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McCain Health Credit Could Morph Into Tax Hike
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ShareJuly 02, 2008 7:20 PM
ABC News' Teddy Davis and James Gerber Report: Sen. John McCain's, R-Ariz., health-care plan would replace the existing tax exclusion for employer-sponsored coverage with a refundable tax credit for all Americans. The tax change is intended to create a more equitable system that provides everyone -- including those who do not receive their health coverage from their employer -- with the same tax advantage. And since it is refundable, it would provide a cash benefit to those who earn too little to pay federal income taxes.
But if the cost of health care continues to outpace inflation in the economy at large, McCain's health credit would morph into a tax hike for those who currently receive a tax exclusion for employer-sponsored coverage, according to a study released Wednesday by the liberal Center for American Progress.
"For millions of middle class families, the credit is smaller than the current tax subsidies, meaning that it is in fact a tax increase," said Elizabeth Edwards, the wife of former Sen. John Edwards, D-SC, and a senior fellow at CAP. "I know he's pledged not to have any tax increases, but this in fact will work as a tax increase."
McCain's tax credit could morph into a tax hike because the credit grows only at the rate of inflation (about 2 percent a year), while current tax subsidies keep up with health insurance premiums (which are growing at about 7 percent per year).
For a couple earning $40,000 per year and paying an average premium of $13,800, McCain's new tax credit would cut their taxes by $50 in 2009.
"[B]ecause the credit quickly falls behind rising premiums that are the basis for the current tax break, the family would pay $1,169 more in taxes in 2013. The family would pay $2,809 more in taxes by 2018," write James Kvaal, Peter Harbage, and Ben Furnas, the report's authors.
The McCain campaign does not dispute the study's assertion that the Arizona senator's proposed tax credit would offer a smaller subsidy over time than the current exclusion if health premiums continue to grow more quickly than inflation.
The McCain campaign is hoping, however, that its tax credit will exert downward pressure on prices.
It is also hoping that other reforms favored by the presumptive Republican nominee will lower costs, making his tax credit sufficient.
"John McCain believes that the fact that health care spending outpaces inflation by a factor of three is exactly the problem, and is exactly why health insurance is increasingly out of reach for Americans," said McCain spokesman Brian Rogers. "John McCain's plan includes prevention, affordable drugs, greater use of health information technology, coordinated care, and medical liability reform to address the rising cost of care to reverse this trend."
July 2, 2008 in Hunter, Duncan | Permalink | User Comments (46)
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I'm sure we can believe what John Edwards wife has to say. LOL
Posted by: Giovanni | Jul 2, 2008 7:34:12 PM
Ruh-Roh! Did you just say John McCain and tax increase?
Calling Grover Norquist.
Posted by: Jeff C. | Jul 2, 2008 7:37:21 PM
Just answer me this. Who in the hell making $40,000 a year can afford $13,000 in health care premiums? Are any of theses people including McCain living in any kind of reality?
Posted by: Thinking | Jul 2, 2008 7:39:31 PM
Headline: "McCain Health Credit Could Morph Into Tax Hike".
Headline in four years IF McCain wins: "McCain Presidency Morphs Into Disaster".
Posted by: Jeff C. | Jul 2, 2008 7:39:54 PM
Right now we just need to focus on defeating John McCain.
Posted by: Giovanni | Jul 2, 2008 7:52:22 PM
What McCain's program doesn't include is making sure people can actually buy health coverage. If you've ever smoked, are overweight, or have ever been sick, you don't have to worry about premiums or tax credits - there won't be coverage available.
Posted by: Nancy | Jul 2, 2008 8:02:40 PM
FACTS REGARDING JOHN MCCAIN'S PLAN:
FACT 1.
John McCain wants the health insurance companies to be regulated by the state of their OWN CHOOSING, rather than the state they are operate in, as is now the case.
Say GOODBYE to all consumer protections.
Say HELLO to all disputes going to "arbitrators" sponsored by the health insurance companies!
Posted by: John's conscience | Jul 2, 2008 8:14:09 PM
FACTS REGARDING JOHN MCCAIN'S PLAN:
FACT 3.
John McCain has never said it is immoral for a great nation to allow people without insurance to suffer and die without treatment.
Posted by: John's conscience | Jul 2, 2008 8:24:10 PM
FACTS REGARDING JOHN MCCAIN'S PLAN:
FACT 4.
John McCain says he wants to reduce the rate of medical inflation.
But what he doesn't mention is that his METHOD for reducing the cost of medical care is to make sure that the middle class CAN'T AFFORD it, thus reducing demand!
"BAA BAA BAA":
That's the sound of YOU, as John McCain's sacrificial lamb.
