Bill Jempty has a point questioning whether McCain’s plan regarding taxing health benefits and then refunding some amount is a tax break or not. Let’s hone in on the heart of the matter and remove all complications. Pay attention here.
McCain has proposed to end one of the largest tax breaks in the entire economy. Some 60 million Americans buy health insurance thru employers tax-free, and McCain would indeed begin to tax the value of the benefit.
However McCain also proposes to give the money back as a tax credit, $2,500 for individuals, $5,000 for families.
“Let’s give them a $5,000 refundable tax credit to go out and get the health insurance of their choice,” McCain said.
Let’s cut to the chase.
When the government takes your money first, then decides to give some of it back (sans interest), this is little more than a shell game with your money. “First I’ll take it. Then, I’ll give it back. Cool, huh?” No. Uncool.
The problem here is no different than the problem Nancy Pelosi has with the term “incentives,” where she deems taking more taxes from energy companies is an incentive to produce alternative sources of energy. Well, it’s not the same in that she never intends to see the money back to its original source.
Regarding McCain’s proposal (as I understand it), if the government is going to take your money, it should not be portrayed as benevolence when it returns a portion of it. One too-simple concept might be to not take it in the first place.
But the issue at hand is governmental control. With the McCain tax proposal at issue here, the government is deciding what you will do with your money – a “refundable tax credit” for the express purpose of purchasing health care.
Further, if the “credit” is indeed intended to be a flat “$2,500 for individuals, $5,000 for families,” this is hardly more than income redistribution under the moniker of a “tax break.” I am not opposed to programs that assist the needy. We, in fact, have quite a few massive ones already in place. But for heaven’s sake, at least call it what it is.
I have no idea yet how such a plan would effect my family, whether positively or negatively or to what degree. Less than 4 minutes with my records will reveal easily enough. But the argument here is on principle alone.
- If the “tax credit” is flat, call it what it is: Redistribution.
- If it is not, stop taking our money only to then give it back to us with usage restrictions and calling this practice at “tax break.”
Straight talk, please.
But of course, the alternative is the economy-breaking Obama alternative of wholly nationalized health care – so that we can ostensibly compete with Cuba. Pardon while I politely pass on Option B, with objections to the apparent Option A.
UPDATE: Please see RE: RE: ‘Tax Break?’ (Thank you, Sabba.)