There’s the Robin Hood:
A little-noticed provision in President Obama’s new jobs bill seeks to tax healthcare benefits for the wealthy, a controversial idea that went nowhere during the healthcare reform debate.
An administration official said, “This proposal is part of a balanced deficit-reduction plan that includes closing corporate tax loopholes and asking the wealthiest Americans to pay their fair share. Currently, individuals and families in the 35 percent tax bracket receive $0.35 off their taxes for every $1 in tax deductions and exclusions, including employer contributions to health. This proposal would change the limit to $0.28, making the deduction more in line with what middle class families receive today. No individual earning less than $200,000 and family earning less than $250,000 would be affected by this proposal.”
“Employer-sponsored insurance in general is still going to be a great benefit to upper-income people,” said Paul N. Van de Water, a senior fellow at the liberal-leaning Center on Budget and Policy Priorities who has written extensively about the tax treatment of healthcare benefits. “This proposal still means that high-income people get more of a benefit than middle- and low-income people. It’s just capped so the benefit doesn’t continue to rise with income as much as it does under current law.”
And, then, there’s the reverse Robin Hood:
Yesterday, Missouri lawmakers began a special session during which Republicans will try to pay for a business tax cut by eliminating a tax credit that benefits more than 100,000 senior citizens and disabled people.
Missouri Republicans are just the latest in a long list of state legislatures that are funding more corporate tax breaks on the backs of low- and middle-income residents. In this case, Republicans are targeting a property tax credit that helps offset higher rent for some of the state’s most vulnerable citizens: At stake is a tax credit that provides up to $750 for lower-income elderly and disabled people. Called the “Circuit Breaker,” it is designed to be an offset for the property taxes included in the rent paid by people with incomes of $27,500 or less. The tax credit costs $53 million annually. Repeal is part of a package that also would impose limits and sunset dates on credits targeted to developers. The Circuit Breaker tax credit is the only credit slated for repeal.
The Post-Dispatch reports that Republicans have faced such a backlash for trying to repeal the tax credit that the tax-credit package they crafted may be unraveling.
I love this quote:
“Republicans are always portrayed as taking from the poor and giving to the rich, and we didn’t want to do that,” Purgason said.
I wonder why they’re always portrayed as taking from the poor and giving to the rich? Because that’s exactly what they are trying to do? Nah. It must just be another unfair portrayal. They’re the victims in all this, really, when you think about it.
Zifnab
Not enough marketing. Need more marketing. Someone get Rush Limbaugh on the radio to explain why the liberal, communist, Kenyan Muslims are wrong.
bleh
Yeah, all these “facts” and “math” are just Class Warfare!
Everybody knows that it’s the rich who create jobs, and jobs are important, so we should give more money to the rich.
Besides, what do senior and disabled citizens do for US? Do they work? Do they pay taxes? No! They’re just burdens on society. We just can’t afford to coddle them in a time of belt-tightening!
Kay
@Zifnab:
It’s clever, I’ll give them that. “Sunset” and “limit” the tax credits to developers and REPEAL the tax credits to elderly and the disabled.
That’s fair and balanced, right?
The Dangerman
Must give the job creators all those tax breaks; indeed, why even tax the job creators, because any tax rate higher than zero leads to uncertainty and job creators won’t create jobs under uncertainty. Even better, I think job creators should get government subsidies along with their zero tax rate and those subsidies should never be repealed because that would be a tax increase and that would be uncertainty.
Now, let’s talk about those regulations; we’ll start with clean air, then work our way towards workplace safety; when we reach child labor laws, maybe we will stop.
/plain white tea-shit
Villago Delenda Est
“Dennis Moore Dennis Moore riding through the moor
Dennis Moore Dennis Moore on his horse Concorde
He robs from the poor, and gives to the rich
Stupid bitch.”
The truth hurts, doesn’t it, asshole?
catclub
They are persistent. That reduction in deductions has probably been in every single bill Obama ahas submitted since Jan 2009.
It has also been routinely ignored by the congress, both before and after the 2010 elections.
Elie
Its so tiring to ask again why the Democrats don’t exploit this. My cynical answer is because a fair number of them do not oppose bennefiting the rich over the needy… Democrats just aren’t as flagrant about it. The Republicans know that they can take a more extreme line because they will not be called on it cause the Dems are frequently just a few degrees different from them. The American people know isolated facts, but without a political party or organization that is willing to put it together for them, well, they never quite do so themselves, it seems.
No worries though. If the evolving world financial crisis keeps growing, a whole lot of “truth” is going to come out and there won’t be anymore lying about any of this stuff… We all will be equal — at last.
Warren Terra
You could make a pretty good case that all health insurance benefits should be taxed, like other nontax income – with, of course, the tax code accordingly rejiggered to make it as fair and as progressive as possible.
