McCain secretly plans new tax on middle class

By Leo W. Gerard
United Steelworkers
International President

John McCain should not be traveling in a bus called the Straight Talk Express.
No, that equivocating multimillionaire who kowtows constantly to the wealthy should be riding in one of those private, gilded railroad cars.
That would be symbolically appropriate as well since he is trying to railroad the middle class on taxes.
He is actually proposing a brand new tax on the middle class.
This has gotten so little attention it is astounding. And frightening, frankly, as television reporters and commentators focus instead on inane incidents like the lipstick-on-pigs remark.
McCain intends to tax workers for the value of health insurance that they receive from their employers.
Really.
Although it’s not included in the description of his plan on his web site. It is, however, on the site of the Henry J. Kaiser Family Foundation, a non-profit organization that specializes in health policy.
I understand McCain neglecting to mention this new tax on the middle class. If I were proposing this shocking tax increase, one that will cost the average American worker an additional $110 a month in taxes out of the blue, I would conceal it as best I could too.

Taxing health insurance

So let me provide you with some clarity. This comes from the Kaiser Foundation evaluation of the McCain and Barack Obama health plans. It says McCain would “reform the tax code to eliminate the exclusion of the value of health insurance plans offered by employers from workers’ taxable income.”
The value of the typical plan provided by an employer to a family is $12,106, of which the employer pays $8,824, and the worker pays the remaining $3,282. The median household income is $44,389, which places most American families in the 15 percent income tax bracket.
McCain wants to add the employer’s cost — an additional $8,824 – to that middle class family’s income, then tax it. The hit to the average family is 15 percent of the McCain-added income — $1,323 more in income taxes.
This new tax would affect the 158 million Americans who are insured through their employer.
Right now you should be yelling, “What?” And demanding to know why you haven’t heard about this before. That is because the media keeps focusing on McCain’s proposed health care tax credits — $5,000 for families and $2,500 for individuals.
McCain certainly wants the attention to stay on those credits. It sounds so much better to be giving families tax credits than tax increases. But what needs to be stressed here is that the tax credits only go to families or individuals who go out on the market and buy insurance for themselves. Right now, only 14 million Americans obtain insurance that way.
So, under McCain’s plan, 14 million Americans could get these tax credits. And 158 million working people would have to pay an additional $1,323 in income taxes.

New tax

Still, somehow, no one mentions the new tax part of McCain’s plan!
Even the credits don’t sound so great after you hear the whole story.
John McCain wants to kill employer-provided health insurance. He wants every American to go out on his or her own and try to buy insurance. He says that on his site if you read between the doubletalk. He says, for example, “The key to health care reform is to restore control to the patients themselves.. . .Health care. . . should not be limited by where you work.”
Here’s the way the New York Times put it in an April 30 story, in which there was only straight talk: “Mr. McCain’s health care plan would shift the emphasis from insurance provided by employers to insurance bought by individuals.”
Since 2000, the percentage of employers offering health insurance has declined from 69 percent to 60 percent. Many more companies would dump their plans as soon as the federal government offered tax credits to individuals who bought their own. Corporations would disingenuously justify this abandonment the same way McCain does — by saying workers would get the advantage of carrying their individual plans from job to job as they move around the country.
They won’t mention the cost, however. To buy plans comparable to what workers now receive from employers, families are going to have to shell out a lot more money from their own pockets.
The math is simple. To buy the $12,106 plan with the $5,000 family tax credit, a worker is going to have to cough up an additional $3,824. (That is the $8,824 the employer previously paid toward the plan minus the $5,000 credit.)
That is, assuming, of course, that you can get coverage. Insurance companies are notorious for rejecting anyone with pre-existing conditions, including acne, being overweight and diabetes.

McCain wouldn’t qualify

John McCain himself would likely be unable to find an insurer on the private market since he’s had the most serious form of skin cancer, melanoma, more than once.
But he doesn’t have to worry because, as a U.S. senator, he’s covered by a government plan. And he’s certainly not proposing eliminating that!
McCain could resolve the exclusion problem by requiring insurance companies to accept people with pre-existing conditions. But he doesn’t. Instead, he suggests setting up a system in which states would become responsible making sure those people get insurance. He says he won’t shift the costs to the states, but what’s the chance of that? He’s establishing a pool of all of those rejected by insurance companies – thus those with the highest risk. And he’s telling the states to deal with the problem that creates.
Meanwhile, insurance companies would be left to profit big time by providing insurance for the young, the healthy and everyone who doesn’t have anything at all wrong with them. What a deal!
He claims this plan will increase competition and drive down prices – as if an individual worker, on his own, without any real knowledge of the system, has the negotiating power of a major corporation with full-time experts on its staff whose only function is to buy insurance for a pool of hundreds or thousands of workers.
While McCain is planning to increase your taxes if you’ve got insurance at work or to force you into the insurance market at a huge financial loss, he intends, at the same time, to cut taxes on corporations — you know, like those giant oil companies that just raked in the largest quarterly profits of any firm ever in the history of mankind. And he plans to permanently retain those income tax cuts his friend George W. Bush gave to the rich, because, of course, the wealthiest Americans, like McCain and Bush, need a break today.

Lying to American workers

In the meantime, McCain is traveling to states like Michigan, Ohio and Pennsylvania, hard hit by the economic devastation caused by eight years of Bush administration fiscal policy failures. At each stop, McCain is sucking up the middle class – as if his administration wouldn’t cost workers dearly.
He needs to stop lying to America’s workers.
In fact, maybe Mr. Straight-Talk-Express needs to slap on some lipstick. Because sometimes the truth is a bitch.

Source: United Steelworkers Website