Free Markets, Free People

Lefty Blog Discovers Regressive Tax In Baucus Health Care Bill

Now one can only hope they’ll take as close a look at cap-and-trade. Anyway, FireDogLake discovers the following:

An excise tax on high-end health insurance benefits is an extremely regressive tax on the middle class. Even though Ezra Klein claims this tax is progressive, it is not. It would raise relatively little money from the wealthy.

It is true that the bottom 30% is unlikely to pay very much of the new excise tax, but ,by the same token, the top 0.1% will pay almost none of it either.

This is the middle class tax of all middle class taxes. Many, many middle class people work for companies and corporations which offer health care plans that are above and beyond the average for such plans the Baucus bill has set. The so-called “Cadillac” policies are nothing more than those whose cost is above that average. The intention, of course, is to tax them to pay for the bill. The result will be one of two things – a reduction in the benefits to meet the average and avoid the tax (thereby drying up one of the revenue streams this bill depends on to fund it) or, if a public option is involved, withdrawing their present plan in favor of dumping their employees in the public option plan and paying a fine (which is sure to be less than paying for and administering a plan of their own).

In every way the middle class gets screwed. It either ends up paying the increase in cost that the tax entails, or it sees it’s benefits cut to avoid the tax, or gets dumped into a public option if that’s available.

Calling the plans the Baucus bill targets “Cadillac” plans is just another example of identity politics used to marginalize those who are the targets of the tax. It is an attempt to wring any sympathy for the victim out of the process by implying it will be the rich who are effected. As FDL has discovered, that’s not the truth at all.

But then, the truth is rarely to be found existent when politics is in play.



Tweet about this on TwitterShare on FacebookShare on Google+Share on TumblrShare on StumbleUponShare on RedditPin on PinterestEmail this to someone

8 Responses to Lefty Blog Discovers Regressive Tax In Baucus Health Care Bill

  • If what you have written is accurate, there is a horrible feedback mechanism built into it as well. If the level at which plans are taxed is computed off of the “average” rate of plans that exist, what happens when some plans that are higher than average lower their coverage so that rates can be closer to the average? Well, the average will go down, meaning there are now more “Cadillac” plans out there. These plans will, in turn, try to lower their costs to be below the new average, which lowers the new average. Nice unintended consequences there.

  • Watching cable news this morning, 70% of those receiving healthcare benefits are on what is considered ‘Cadillac’ plans.

  • The full extent of the effects from lawsuits challenging the constitutionality of the “plan” and the “Law of Unintended Consequences”, makes “healthcare reform” the biggest “coin toss” in US history.

  • Oh! Quelle surprise! Oh! Oh!


  • well, it is certainly a middle class tax, but not truly regressive. If it were I would support it. I believe that if you subsidize something you get more of it, and if you tax it you get less. That is why I think we should repeal the income tax amendment, repeal all property taxes, and go for a strait national sales tax (not a VA tax). Then the poor, the criminals, and the illegals would finally pay their fair share, and you might have some people decide to get up off their ass and work.

  • McQCalling the plans the Baucus bill targets “Cadillac” plans is just another example of identity politics used to marginalize those who are the targets of the tax.

    I was struck very forcefully by how the dems are balkanizing the country and playing groups off against each other in a desperate attempt to pass SOMETHING when I saw a commercial this afternoon. I don’t recall which (phony front) group was running it, but the gist was that we NEED health care reform, but we’ve got to be careful how to pay for it, and that, instead of taxing so-called “cadillac plans” (which will hurt middle-class Americans), we should make those earning more than $250,000 “pay their fair share”.

    How nauseating. A more blunt, honest commercial would simply have had a spokesman say, “I want somebody else to pay for my health care.”

    Have we really degenerated so much as a country and as a society, where we look at each other as potential victims that we can somehow fleece to pay for our own lifestyle choices? We dress it up in righteous language to salve our consciences (it’s not stealing; it’s making that dirty b*stard X pay his fair share), but that’s basically what we’re doing.

    For shame.

    And the fact that Congress is scrambling so desperately to find SOMEBODY that they can shaft with the bill (or, at least, APPEAR to shaft; there ain’t that many people in the country making $250k to pay the huge cost of the Baucus “bill”) ought to tell us something not only about how morally degraded we’ve become, but also just how friggin’ much this thing is going to cost.

    • Doc, pitting one group against the other is what the Democrats are all about, have been since the old days of Tammany Hall. It is race baiting, class warfare, sex warfare, and always has been. They have never wanted a united people, whenever the people are untied, they lose.

      • The thing that bothers me is that it’s not just “the dems”: there are plenty of people who are essentially apolitical (apathy, disinterest) who have learned that it’s not only OK by COMMENDABLE to try to get something for free by shafting somebody else, or more accurately, that they are OWED something. Free education, free health care, free HDTV, free this, free that. Gimme, gimme, gimme. Politicians from both parties cater to parasites like this to get votes: “Vote for me and I’ll give you X, because it’s your right to have it!”


        I don’t see an end to this trend. As I’ve written before, no politician is stupid enough to run on a platform of, “Vote for me and I’ll take stuff away from you!”