Rather than raise the tax burden on those who have coverage to subsidize an entitlement regime for those who do not, Congress should expand the federal income tax exemption to include every individual who chooses to purchase some form of health care. According to census data, fully 20 million uninsured Americans are employed full time, yet do not receive benefits through their job. It is reasonable to suspect that at least some of those individuals might choose to obtain health insurance were the tax incentives now offered exclusively through employer-provided coverage available to them as well.
Ironically, it was John McCain whose plan would have given such employees and their families that option. Through tax refunds, McCain sought to encourage all workers to purchase coverage even if their employer chose not to provide it. And, unlike what President Obama has proposed, McCain’s plan would actually have increased the total number of people covered without transferring more wealth or control to the federal government.
Unfortunately, there has been no indication from Sen. Baucus that a pending health care bill would extend the current employer tax breaks to individuals. Instead, he and other leading congressional Democrats seem to be heading the opposite direction, raising taxes to subsidize government control. But without individual incentives, as President Obama himself said in October, a tax hike will increase the cost of employer-provided insurance and could potentially force millions of people--as many as 118.5 million according to the Cato Institute--out of their current coverage altogether.
From there, as more and more patients are shuffled into a still-undefined government health bureaucracy, the spiraling tax rates necessary to finance its growing cost will wreak havoc throughout the economy. That cycle will continue driving up the number of Americans perpetually dependent on the federal government while driving down the quality and quantity of care they can receive.
Instead, by expanding the proven success of exemptions and reducing the tax burden on individuals, Congress could help increase the number of Americans covered while limiting the cost and intrusion of government. Or is that not what this is all about?
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