Taxing Health Benefits: A Pocketful of Mumbles

This is related to my last post on health care.

ABC News is reporting that Congress may tax your employer-provided health care benefits whereas now they are not taxed.

President Obama, in his campaign against John McCain, made a big deal about how they should not be taxed.

That was then. "He knows what the math is," said "health care economist" Len Nichols of the centrist New America Foundation. (Centrist according to ABC's standards, anyway.) Nichols believes Obama could be persuaded because there isn't enough money available.

Baucus wants to finance health-care reform by making the U.S. system more efficient, reducing waste, and focusing on prevention. But those savings are not expected to cover the full cost of covering the nation's estimated 50 million uninsured.

That's why Baucus told ABC News that "if we need to look at other revenue options, we will." "Everything is on the table, including the tax treatment of health care plans," said Baucus. Limiting the tax exclusion for health benefits would be a ready source of revenue. The current exclusion costs the federal government $150 billion per year in revenue and more than $200 billion per year if payroll taxes are included in the calculation.

The current tax-free treatment of health benefits has also been blamed by Jason Furman, another Obama adviser, for making the health care system both "unfair and inefficient."

Beware when government experts start wailing about "unfairness" and "inefficiency." You are about to get fleeced. There is an underlying assumption among all of them that the money you earn, paid by your employer, somehow originated with the federal government and belongs to the federal government.

Don't you realize that you have the moral obligation to pay for your neighbors' health care out of your wages?

Once again, we have to point out, if this happens, then we have to sing along with Simon:

"I've squandered my resistance, on a pocketful of mumbles,

"Such are promises: All lies and jest.

"Still a man hears what he wants to hear and disregards the rest."