White House open to new tax on health benefits

Published: Sunday, June 28, 2009 9:23 p.m. MDT
 |  E-MAIL | PRINT | FONT + - 

WASHINGTON — The White House left open the possibility Sunday that President Barack Obama might pay for his health-care overhaul by taxing employer-provided health insurance even though he had campaigned on not raising taxes on middle-class families.

White House adviser David Axelrod said the administration wouldn't rule out taxing some employees' benefits to fund a health-care agenda that has yet to take final form. The move would be a compromise with fellow Democrats, who are pushing the proposal as a way to pay for the massive undertaking without ballooning the federal deficit.

"There are a number of formulations and we'll wait and see. The important thing at this point is to keep the process moving, to keep people at the table, to the keep the discussions going," Axelrod said. "We've gotten a long way down the road, and we want to finish that journey."

But if Obama compromises on that point, it would reverse his promise not to raise taxes on those earning less than $250,000.

"I pledge that under my plan, no one making less than $250,000 a year will see any type of tax increase," Obama told a crowd in Dover, N.H., last year. "Not income tax, not capital gains taxes, not any kind of tax."

Story continues below

At the time, his Republican rival, Sen. John McCain, R-Ariz., was proposing a tax on health benefits similar to the plan Obama is now considering. Just a year ago, Obama spent millions on campaign commercials attacking the idea.

One ad accused McCain of favoring "taxing health benefits for the first time ever ... taxing health care instead of fixing it. We can't afford John McCain."

A second Obama ad called McCain's approach "the largest middle-class tax increase in history." Driving the point home, it contended the "McCain tax could cost your family thousands. Can you afford it?"

Under the current proposals, a tax on health benefits would affect only those with pricey health plans. The idea would be to tax as income the portion of health benefits worth more than a specified limit. Officials are considering several options, including one that would set the limit at $17,240 for family coverage and $6,800 for individuals.

Plans worth more than that would be taxed; those worth less would see no increase.

Obama has faced similar criticism before. When he increased taxes on tobacco to pay for a children's health bill, his critics said he was raising taxes on those making less than $250,000 a year.

Recent comments

I just lost my job. Now I have no health insurance. And soon I'll...

I need help | June 29, 2009 at 11:36 a.m.

And we are suprised?

Cosmo | June 29, 2009 at 11:21 a.m.

It looks like they will try everything possible to wreck our economy.

JS | June 28, 2009 at 9:54 p.m.

previousnext

Latest comments

I Call BS. The line "We have decades of history of women trying to engineer...

By the two rooks playing well the past few games, will not impact Sloan one...

President Obama believes that criticism makes him a better leader??? Wow...

1A and 2A sports is awesome! You have to be raised and have roots in these...

are kidding, trap game, I pitty the Aztecs however I fear them more than I do...

To "nobel | 3:51 p.m." wow, what a rant. This country is being destroyed by...

Editorial: Red flags at Fort Hood

Greetings: Jesus Christ taught that "by their fruits, ye shall know them."...

Both Utah and BYU will be 9-2 entering the 11/28 game. BYU rarely struggles...

TCu is great, Utah and BYU are good!! Both got worked by the frogs. NO...

UNLV coach fired after 5 seasons

It's sad that your grasping at such weak points to defend your program Down...

Advertisements
Advertisement