does sound counterintuitive, we will have health care problems."
There's a vote loser. Recalls the phrase: "We are going to take things away from you for the common good."
I have good health care coverage from my employer, and I don't want it taken away (or taxed) by Bush or any other politician.
Bush is acting like a Socialist. Rehearsal for President Hillary.
"I think this is one of the Bush Admins plans to preempt Hillary."
He's certainly acting like a Socialist tax raiser. Warm-up for President Hillary.
"Sub-S employees that own more than 2% of the company already pay Federal and State taxes on health insurance coverage."
That was once true, but I don't think it is anymore.
During the late 1990s and early 2000s, deductibility of health insurance premiums for folks who own their own businesses was phased in. I remember when I didn't receive any deduction for my premiums, but I remember that over the years, I received increasingly higher percentages of deductibility, until now, it's either 80% or 100% (I don't remember off the top of my head).
However, we just started a plan with an HSA component, and as the owner, I don't get the deduction for contributions to my own Health Savings Account (although, of course, my business gets a deduction for contributions to my workers' accounts).