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John McCain's REAL Healthcare Reform

John McCain was not the strongest candidate around. But he is better than Obama on healthcare, the LATTER's signature issue.

McCain proposed to tax employer health care (over employee contributions), while allowing a tax DEDUCTION for individual health care payments.

The first thing is, if you want more healthcare, or anything else for that matter, provide a tax deduction for it. People are more inclined to do things with "government" money, than they would even if their own. This is one way the government can direct funds flows in beneficial ways.

The other part of the proposal would deal with the fact that workers for certain "favored" (usually large) employers had MUCH better health care provisions. Taxing these benefits would do a lot to level the playing field.

The problem started in World War II during wage and price controls. Employers couldn't use salaries to attract desired employees, so they started providing "fringe benefits" such as health care (and pensions). This was a frivolous terminology that failed to state the program's true cost as a form of additional compensation.

In its ORIGINAL context, it didn't do much harm. That's because people in those days wouldn't see a doctor unless they were SERIOUSLY ill, meaning that such visits were actually a form of "maintenance" investment. People wouldn't see doctors for small or imagined complaints such as "aches and pains."  Never mind frivolous items like cosmetic surgery, or other "dating" treatments like birth control (which barely existed) or abortions (then totally illegal).


All that has changed today. Which is why company benefits need to be taxed. They've gotten so large, that in some cases they approximate base compensation. At General Motors, for instance, workers made an average of about $70,000 a year in salary, but the health and pension benefits amounted to ANOTHER $70,000 a year. The company could afford one or the other, but not both.

How's that for an (untaxed) bonus?