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July 24, 2009
Obama laying the ground work for middle class tax hike
As both Democrats and Republicans on the Hill balk at the cost of Obamacare and threaten to derail the president's prize legislative agenda item because no one has been able to figure out how to pay for it, Obama is now hinting that the middle class may be in for a nasty surprise in the form of higher taxes in order to close the gap in spending.
Jennifer Rubin at Commentary noticed a subtle shift in the president's rhetoric at his press conference:
The president, in one of the more curious passages last night, said:Jonathan Cohn of The New Republic's health care blog The Treatment quotes Obama from his WaPo interview as opening the door to taxing health care benefits:
I don't want that final one-third of the cost of health care to be completely shouldered on the backs of middle-class families who are already struggling in a difficult economy. And so if I see a proposal that is primarily funded through taxing middle-class families, I'm going to be opposed to that.
Primarily? Mickey Kaus spotted that one, explaining:
In standard Washspeak, this means Obama is open to a health reform that taxes middle class families as long as it isn't "primarily" or "completely" funded by taxes on middle class families. But 49% funded by taxes on middle class families? . . . However you interpret these sentences, it's hard to see how Obama hasn't given a flashing green light to non-trivial tax increases on middle class families.[...]
So what happened to the cross-his-heart, absolutely won't raise taxes on people making less than $250,000 (other than the cigarette and energy taxes he has favored long ago)? Yes, Robert Gibbs has been hedging for some time on whether that was a "pledge" or a "promise" and whether the president is doing a 180 on it. But this is the clearest signal yet that he's coming after non-rich voters to pay for expanded access for the uninsured - and for the rationing of their own health care.
More important, though, Obama is giving his blessing to two variations on the exclusion cap. In one, a cap kicks in gradually, so that it exerts some downward pressure on medical costs over tie. In another, it's the insurance companies that are taxed. As far as I know, neither of these generates a huge amount of revenue, so it's not tremendously helpful when it comes to raising revenue. But the first and quite possibly the second do bend the cost curve over the long run. Or, at least, the Congressional Budget Office believes they do. Excluding health insurance from tax breaks has long been advocated by proponents of nationalized health insurance as a way to force people on the government plan. It will make private insurance more expensive - same result if Obama taxes the insurance companies who will simply pass on the costs to consumers.
The White House is getting desperate enough to risk the wrath of their base supporters in trying to get this monstrosity passed. Good luck with that, guys.
Hat Tip: Ed Lasky