Conservatives see the President's new Health Care plan as a tax increase, and are against tax increases on principle.
Democrats are against it as well, but the reasons they are against it are not so obvious.
The Plan, if approved as proposed in the State of the Union Address, would add the health care costs paid by your employer to your annual income total.
Everyone would get a tax deduction of up to $15,000 per year for purchasing an insurance plan.
Everyone whose health care insurance costs in excess of $15,000 would pay taxes on the extra income.
Someone who purchases insurance on their own that is in excess of $15,000 would have to pay the difference.
So you'd think that Democrats would like the plan. But they don't for a number of reasons:
First: Unions don't like it. Unions have, in general, been able to negotiate Cadillac health care plans for their members.
Workers in established manufacturing industries, such as the auto and steel industry, tend to have generous health insurance benefits, so they could see their taxes go up if they stick with their current policy. So could many government workers.
All union workers. And unions include Teachers unions. I don't know about your area, but here in Vermont teachers have managed to negotiate health care plans that are better than the vast majority of the people who pay their salaries. I work for a pretty large employer who offers health care as part of the standard benefit package, but I still have co-pays and other out-of-pocket costs. The teachers in my little burgh, however, have no co-pays. The will likely have to pay taxes on their health care plan.
Union workers, I need not add, are huge contributors to the Democratic party.
Second: The bottom line is that Bush is not proposing a government run, single-payer socialistic type health care plan. By accepting Bush's plan, which is essentially a free-market plan, it will be harder to move in the Socialist direction: This plan takes a wrong turn for most Democrats.
"I am absolutely determined that by the end of the first term of the next president, we should have universal health care in this country," the Illinois senator [Barak Obama] said....
Even after leading that calamitous attempt in 1993, Clinton remains in favor of universal health care and has made it a central theme of her presidential bid.
"One of the goals that I will be presenting ... is health insurance for every child and universal health care for every American," she said at a community health clinic in New York Sunday, the day after entering the 2008 Democratic field. "That's a very major part of my campaign and I want to hear people's ideas about how we can achieve that goal."
On Thursday, she criticized Bush's proposal to make health care more affordable through tax breaks, arguing that it would lead to less funding for hospitals.
Senator CLinton did not elaborate on that last point.
Many Democrats argue that implementation of this plan will encourage companies to drop health care coverage as a benefit.
Some worry that the idea Bush introduced this week in his State of the Union Address -- to shift the health insurance tax deduction from employers to workers -- would remove one of the main incentives companies have for paying for worker health care. (Company-paid health insurance took off in the 1940s as a tax-deductible end run around World War II wage controls.)
But this is precisely the argument people who favor government run, single-payer health care make when they argue for a Socialist health care system.
As it is right now, American businesses are at an economic disadvantage, because their health costs are so much higher than in other countries. The Canadian branches of Ford, GM, and Daimler-Chrysler all publicly support Canada's health care system, because it saves them an enormous amount of money, compared to their counterparts in the US.
Clearly this is a red herring argument. If this is a benefit for single-payer health care systems, then it is also a benefit for Bush's plan as well. The difference of course is that Bush's plan takes advantage of, and supports, the free market while the single-payer solution eliminates the free market.
Bush’s plan would support independent, privatized health care. This would keep health insurance and jobs separate.
“People change jobs seven or eight times in this country before they turn 35,” Bush said. “So you better have a moveable health plan.”
Of course one could argue that this isn't really a benefit of the single-payer system because while a corporation would indeed spend less on health benefits, they would likely pay more taxes. Under Bush's plan, they really would be eliminating a cost without incurring a new one.
Some have said Bush's health plan could make it easier for employers to drop coverage. But employers added health insurance in the first place because it helps attract workers. So they're unlikely to drop it unless employees have a better option than the current market for individual health insurance, said Frank McArdle, a health care expert at human resources consultant Hewitt Associates.
"As long as that piece is missing, no matter what the tax incentives are, we don't see large companies walking away from their health insurance because they're not going to turn their employees loose on the individual market," he said.
I'm in favor of Bush's plan, myself. I'm not one is against tax increases on principle: Clearly the government needs to collect taxes to fund some services for the common good. We can argue about what those are, but we will always pay some form of taxes.
And to me it seems clear that medical benefits is the equivalent of income so it doesn't seem unfair to me that it should be counted as income for tax purposes.
Besides, one way or another we are going to deal with the health care issue at the Federal level. Too many people want something done. And we are going to have to pay something for it one way or another. I would rather see a free-market solution rather than a government solution.
The Left and the Right oppose Bush's solution. And from my way of thinking, they are both opposed to it on principle. The Right because they see it as a tax increase and wealth redistribution, while the Left is against it because it violates the principle of Socialism upon which their principled opposition is based.
As for me, it just seems like a good idea. And I like good ideas in principle.