Posted by: John's conscience | Jul 2, 2008 8:33:11 PM
Hello. John McCain. We didn't all dump our wives and marry the boss' daughter (worth over $100 million). Pls come back down to earth with the rest us real Americans. You're embarassing us fellow military vets.
Posted by: CMSgt Gary Preston | Jul 2, 2008 8:33:46 PM
What would Ron Paul do? He probably has the correct approach.
Posted by: James | Jul 2, 2008 8:56:18 PM
Wow. Now that's a turkey. Yet Another We Fix This Code and That Money Magically Appears Solution. ???
Do either of these candidates understand what $4 dollars a gallon of gas is doing to people with fixed incomes RIGHT NOW?
Or do they just not care?
You want my independent vote? Tell me how to save the seniors on fixed incomes. I'm not one. I just don't like seeing old people and the very poor pushed onto the streets by the greed of the wealthiest .001 percent.
It sucks. Really. You won't get your bridges fixed starving our mothers and grandmothers.
C'mon McCain, show some spine on this one. It's your generation.
Posted by: len | Jul 2, 2008 9:08:17 PM
Ahh the Republican health care plan: "Pray you don't get sick..." And the Democrat plan: "let's mandate coverage, micromanage everybody's life with the health care police, and fee everybody to death who has the gall to actually choose to live how they wish. Oh and, of course raise taxes to pay for the newest big government health plan that promises to bankrupt what's left of the country while we continue to fund all of these merry wars. Folks, for your country and least of all for yourselves... Vote OUT the darn incumbents will ya??? What have they done in the last eight years for you that has made your life better... WHAT?!! Just vote out these pathetic paralysis stricken phonies, and let's just start over with some folks we can hold accountable for their actions. Otherwise, SHUT UP, and just keep taking the abuse they keep dishing while your quality of life and your checkbook IMPLODES!!! You can hang them out to dry, or they can hang YOU, what'll it be folks... what'll it be???
Posted by: pity | Jul 2, 2008 9:12:16 PM
McCain's problem is that he doesn't understand people's budgets. You can't just raise people's taxes to force them to get insurance on their own just because of a report written by some bozo at an industry-funded rightwing think tank. Under McCain's plan, insurers will be able to shop from state to state for favorable regulations. For instance, they will dodge regulations on pre-existing conditions. So McCain's plan is to force people out of coverage from their employer by raising the tax on it then make them renegotiate coverage of existing conditions. He thinks that's going to lower inflation? He's either economically illiterate as well as computer illiterate or he thinks we are. Forcing people to renogotiate coverage of pre-existing conditions will raise their costs. Of course, it will probably also raise profits for McCain's "friends" so he doesn't care about the people. This is in keeping with his favoritism towards "his friends" going back to Keating.
Posted by: Jeremy | Jul 2, 2008 9:25:55 PM
Whats This?
Another "Tax and Spend Republican"???
Tax everyone to give more to the wealthy? And disguise it as a 'health care plan'? The spin on this one is more intense than a carnival ride!
And now, Colonel Bud Day is on the payroll? One of the prominent figureheads in the Swift Boat scandal unleashed by the Republicans against John Kerry? The very same guy McCain denounced in 2004?
And now we are seeing the 'hot-head' side of McCain? One breath away from launching war weapons?
Its starting to look like McCain is senile. Or absent minded. Wow, this is really getting scary!
Posted by: Mickey | Jul 2, 2008 9:28:32 PM
Just answer me this. Who in the hell making $40,000 a year can afford $13,000 in health care premiums? Are any of theses people including McCain living in any kind of reality?
Posted by: Thinking | Jul 2, 2008 7:39:31 PM
44444444444444444444444444
Why would McCain care about the average american when it was reported his wife put 750,000 3 quarters of a million dollare on her credit card last month. And one of their children has a fifty thousand dollar balance on his credit card.
And Rove, Mccain and republicans are trying to paint Obama as elitist. Good grief what a bunch of selfish elitist low lifes.
Posted by: Merri | Jul 2, 2008 10:23:34 PM
Hey libs, Check with the Amish re health care. Might expand your horizons. Nah.... no way!!
Posted by: Temagami | Jul 2, 2008 10:28:19 PM
Merri.
How reveling!! All by yourself!!
Posted by: Temagami | Jul 2, 2008 10:32:02 PM
Hey Thinking. Weren't you that guy who was a Marine on active duty who was knocking his superiors for NOT bringing in Osama??
Posted by: Temagami | Jul 2, 2008 10:35:06 PM
Hey libs!! Please keep knocking McCain for his service record, as it has been credited for pro McClain backlash on same, especially since Obama DOES NOT HAVE ANY MILITARY RECORD!!
Posted by: Temagami | Jul 2, 2008 10:40:21 PM
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