Free Markets, Free People


Governmental 3 Card Monte

A week or so ago, I highlighted a story about the possibility that Democrats were going to tax your employee health care benefits (after all, those among the 95% who are getting a tax cut have to have something to spend it on) and I was assured this particular plan comes up all the time and never gets out of committee. Well it appears those assurances of nothing to worry about were premature. The idea may not only get out of committee this time, but be signed into law as well:

The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.

So you’ll pay taxes on your private health benefits to pay for health benefits for others, while government tells you how expensive your private coverage is and how they can run it much more cheaply and efficiently if only you’ll pitch in and pay for it.

Question: If taxes on your health care benefits are going to pay for a governmental health care system overhaul, and one assumes the purpose of the overhaul is to bring more and more of the health care system under governmental control, how will government “pay” for all of this in the future when you no longer have private health care benefits to tax?

Read the whole article.  It doesn’t even take a double digit IQ to spot the law of unintended consequences laying in the weeds just salivating over this one.

~McQ

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15 Responses to Governmental 3 Card Monte

  • Well, I do support equalizing the tax treatment of individual and employer-based health insurance… and taxing benefits would logically lead to firms increasing the ratio of wages to benefits in total compensation.

    That’s what they call the “silver lining.”

    • Part of the problem with our health care system is that under FDR, healthcare insurance went untaxed, encouraging employyer provided healthcare insurance, and consequently insulating patients from costs. The result was high prices.

      Putting the tax back onto healthcare insurance would fix this problem. But Obama isn’t going to stop there, he’s gonna move forward and cause damage. 

  • I get the feeling that the goal is to tax everyone’s expendable income into the gutter so people will have no choice but to be happy when gov’t provides them with a service.  Few people know how much their health care costs now.  Few if any realize how much hidden taxes and fees passed onto them dilute their purchasing power now.  Who will be able to argue against the system if they have no idea the true cost or the true benefit?  Most will just go on assuming that it’s only costing them 30$ for every 100$ of benefits, and “the rich guy” is paying that other $70.  Think social security on steroids.  With a pituitary adenoma secreting GH.  

    • I agree.  When you combine the direct cost of insurance that people see when they look at their pay stub with a tax on those benefits, why wouldn’t people be quite interested in a “free” insurance program run by Uncle Sugar?  Which, it seems obvious to me, is exactly what the democrat scum have in mind.

      As I have written before, it never ceased to surprise me that democrats (spit), who wax hysterical over the idea that the the government might be listening in on their phone calls, have no trouble handing over their health care records to that same government.

  • Erb?  Anything pithy to say about this?

  • Uh, Bryan, silver lining? Silver lining?! This is a tax increase, but if that’s your idea of good equality, geez… And you really think that employers will increase wages instead

    Calvaria, you are correct. Now connect all the dots. Ever since the campaign, Obama has talked about a government-run health insurance program to compete with private insurers. So by taxing private health insurance benefits, the government program can be even more artificially competitive. Now, with so many companies cutting costs, you can bet a lot will drop all private-based coverage and tell employees to sign up for the government program — meaning many employees won’t even have a choice to go with a decent private insurer.

    The Obama administration doesn’t mind any perceptions of “spendthrift but at least incompetent.” It’s hardly incompetent. This is so diabolical and so subtle that it’ll slip by most Americans until it’s too late.

    • High income taxes, combined with no taxes on employeer provided insurance, has driven the healthcare insurance system we have. It’s a market distortion, with unintended consequences–high prices.

      Covered patients don’t shop around for low cost healthcare, and this drives up healthcare costs, and also drives the system to managed care. Eliminate the tax break, and we can go back to a rational system.

      Eliminate the tax break, but lower income taxes over all.

  • The Obama administration is signaling to Congress that the president could support taxing some employee health benefits,

    Didn’t Obama blast McCain during the campaign over this very issue?

    All you Obama supporters:  do you have any defense for this?

    • This is why my mom voted for Obama over McCain!  This one issue!  “McCain’s going to tax my health care.”  I know she doesn’t follow politics as closely as I do, and I really don’t have the heart to tell her she’s been bamboozled.

      • McCain was going to tax health insurance paid for by companies, but he was coupling that with a tax break for individuals buying health insurance. He was trying to decouple health insurance from employment.

        Really, business provided health insurance became what is is today because of Nixon’s price and wage controls. Wages were frozen while they passed a law made paid-for health insurance tax exempt.

  • We need to begin deducting all the “charity cases” our taxes are mis-er-re-appropriated for through our taxation.  I’m personally so sick of the tax burden we bear that I’m openly scolding anyone at the grocery store that dares use a food stamp card while also purchasing with “their money” beer, cigarettes, lotto tickets, junk food or any other non-staples product of excess lifestyle. I recommend others try it.  When you pronounce “How Dare you buy food with MY money and garbage with YOURS. When you are able to buy your own damn food, then perhaps you can buy junk. Until then, I demand you put it away since I’m the one paying for it!” loud enough for the people 3-4 aisles over to hear, it’s really very liberating.

    The reactions I’ve had are interesting. Most result in STFU scowls but the point was clearly taken. When they continue to buy those products, I’ve even chatted with the cashier about the products “I’m buying” – often commenting on the name-brands and laughing at my own inability to afford such higher cost products. While I’m buying store brands for myself, I’m apparently good for the fancy products for the deadbeats.  Of course, you’ll have an occasional indignant thief who is under the delusion that the “government” is paying for all of this (actually, with Obama’s inflation quest, there is some truth to that, though we’re all technically obligated to repay our debts and even with massive run-the-presses inflation, we do realize it through our devalued assets).

    The point, however, is to return welfare to a shunned status. Those who do not pay income taxes but rather are payed instead, those farmers who receive conservation reserve payments and other welfare funds to keep land idle, and all others who receive funds from any government other than those for payment of services or goods renedered, are shameful parasites.

  • Like Bryan, I actually support taxing benefits in the theoretical.

    But after learning that private insurance subsidizes Medicare bills, I have to wonder what this will do once the balloon pops.

    Private insurance patients are profitable for hospitals (40%+ margin) and they use these to offset the Medicare patients (losing 40% margin.) If there are less privately insured individuals, then the price of care must increase to “cover” the bill for Medicare.   Helathcare will get more and more expensive as a smaller base must cover Medicare.

    People who think there will be savings in nationalized healthcare are going to be sadly mistaken when the final bill comes in.
    This is not even including the waste and fraud aspect!

    • Interesting. Back in the day when Medicare patients paid the most, it was called “Medicare fraud”. I doubt the .gov considers overpayment in the private sector fraud.

      If doctors can’t afford to treat medicare patients, so be it.

  • “how will government “pay” for all of this in the future when you no longer have private health care benefits to tax?”

    My guess is they’ll follow the Canadian payment model.  Payroll taxes.  Lots of them. 

    All the horrors of nationalized healthcare without the competitive benefit of the government unburdening that cost off its companies.