Wall Street Journal Responds to Obama

In last night's presidential debate, Barack Obama claimed the John McCain health plan would amount to "taxing your health-care benefits for the first time in history."  Here is the Journal's response:

[McCain] would offer a refundable tax credit of $5,000 for families, $2,500 for individuals, and the benefit isn't dependent on where people work or what they earn…..

According to the Joint Committee on Taxation, the current employer benefit is only worth between $600 and $3,000 for people making under $100,000. The upper-income brackets save between $4,000 and $5,000…..

All in all, workers would come out ahead with the McCain plan. According to the left-leaning Tax Policy Center, the average taxpayer would see his tax bill drop by $1,241 in 2009.

Full editorial here.

Comments (4)

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  1. Jack says:

    All in all the McCain campaign has done a very poor job of explaining what is really a very good health plan.

  2. Natalie Sirkin says:

    Dr. Goodman, I have a question. Tuesday night at the debate Obama accused McCain of aiming to tax the benefits of health insurance. He has said the same thing before. I do not understand what he means. Do you? If not, can you guess? McCain never corrects him. Somewhere I saw (maybe by Obama) that McCain would make workers in firms that provide insurance, part payment in taxable dollars. ________________________________________

  3. John Goodman says:

    McCain would replace the current system of tax subsidies with a fairer, more efficient system. Currently, employer payments for health insurance are excluded from employee income and payroll taxes. Under the new system, health insurance expenses would be included in every employee’s taxable income. (This has the effect of increasing your tax liability.) At the same time, everyone would get a refundable tax credit ― $2,500 individual/$5,000 family. (This reduces your tax liability.)

    See my description of this here. The examples at the McCain Web site show that most tax payers will gain as a result.


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