In the current health care debate, opponents of the Baucus plan are saying that the Senator’s intention to tax Cadillac-insurance plans will end up hurting middle-income people due to the effect of inflation on insurance premium. To blunt the tax effect, Senator Baucus is expected to amend the existing bill so as to provide more subsidies to middle-income people.
Instead of doing it this way, why not increase the taxable level by the average inflation rate annually? This will ensure that the insurance premium of most middle-income people will always be below the taxable level. Administratively, this will be easier to manage as well. And for those who say that this is radical, I don’t think so because this is not the first time that governments, in particular US government, has worked with inflation issue. In fact, many governments are already issuing bonds that take into account inflation.
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Sounds good to me, that way the burden is shared based on income earned.
ReplyDeleteSome points to consider: http://www.newsy.com/videos/cadillac_tax_raises_some_eyebrows
@anonymous: Thanks for the link. It certainly provides different, interesting viewpoints.
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