Obama Must Tax Employer Health Insurance

During the campaign, Barack Obama was scathing about John McCain’s plan to tax employer-provided health benefits. But Obama’s going to have to bite the bullet and tax them himself if he wants to pay for his own health care initiative, writes Robert Reich in Salon. Now that Congress has killed Obama’s original plan to raise funds by cutting tax deductions for the rich, it’s the only way to generate enough revenue.

Tax-free, employer-provided insurance basically is the current government-backed health-care system. “But, face it, it’s become a crazy system,” Reich argues. Essentially, the government will only help you if you’re employed, and it’ll completely subsidize even the most gold-plated executive health package. Obama could pay for universal health care just by taxing health care for employees making, say, more than $100,000. That seems sane, and politically feasible. (More health insurance stories.)