As reported in this morning’s Washington Post, the Congress is putting more and more fuel into their efforts to turn the nation’s Capitol into a modern-day Menlo Park in terms of its ability to innovate new ways of squeezing money from the economy and the American people.  As Lori Montgomery, Washington Post staff writer, reports:

With President Obama’s plan to tax the rich to pay for health care facing deep skepticism on Capitol Hill, key lawmakers are pressing a different way to raise money: taxing the health benefits workers receive from their employers.

The move to consider healthcare benefits as income, for the purpose of calculating taxes due the federal government, is being led by Senator Max Baucus (D-MT) but also includes sponsors like Senator Ron Wyden (D-OR). 

Now, if this idea sounds familiar to most of you, it’s because the idea of taxing healthcare benefits was proposed last year by Senator John McCain (R-AZ) in his run for the presidency. (In fact, this story comes to us by way of the recently Twitter-indoctrinated McCain.) Because of the McCain campaign’s horrendous communications strategy it will therefore be lost on many voters that one important portion of the McCain insurance plan is missing from this current concept: The credit to the taxpayer that made it possible for them to take control of their own insurance if they desired.

Without a compensating tax credit the taxpayer loses on both sides.  Businesses (small businesses, in particular) will reduce wages to offset increased payroll tax burdens, or they may opt to reduce healthcare coverage, but the option of finding healthcare coverage outside of the options supplied by their employer is a false one.  Even in the case that the employer offers employees a dollar-for-dollar pay increase, should they elect to forgo company-provided coverage, the employee would be left to cover the same amount needed for coverage.  This is could be then an across-the-board wage cut for all American workers who get their healthcare insurance through their employers.  

Why would American voters support a measure like this?  Senator Wyden lays out the rationale that the Democrats will be hawking:

“I think it’s extremely important from a credibility standpoint to show the American people that you’re making savings in the enormous sums now being spent on health care before you go out and ask them for billions of dollars more,” said Sen. Ron Wyden (D-Ore.), one of the sponsors of that proposal. “And I don’t think I’m the only senator who feels that way.”

So, because the Congress has been spending so much of our money on healthcare, we’re now supposed to feel as though we’re not paying enough into that Frankenstein’s monster of a system?  We see the lipstick on the tax committee chair’s collar and it matches President Obama’s shade. 

There are legislators on both sides of the aisle pushing that idea that restructuring the way healthcare insurance is sold primarily through employers is a large part of solving the problem.  The difference between the two camps is what happens after the shift.  Everyone seems to want single-payer healthcare.  Politicians like McCain want the payer to be the individual so that a marketplace can prosper in which price and product competition will improve the overall options for Americans.  Obama wants the payer to be the federal government. 

By making employer-provided healthcare coverage less affordable, while reducing the amount Americans have to spend to obtain individual coverage, the as-yet-be-named Obama healthcare agency of the future would be positioned to offer a price-fixed alternative plan to families shopping for insurance.  Like shooting holes in a barrel, finding households willing to sign on to a national healthcare plan would be much easier than it would if private insurers could compete dollar for dollar.

This is an issue that Republican lawmakers can take action on.  There are compelling arguments to be made for taxing healthcare benefits, and the inclusion of tax credits in the package could be enough of a bartering chip to produce the first real bipartisan piece of legislation to cross President Obama’s desk.  We will not even give him a hard time when he bars press coverage for the signing of the Baucus-McCain Liberty in Healthcare Act.

(UPDATE: Michelle Malkin is passing along a New York Times story on the same topic.  I am glad not to be the only one who thinks this is a sneaky tax on the poor.)

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