Comments on: The Value of McCain’s Health Care Tax Credit = One Designer Jacket http://wonkroom.thinkprogress.org/2008/09/17/health-jacket/ Thu, 26 Nov 2009 16:42:01 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: naugiedoggie http://wonkroom.thinkprogress.org/2008/09/17/health-jacket/comment-page-1/#comment-2332 naugiedoggie Wed, 17 Sep 2008 21:56:02 +0000 http://thinkprogress.org/wonkroom/2008/09/17/health-jacket/#comment-2332 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 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

]]> By: stateofthedivision http://wonkroom.thinkprogress.org/2008/09/17/health-jacket/comment-page-1/#comment-2324 stateofthedivision Wed, 17 Sep 2008 19:55:05 +0000 http://thinkprogress.org/wonkroom/2008/09/17/health-jacket/#comment-2324 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. 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.

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