Your Tax Dollars at Work

The Affordable Care Act continues to be a hot topic and is likely to be a central focus of debate in next year's general campaigns. The Obama administration has not done a good job of promoting the benefits of the legislation and there is a lot to be said that has not been said. Of course, many of the provisions will not take effect until 2014, two years after the elections. The Republican candidates have almost universally promised to repeal the act although that will not be quite as simple as signing a piece of paper.

During the debate over the bill I, along with many others, strongly promoted a single payer bill but, at the very least, a public option. It contains neither in a nod to the power of the insurance lobby's desire to increase profits at very little risk.

Now we are engaged in negotiations between the two major political parties over ways to reign in the federal budget deficit and to pay down the national debt. The last deal that extended the federal government’s power to borrow included the formation of a super-committee charged with coming up with $1.2 trillion in deficit reduction over the next 10 years which is still a drop in the bucket. There is an attempt to strike a grand bargain similar to the one that President Obama and Speaker Boehner almost had a few months ago. It would consist of about $2.2 trillion in cuts and $1.4 trillion in new revenue. The budget cuts have been pretty much identified but the GOP steadfastly refuses to participate in any talk of new revenue even though just about everyone who is an authority on the subject says the deal will not be enough without some attention to revenue.

The new revenue is proposed to consist of both an increase in taxes on revenues over a certain amount and elimination of tax loopholes known as tax expenditures. These include such things as the home mortgage deduction and the deduction that companies use to cover employee health care plans. The latter is the one I want to talk about.

Companies that furnish health care to employees are allowed to deduct that amount from their tax liability. People who enjoy the benefits of this tax expenditure probably don't know this and believe that their employer just pays for it out of pocket. Not so. As a tax expenditure the cost is borne by each and every taxpayer in the form of higher taxes. It is simple. In order to make up for the revenue lost by allowing this deduction to companies the taxpayer is required to pony up the difference.

The opponents of the Affordable Care Act were fond of quoting the statistic that some 83% of people were satisfied with their health care which conveniently ignored the fact that bout 47 million people lacked coverage and access to adequate health care. My opinion is that this is a statistic driven primarily by self interest and a lack of understanding of how their health care is financed. As testimony I offer the now famous television clip of some Tea Party activist telling a government official to keep his government hands off his Medicare.

No matter what you think, you do not pay enough into Medicare to pay for the benefits you will receive and companies do not fund your health care package out of their pockets. It is the American taxpayer that pays for both. Now, the question here is: how do you feel about being taxed to pay for other people's health care? If your employer covered the cost the company would have to accept lower profits and that is just not going to happen. The alternative is to pass the costs on to you which is what the Lexington/Fayette County Urban County Government attempted to do. That was met with such a hue and cry that the City Council overruled the Mayor and ponied up additional millions of tax dollars to cover the increased costs.

So, I have to ask. If your (and my) taxpayer dollars are being used to finance other people's employee furnished health care benefits with the companies pocketing the benefit then what is the difference in using taxpayer dollars to benefit all citizens instead of the number that are fortunate enough to enjoy such a benefit? And how do you feel about your tax dollars being used to fund someone else's employer furnished health care? And what is the logical argument to support such an action? My understanding is that many are ideologically driven to oppose any government interference in heath care but that is exactly what is happening now but with the insurance companies getting a cut of the pie and your tax dollars which increases costs?

So, how about writing to me and explain how using tax dollars to fund employer furnished health care is any different from using tax dollars to pay for health care?

That's my take. What's yours?