John McCain’s proposed tax hike

Jason Furman and Austan Goolsbee write:

As even Sen. McCain’s advisers have acknowledged, his health-care plan
would impose a $3.6 trillion tax increase over 10 years on workers.
Sen. McCain’s plan will count the health care you get from your
employer as if it were taxable cash income. Even after accounting for
Sen. McCain’s proposed health-care tax credits, this plan would
eventually leave tens of millions of middle-class families paying
higher taxes. In addition, as the Congressional Budget Office has
shown, this kind of plan would push people into higher tax brackets and
increase the taxes people pay as their compensation rises, raising
marginal tax rates by even more than if we let the entire Bush tax-cut
plan expire tomorrow.

The piece is interesting throughout, for instance:

Overall, Sen. Obama’s middle-class tax cuts are larger than his partial
rollbacks for families earning over $250,000, making the proposal as a
whole a net tax cut and reducing revenues to less than 18.2% of GDP —
the level of taxes that prevailed under President Reagan.

I would look more closely at the implied structure of fiscal commitments over time and what each candidate is likely to actually do (as opposed to promise) when it comes to Medicare and other health care issues.


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