He who getteth the Cadillac plan should payeth the darned tax
I really like the idea of a tax on “Cadillac health plans,” and have said so before. After all, it is generally the richest folks who wind up getting the best gratis health insurance, so why not tax it to help pay for insuring those who can barely afford a bare bones plan?
But I cannot for the life of me understand why Senator Max Baucus, and many before him, are proposing that insurance companies be taxed on the luxury health plans that they sell, rather than simply treating the Cadillac plans as taxable income to the lucky policy holders.
The insurance companies will simply pass the cost of the tax along, in the form of higher premiums. And what is to prevent them from spreading that cost among all their products, thus raising the premiums for plain vanilla plans along with those for luxury plans? This is a system simply crying out to be gamed by the fat cats, whose secretaries will face higher copayments and/or premium deductions even as the bosses pay a pittance more for their stellar policies.
And please, please, please, Congress, if you pass a version of this, put in variations by state — New Yorkers and Bostonians, I’m sure, pay twice as much for the same coverage as folks in Des Moines.
And please, pretty please, Congress, put in yearly reviews of the dollar level at which Cadillac status kicks in. With premiums constantly rising, more and more merely-adequate plans could find themselves costing what Cadillac plans cost today. We have to avoid a situation like the alternate minimum tax, which was never adjusted for inflation and now ensnares any number of middle class folks.
I hate it when a good idea gets so subverted in the execution!
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From a math guy’s point of view, many of the government’s tax calculations are distressingly simplistic. You make good points about common pitfalls of inadequately thought-out tax schemes, Instead of politicians prescribing the scheme, the politicians should set a revenue goal, describe the acceptable targets of taxation, and then let professionals figure out the most effective way of implementing the tax. In particular, because computers can recalculate tax rates almost instantaneously, those in the top 1% should not know their tax rates and what kinds of income will be taxable until the year is over. Otherwise, they will just figure out how to avoid paying.
Whoa…tax planning should be illegal? I think you’re a bit over the top on this one, misterb.
In response to another comment. See in context »Not illegal, just more difficult. In fact, what I’d like to see is a flat tax with a variable rate at the very top end. We spend too much of our energy trying to avoid paying taxes as a society; if it was so simple it couldn’t be gamed, we all end up better off (unless you’re a tax expert)
However, I’m not firing my own accountant yet;
In response to another comment. See in context »I actually don’t know where I stand on a flat tax. I think the current tax code is ridiculous, and the fact that people at my salary level need an accountant is outrageous. But the idea that folks with heavy medical bills shouldn’t get a tax break, or that charitable donations shouldn’t be deductible…hmmm…
In response to another comment. See in context »Do you have an antidote for the Obama elixir as prescribed by George Soros and the far left? As shown in this video, I wish we had more congressmen like John Hue Pubic who read what he was asked to sign. Watch -http://www.youtube.com/watch?v=WB6p5QPVhPI, but don’t swallow the elixir. After you finish watching the video, ask yourselves these questions.
Why are the public officials we elleted allowing Obama to shred our Constitution? Do you think Obama should remake the health care system with new federal regulations, mandates and big-government? Do you think that taking money from the productive sector of our society and distributing it to the nonproductive will solve all of our problems? Why is congress and other politicians dooing nothing about the Obama czars and other communist- fashist appointees he chose to assist him in shreding our constitution? If the thread http://www.youtube.com/watch?v=WB6p5QPVhPI I posted doesn’t turn live, copy and past it onto Google.
Cybercorrespondent
http://cybercorrespondent.blogspot.com
cybercorrespondent,
Yes, I do think that we should support Obama’s plans for healthcare, and in fact, I think we should probably go further away from the “free” market to ensure better health for all Americans.
I think that health for all is more important than money for the rich. And I think that less money in the hands of the rich makes our society freer.
In response to another comment. See in context »I really don’t see the policy sense in taxing health care plans at all. Why not pay for health care the same way we pay for Medicare, or start taxing things like speculation or carbon?
Those seem to be much more efficient ways to deal with the problem. Taxing health care plans seems to upset just about everyone, and doesn’t do much to help solve the inequalities in health insurance distribution.
Well, paying for Medicare is one of the major problems right now. I’m all for a carbon tax — definitely prefer it to cap and trade — but there’s nothing that says it will be directed toward health care. And it seems to be upsetting as many people as the idea of taxing health care plans. And I’m not sure what you mean by taxing speculation.
There may indeed be more efficient ways to deal with the problem — but so far, no one’s come up with any.
In response to another comment. See in context »Then Max Baucus should call me, and I’ll give him a few
In response to another comment. See in context »better still, let’s send him a link to our blogs.
In response to another comment. See in context »