If you currently get health care coverage from your employer, you should know that John McCain plans to tax those benefits.
Currently, the value of your health care benefits is not included as income for income tax purposes. That will change under John McCain’s plan. In exchange, the McCain plan would give Americans tax credits to pay for health benefits. The issue is whether the credits would cover the value of health benefits. McCain has proposed credits of up to $5,000 per year for families, but the average American family would need roughly $12,000 per year to get coverage.
This will probably affect union workers and public employees the most. They typically have more generous health care plans, and thus would likely get hit with higher taxes, even after the credit.
Though Senator John McCain has promised to not raise taxes, his campaign acknowledged Wednesday that the health plan he outlined this week would have the effect of increasing tax payments for some workers, primarily those with high incomes and expensive health plans.
The campaign cannot yet project how many taxpayers might see their taxes go up, said Douglas Holtz-Eakin, Mr. McCain’s top domestic policy adviser. But Mr. Holtz-Eakin said in an interview that for some, Mr. McCain’s health care tax credits would not be large enough to compensate for his proposal to eliminate the tax breaks afforded to workers with employer-provided health benefits.
Over time, the likely effect here would be to reduce the number of employers who offer health benefits. Also, McCain makes no provision for Americans who have pre-existing conditions. It’s hard to imagine how such a program would work.
