First, Von argues that small businesses will be hurt by the employer penalty – basically the fee companies must pay if they don’t provide coverage. If your payroll is $400,000, you have to pay 8%. Von says this will snag too many small businesses.
My response – he could be right! The bill does include some small business tax credits, and many of these employers already provide coverage. But still, it’s a legitimate concern. And I have a couple of responses.
First, everything goes back to the fundamental question of whether you really want health coverage reform. That’s the million dollar question. If you do, then this type of dispute is precisely what negotiations are for. Maybe you bump up the exemption – maybe you add a different revenue source. The point is that these aren’t insurmountable difficulties, assuming you truly want to achieve reform. If you don't, cost is just a smokescreen.
Second, Von’s critique relates back to the larger tax policy questions we’ve been discussing. Our country needs revenues. At some point, those revenues are going to have to come from a sympathetic party. The mere fact that certain small businesses will pay more isn’t necessarily evidence that it’s a bad bill. After all, if we’re going to shut off every other revenue source, then something’s gotta give. I’d prefer higher income rates at the wealthier end, but that’s just me.
Moving on to Mark’s post… There’s a lot to chew on, but Mark (like Von) sharply criticizes maintaining the employer-based health care system. He prefers Wyden’s approach, which takes steps toward ending this system. My response – me too!
Here’s the problem though – we’re not acting on a blank slate. Choices made in the past have limited our political maneuvering space. Clinton’s plan was demagogued and defeated because it was seen as forcing people to abandon their existing coverage. Throwing people out of their current plans has been a favored political attack for years – one used, unfortunately, by both parties at various times. So we’re sort reaping we’ve sown on that front.
In addition, Mark seems to draw a sharp dichotomy between the “Wyden Plan” and the “public option.” He portrays these as competing alternatives, and is unhappy that liberals have embraced the latter.
Isn’t this a bit of a false dichotomy though? The real divide seems to be between keeping the employer-based system (current bills) or not keeping it (old Wyden bill). The public option isn’t really the fundamental divide. Heck, even if the public option is dropped, the contrast with Wyden would be just as sharp.
In addition, I don’t see the Wyden approach as fundamentally inconsistent with the public option. Wyden wants to end the tax exclusion and give that money to the individual employee (sort of like McCain, except that Wyden would drop people onto a regulated cushion rather than into an alligator pit).
But even under Wyden’s approach, there’s no reason employees couldn’t take their money and buy into the public option too, right? I mean, my understanding of his new bill – the Free Choice Act – is that it contemplates a world with a public option. Let me know, though, if I’m wrong about that.