Subject: [big campaign] NEW STUDY: McCain's Health Care Plan Raises Taxes On Millions Of Middle-Class Families
From: "Adam Jentleson (CAPAF)" <[email-masked]>
To: "big campaign" <[email-masked]>
Date: Wed, 2 Jul 2008 12:27:31 -0400
List-Id: <bigcampaign.googlegroups.com>

NEW STUDY: McCain's Health Care Plan Raises Taxes On Millions Of
Middle-Class Families
<http://thinkprogress.org/wonkroom/2008/07/02/health-care-employment-1/>

This is part one in a series of blog posts explaining the findings of
John McCain's Radical Prescription for Health Care
<http://thinkprogress.org/wonkroom/wp-content/uploads/2008/07/health_tax
es2.pdf> , a new paper from the Center for American Progress Action
Fund. For more, check back here tomorrow and the day after.

John McCain has a radical plan to change the way Americans get their
health care: eliminate the tax break for employer-based health coverage
and replace it with a $2,500 tax credit for individuals and $5,000 for
families. It's one piece of his Bush-like
<http://thinkprogress.org/wonkroom/2008/06/24/nagourney-mccain-health/>
plan to push
<http://thinkprogress.org/wonkroom/2008/06/11/existing-coverage/>
people into the deeply
<http://thinkprogress.org/wonkroom/2008/06/24/elizabeth-individual-marke
t/>  flawed
<http://thinkprogress.org/wonkroom/2008/06/12/families-usa-protections/>
individual
<http://thinkprogress.org/wonkroom/2008/06/04/downward-spiral-health-ins
urance/>  market
<http://thinkprogress.org/wonkroom/2008/05/27/individual-plan-costs/> .

Reforming the tax treatment of health insurance, done right, could be an
important part of health reform. Here's the problem: McCain's plan would
raise taxes on millions of families, falling mainly on the middle-class,
while failing to make insurance affordable for many others, especially
low-income families and people with pre-existing conditions, 

A central flaw in McCain's plan: his new tax credit grows at the rate of
inflation (about 2 percent a year) rather than the rate of health care
costs (about 7 percent a year - which the current tax benefit matches).
In 2009, McCain's credit will cover 36% of the costs of an average
family premium, by 2018 it would only cover 24%. This means that most
families who get health insurance through work will see a dramatic
increase in taxes.

Read the full analysis here
<http://thinkprogress.org/wonkroom/wp-content/uploads/2008/07/health_tax
es2.pdf> .

This chart shows the tax effects on a couple earning $40,000 and paying
$13,800 in premiums each year (the average premium cost in 2009 as
predicted by CBO growth rates).

In 2009, McCain's plan would cut their taxes by $50, but by 2013, as the
value of the credit erodes, this family's taxes would increase more than
$1,100. By 2018, they will be paying over $2,800 more.

It's unlikely that Sen. McCain really wants you to be paying higher
taxes. He is after a different target: a radically different health care
system, where families pay more of their own costs and choose among
deregulated insurance companies. But few families facing a hefty tax
increase will consider themselves better off. 

UPDATE: Jonathan Cohn at The New Republic has more
<http://blogs.tnr.com/tnr/blogs/the_plank/default.aspx> .

http://thinkprogress.org/wonkroom/2008/07/02/health-care-employment-1/

-----
Adam Jentleson
Communications and Outreach Director
The Hyde Park Project, Center for American Progress Action Fund
202-247-8614

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