“We don’t want to discourage it. We just want to tax it.”

Posted by Marc Hodak on June 14, 2009 under Economics, Politics | Be the First to Comment

Compare this item of health care reform being proposed by the Administration:

“The president does not want to dismantle privately owned plans. He doesn’t want the 180 million people who have employer coverage to lose that coverage. He wants to strengthen the marketplace,” Sebelius added.

with this:

President Obama, in a pivot from some of his harshest campaign rhetoric, told Democratic senators yesterday that he is willing to consider taxing employer-sponsored health benefits to help pay for a broad expansion of coverage.

Versus this more recent pronouncement of Obama’s second:

Vice President Joe Biden opposed proposals being discussed by some lawmakers to tax health insurance benefits provided to people by employers as a way to pay for an overhaul of the $2.5 trillion U.S. healthcare industry.

Which indicates that Obama is waffling either on his committment to not tax these benefits, or to consider taxing them, or that Biden hasn’t gotten the most recent memo.  History shows that all three are possible, even at once, in terms of political positions.  As economic propositions, though, the government will have to make a trade-off:  reduce private health care by taxing it, or paying for public health care by raising the money elsewhere.  Reality, unlike politics, won’t allow you to have it both ways, let alone all three.