Joe Biden charged Thursday during a campaign stop in Pennsylvania that John McCain's tax proposals for health insurance would be "the largest tax increase in the history of America for the middle class." He was wrong.Be that as it may, either way you slice it, I get queasy seeing the word trillion tossed around.
McCain does propose taxing the health benefits that some 156 million people get through the workplace. That's a major change, because now no income taxes are levied on those benefits, but it's not the whole story.
So, as Biden explained, someone who makes $40,000 and gets $12,000 in health insurance benefits would end up paying income taxes on $52,000. But what Biden didn't say was that McCain also proposes to give the insured a new tax break in exchange — a $2,500 tax credit for individuals and a $5,000 tax credit for families.
For most families, that tax credit would for several years be more generous than the current tax break for employer-sponsored health insurance. An analysis of McCain's plan by the Tax Policy Center estimated that McCain's plan would increase the federal deficit by $1.3 trillion over 10 years, mainly because it would lead to less tax revenue coming in. The same group says Obama's plan would increase the deficit by $1.6 trillion over the same period.
"McCain's plan seems to be a significant tax cut, at least in the short term," said Len Burman, who oversaw the analysis for the center, a joint venture of two liberal-leaning think tanks, the Brookings Institution and the Urban Institute.
Since it's Friday night, why not some video of one of my favorite Biden gaffes this campaign season?