Influence

Me, several weeks ago:

Given these facts, shouldn’t McCain argue that his healthcare plan kills two birds with one stone? If encouraging people to purchase health insurance on the open market drives down costs, it should also allow employers to use the money they would otherwise be spending on employee health insurance to increase wages.

Ross Douthat, today (emphasis mine):

This is an argument you hear frequently from liberals: That McCain’s plan will tax employer provided health insurance, which is worth roughly $12,000 for a typical family, which in turn will lead many employers to stop offering said health insurance; meanwhile, the plan will give the same family a tax credit worth only $5,000 to pay for the same plan they used to have through their employer. This makes the whole thing sound like a pretty rotten deal, but it also begs a pretty big question: What happened to that extra $7,000 that employers were spending on health care under the old dispensation? To hear Biden tell it, it’ll just vanish into thin air. But that’s just absurd. Right now, that $12,000 plan is part of your compensation; it’s just that the current tax code incentivizes employers to pay you in health insurance rather than in cash, because the health insurance is tax free. But that doesn’t mean that if health insurance stops being tax free and employers stop including it in your package of salary and benefits, they’ll suddenly cut everyone’s compensation by $12,000; they’ll cut it by the cost of the tax deduction, presumably, and wages will rise to roughly where they would have been if employers had never been incentivized to pay their workers in health care. So the typical family will get their $5,000 credit from the government, and something like the remaining $7,000 they need to buy health insurance will show up in their paycheck.

Douthat should be ashamed of stealing my ideas without attribution. Clearly, no thought whatsoever went into his extremely long post on private sector health insurance. These pundits – they just coast on reputation after awhile . . .

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