Wonk Room » The Value of McCain’s Health Care Tax Credit = One Designer Jacket

The Value of McCain’s Health Care Tax Credit = One Designer Jacket

By Guest Blogger on Sep 17th, 2008 at 3:30 pm

The Value of McCain’s Health Care Tax Credit = One Designer Jacket

Our guest blogger is Adam Jentleson, the Communications and Outreach Director for the Hyde Park Project at the Center for American Progress Action Fund.

The centerpiece of John McCain’s health care plan is a tax credit worth $2,500 for individuals. By coincidence, in her speech at the RNC two weeks ago, Gov. Sarah Palin wore a jacket designed by Valentino Garavani that cost $2,500.

Admittedly, McCain’s health care tax credit is worth more than most jackets. The problem is that it’s worth far less than the cost of health care for most Americans.

Individuals paid an average of $4,400 for health care in 2007 – nearly twice the value of McCain’s credit. For families, McCain’s credit is $5,000 – which covers less than half of the $12,000 the average American family paid for health care in 2007.

And unlike Gov. Palin’s jacket, McCain’s credits are not tailored. They are one-size-fits-all. So if you’re healthy, you should be in good shape. But if you are sick, have a pre-existing condition, or endure a medical emergency, once you exceed the value of the credit you are on your own.

Which is why many health care experts agree than McCain’s health care plan boils down to this: don’t get sick.

Comments
2

2 Responses to “The Value of McCain’s Health Care Tax Credit = One Designer Jacket”

stateofthedivision Says:

Our leaders now behave like monarchs in third world countries. “We have ours, let the little people suffer.”

For the federal government to mobilize over $310 billion in a few short weeks to save the health of four firms, is an affront to the millions of uninsureds, waiting eight years for relief.
September 17th, 2008 at 3:55 pm
naugiedoggie Says:

I think the expression “tax credit” used repeatedly in stories about McBush’s healthcare “plan” is misleading. A “tax credit” is a straight reduction of your liability. So if you owe $14,500 in taxes, a tax credit reduces your liability to $12,000. However, a “healthcare deduction” means that when you are computing your liability, you put down $2,500 as the McBush healthcare deduction … after you have added the $4,000 in benefit payments into your income. In this scenario, your taxes will probably go up because the additional $1,500 in income will push you into the next tax bracket.

The reason I bring this up is that a strictly-speaking “tax credit” would break the budget — because there is no way that an increase in income of $4,000 is going to come out as an increase in liability of $2,500. The result would be a massive hemorrhage of funds from the Treasury. We couldn’t afford it and not even a Republican-controlled Congress would approve it.

So, I’m pretty sure that what is envisioned (and discussed) is not a tax credit, but a healthcare deduction.

Thanks.

mp
September 17th, 2008 at 5:56 pm