More On Baucus Care's Excise Tax And Wages
The two major advantages of relying on [the Baucus Care excise tax] method of financing health care are that (1) it “bends the curve” by encouraging people to take more of their earnings in the form of money [. . .] rather than health care services, and (2) it lets you stay deficit-neutral over the long-haul. What the House has done, by contrast, is deficit-neutral inside the three-year window but not longer than that. The big problem with Finance’s excise tax, I would say, is that it doesn’t actually raise enough money.
(Emphasis supplied.) Ezra and Yglesias live in some mythical world of a perfect competition model for labor where workers get to pick and choose how their compensation packages are formulated. It does not exist. Yglesias also contradictorily argues that the Baucus Care excise tax is "deficit neutral" but does not "raise enough money." The two statements are irreconcilable. And then Yglesias goes for the obvious solution - adopt the House approach of a surtax on the wealthy.
I say let's just cut through the nonsense and tax the wealthy - if it makes some feel better that a part of the tax comes in the form of an excise tax on health care benefits - limit it to incomes over $200,000. Mind you, I believe all the "bending the cost curve" stuff is sheer nonsense. But as long as the wealthy pay the bill, it's ok with me.
Speaking for me only
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