President Obama repeatedly promised during the campaign and after his election, that he would not raise taxes on people with income under $250 K. But the Baucus bill would impose an excise tax on “Cadillac” insurance policies as a way of subsidizing insurance for other people. The cost of this tax will be passed on in premiums, and hence, will mainly impact union members, who have some of the most comprehensive insurance policies in the nation. From the analysis by Bloomberg columnist Kevin Hassett:
For all the rhetoric, the plan is quite easy to sketch, thanks in part to an analysis by the congressional Joint Committee on Taxation...The report projected that the excise tax would raise about $52 billion in 2019. Of that, about $8.9 billion would come from taxpayers with incomes of less than $50,000; about $19.4 billion from taxpayers with incomes between $50,000 and $100,000; and about $17.4 billion from taxpayers with incomes between $100,000 and $200,000. Add those up, and you see that about 87 percent of the revenue in the original Baucus proposal to finance Obamacare would come from individuals with incomes of less than $200,000.
Baucus and the Senate committee have since upped the proposed tax to 40 percent, and the trigger thresholds to $9,850 and $26,000, tweaks that shouldn’t change the basic thrust of the story. The Democrats’ plan is a moving target — and given who will pay the tab, that is probably on purpose. The remarkable thing is that this revenue comes from low- and middle-income people who already have insurance. Many members of organized labor have these “gold-plated” plans. And they would be worse off, not better, because of Obamacare.
So, if Baucuscare becomes part of Obamacare, many in the middle class will either face an effective tax increase or have their health benefits cut—violating another Obama promise that people can keep their current plans. (This is one way in which people will be pushed into the public option, intended to lead to a single payer plan, as Congressman Barney Frank admitted.)
One way or the other, if the president signs Obamacare, whether the House, Senate, or a conglomerate version, he will be breaking explicit promises. That won’t stop him from applying the ink on the dotted line, of course. He’s a politician. That’s what they do.
