Michael Cannon provides a helpful corrective on the caricature conveyed by Senator Biden at the VP debate last week. Excerpt:
He [Biden] suggested the $5,000 family tax credit is paltry compared to the $12,000 average premium for a family plan, as if the two numbers were comparable, and complained that the $5,000 “will go straight to the insurance company,” calling that “the ultimate Bridge to Nowhere.”
Yes, the tax credit would go to the insurance company of your choice, where it would reduce the cost of your coverage by $5,000 – which, we apparently must repeat, is larger than the tax break most people get today. The Post awarded Biden another two “Pinocchios” for Thursday night’s misrepresentations.
But the most important part of McCain’s tax credit is something that Biden still doesn’t get: McCain would replace the current tax break with not one tax cut, but two.
The average “employer contribution” to that $12,000 family plan is about $9,000. In a recent survey, 91% of health economists agreed employers take their “contribution” out of your wages. If employers weren’t providing health benefits, the labor market would force them to add that money to your cash compensation. In other words, the current tax break for job-based coverage lets employers control several thousand dollars of your earning.
Read the whole thing.