Obama flip-flops as a hypocrite-- into a tough political position-- but finds the best economic answer!
Wow...what should I root for here?
I'll root for his new-found embrace of the best position!
From the New York Times via The Weekly Standard (hat tip: Hoosier Pundit), we learn that the Obama administration is considering a tax on health care benefits.
By far, the #1 problem in health care and health insurance is the subsidy of health insurance by the federal government. (It is subsidized since it is an untaxed form of compensation for workers.) The result is "too much insurance" and a problematic connection of health insurance to one's place of employment.
The best solution, in terms of economics, is to remove the subsidy-- to treat all forms of compensation the same in terms of tax liability. But this a very difficult position politically. On top of that, Obama attacked McCain for the very same position during the 2008 campaign.
Here's one of the several health care ads Obama put up during the campaign lambasting the idea of taxing health care benefits. Note the quotes from Joe Klein, who will no doubt soon charge in to criticize Obama's audacious reversal. Another ad, featuring Obama attacking the issue in his own voice, can be found here.
Then, there's this from the editorialists of the WSJ. They point to Obama's underlying motive-- to raise tax revenues. But a far more important by-product would be achieved by his avarice for your money.
The worst-kept secret on Capitol Hill is that Democrats have always planned to tax health benefits to pay for their "universal" health-care plans. Now White House aides are whispering that they're also open to the idea. Maybe they will all now apologize to John McCain for trashing his proposal to do the same thing in the Presidential campaign.
Democrats are desperately searching for the $1.2 trillion and more they'll need to subsidize middle-class health coverage. With deficits already at epic levels, more spending is politically a harder sell. So they're now circling the tax deduction that employers receive to offer insurance to their workers for the same reason that Willie Sutton robbed banks, because that's where the money is.
Most likely, Democrats will cap the exclusion by income or cost of the health plan, so that those with the most gold-plated benefits pay more for the privilege....