It’s not entirely clear to me why our healthcare system is so much more expensive and suffers a higher medical inflation rate even than other systems using private insurance (albeit highly regulated private insurance) like Germany and Switzerland. Still, under our system those people who do have good insurance often don’t see its full cost and especially don’t often realize that – between federal and state income tax and the employee’s and employer’s portions of the payroll tax – their health insurance usually is getting a tax-immunity subsidy of at least a third of its cost, and often more. This while the uninsured are by definition not benefiting from such a tax exemption, and the underinsured aren’t getting the benefit much either. This distorting subsidy, with its benefits concentrated on the upper reaches of the job market, can’t be a good thing for either efficiency or justice in our health care system.
kay
@Warren Terra:
I agree with you, but unfortunately, many Democrats (and all Republicans) don’t.
This (relatively) small change in the tax is like pulling teeth, so I have to assume this tax situation is supported by many, many lobbyists.
schlemizel - was Alwhite
Republicans in MN where able to steal this same sort of credit from the poor in last years budget debacle. Gov Dayton (D) claims he knew about it but went along in order to get a deal to get the government operating again. Somehow they failed to notify anyone else in the state about this. Word is slowly filtering out but seems to not be gaining traction
Saw a special on Hubert Humphrey, I was only able to stay awake for the first bit which looked deeply at his work on civil rights. His clashes with Strom & the Dixiecrats, how he brought civil rights legislation up every year he was in the Senate that got shot down and how he did all the heavy lifting to get the ’64 act passed. (I love Hubert but think they under reported LBJs effort – not to say HHH didn’t carry the burden to get it done).
The bastards filibustered for 2000 HOURS, working in groups of two or 3 knowing the bill supporters had to have 51 Senators on hand any time they demanded a roll call. They went home & slept well while supporters had to stay awake or catch naps in their office. I remember the hullabaloo about it but didn’t realize the length the old NC rapist and his pals went to (I wonder how many mulatto children Russel fathered?).
The other thing I didn’t remember was how much religious imagery HHH used to lend moral credence to his call for human rights. If you get a chance to see it (it was on PBS) I recommend it highly.
nellcote
I wonder how many affected people know the difference between state and federal moves.
MonkeyBoy
Back in the days when a large number of jobs came with health benefits it made some sense not to tax them since the recipients really didn’t get that money and the benefit distribution was fairly level.
These days with more and more jobs not providing benefits there it is more reasonable to treat health benefits as income because for those without the lack is really negative income.
Does anybody have info on how many CEOs etc. get really expensive Cadillac health care for “free”.
Paul in KY
@schlemizel – was Alwhite: Listen to FDR also sometime. He used alot of it & it can & should be used, IMO.
The Jayzus that alot of our opponents pretend to worship was pretty down on most of their party’s major planks. I don’t see the downside in bringing up the compassion of Christ all the fucking time. Wrap it around their neck, that’s what HHH & FDR did.
kay
@MonkeyBoy:
My bigger problem with it isn’t CEO’s getting something “free”, but ordinary workers trading wages in the hand for an insurance policy that may or may not pay out. I don’t think that’s necessarily a great deal, to have lots and lots of insurance but lower wages. I don’t know that people should trade two free pairs of eyeglasses every year for a wage increase. I feel as if any amount of health insurance has been sold as an unalloyed good, a “benefit”, but insurance is just a promise to pay, and being over-insured is a great deal for no one except insurance companies.
I think it got out of control, and lessened the leverage middle class or working class people may have had on actual wages.
Mino
@kay: Even worse than that was the way the Supremes lets corporations loot pension funds when those pensions were a part of the wage packet of workers.
kay
@Mino:
Right.
Wage packet is a good phrase. And it can work both ways, both to the detriment of working class people. When we WANT to include benefits as part of a wage package (when we’re arguing hourly workers are over-paid) , we do that too!
We break it out hourly for working class people if and when it suits the narrative, ie: media treatment of auto workers, who make A ZILLION DOLLARS an hour if we COUNT health benefits!
That doesn’t apply to professionals and managers, who of course aren’t paid by the hour. For some reason, the money value of their “benefits package” is never included when we’re talking about what they’re paid.
trollhattan
I hereby de-clayah that when the final
shackletax is removed from the last corporation, biznezz uncertainly will at last be banished from this gray-ut nation and the job creators will at long last, be able to create them some jobs.Brachiator
I expect this behavior from Republicans. I don’t expect the Democrats to go along with it.
lou
@kay: Not only that but during the whole BS about “look at what great pensions teachers receive” no one ever mentioned that half of teachers don’t get social security benefits in lieu of their pensions. So if you added the private workers’ retirement benefits to their social security benefits, guess what. it equaled teacher benefits.
We as a nation suck.