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Obama Must Tax Employer Health Insurance

To pay for new system, he must tax old 'crazy' one: Reich

By Kevin Spak,  Newser Staff

Posted May 26, 2009 12:25 PM CDT

(Newser) – During the campaign, Barack Obama was scathing about John McCain’s plan to tax employer-provided health benefits. But Obama’s going to have to bite the bullet and tax them himself if he wants to pay for his own health care initiative, writes Robert Reich in Salon. Now that Congress has killed Obama’s original plan to raise funds by cutting tax deductions for the rich, it’s the only way to generate enough revenue.

Tax-free, employer-provided insurance basically is the current government-backed health-care system. “But, face it, it’s become a crazy system,” Reich argues. Essentially, the government will only help you if you’re employed, and it’ll completely subsidize even the most gold-plated executive health package. Obama could pay for universal health care just by taxing health care for employees making, say, more than $100,000. That seems sane, and politically feasible.

This May 18, 2008 file photo shows Robert Reich, Labor Secretary during the Clinton administration, giving his commencement speech at California State University.
This May 18, 2008 file photo shows Robert Reich, Labor Secretary during the Clinton administration, giving his commencement speech at California State University.   (AP Photo/California State University, Fullerton, Kelly Lacefield)
President Barack Obama speaks at a Memorial Day ceremony, Monday, May 25, 2009, Arlington National Cemetery in Arlington, Va.
President Barack Obama speaks at a Memorial Day ceremony, Monday, May 25, 2009, Arlington National Cemetery in Arlington, Va.   (AP Photo/Charles Dharapak)
The current health care system rewards the wealthy.
The current health care system rewards the wealthy.   (Shutterstock)
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COMMENTS
Showing 3 of 5 comments
freethemall
May 27, 2009 2:31 AM CDT
The lower class pays nothing in the way of payroll taxes? By lower class you must mean those who don't work for a wage or a salary. I guess you could mean welfare recipients, or retirees such as my self. Payroll taxes are paid by all who work for a wage, or a salary.
Doctor-Zaius
May 27, 2009 1:32 AM CDT
a small .25% tax on all transactions in the stock market would pay for this AND stop the Las Vegas attitude that led to the bubbles of the past.
Doctor-Zaius
May 27, 2009 1:31 AM CDT
"Your an idiot" please Corona King, it's "You're an idiot." You idiot.

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