“Sugar, rum and tobacco are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.”  — Adam Smith, The Wealth of Nations, 1776

Well, we can assume that since the father of capitalism, Adam Smith, made this comment, we know where Congress is going to look first in an attempt to pay for its utopian vision of health care.  Interestingly, they seem ready to leave tobacco users and those who consume diet drinks alone (there is lots of evidence that diet drinks do a good deal of harm as well).  In the end, Congress is scrambling for schemes to pay for their dream plan, when in fact, the solutions to Real Health Reform, are relatively easy – compared to the grandious plans they envision – and frankly not that expensive.

The one constant in all of this is that that Congress does NOT intend to give up any of its perks, ‘Cadillac health plans’ or other benefits.  They only expect the citizenry who pay the taxes to do so.  Dear members of the House and Senate, read our lips, no way!  You either live and die by the same rules or leave the market alone to do what it has always done, exceed expectations.

Our health care problem is one of insurance and access, which can in large measure be resolved by many of the ideas we have articulated under ‘the plan’ here on this site.

Actions like preventing health insurers from dropping subscribers who become ill or use services; actions like preventing health insurers from denying access to any coverage due to a preexisting condition; actions like preventing health insurers from selling loophole policies, which cover patients, except for the organ system they have had surgery or treatment for in the past (selective exclusion policies); actions like cherry picking work groups to insure, excluding others, or rating some to a level where premiums become prohibitive; actions like addressing real tort reform so that physicians can be freed from the practice of defensive medicine which significantly drives up costs; actions like demanding personal accountability in the obtaining of health coverage and removing this hidden, burdensome tax from the backs of businesses, when in fact it should be a personal responsibility.

Certainly, I could go on, but for now that is sufficient.  If Congress has its way, we will be taxed beyond recognition to pay for every possible dream project that is in fashion.  If history serves me correctly, it was a mere tax on tea that furnished the catalyst for an unprecedented revolution in the 1770’s.  Congress, get your act together, Real Health Reform is possible, but many of your visions are distorted and your zeal for taxes out of control . . . obi jo

Senate Finance Committee mulls taxing alcohol, sugary drinks to pay for healthcare reform
Different options are being considered to increase federal revenues to pay for expanded healthcare coverage. The Senate Finance Committee acknowledged the dilemma Monday as it released 40 pages of revenue raising options. They include cuts to providers and new taxes. Senators are considering such options as a “soda pop tax” on sugary drinks, increased taxes on alcoholic drinks, and removing the exemption on taxing health insurance. Congress is forging ahead on healthcare, with no consensus in sight on how to pay. Few of Obama’s proposed tax increases have been well received on Capitol Hill, and there aren’t many popular ideas coming from lawmakers.

The Finance Committee’s document laying out healthcare alternatives, contains comments from Chairman Max Baucus, (D-Montana) and Senator Charles Grassley (R-Iowa), the panel’s top Republican, saying that taxing health benefits would address so-called ‘Cadillac plans’ they said promote overuse of healthcare services and boost the cost of care. The two senators also proposed scouring Medicare and other aspects of the US healthcare system for cost savings. The increased revenues required to pay for Democrats’ broad legislation likely to require employers to provide health insurance to workers or pay a penalty, and to create a so-called ‘public option’ insurance plan, similar to Medicare, for some of the 46 million Americans who lack coverage.

Far from being a finished legislative proposal, the broad range of proposals included underscores the contentious task that remains of narrowing down the list of possible pay-fors. The notion of increasing the tax on alcoholic beverages prompted a strong reaction from the Distilled Spirits Council, which represents liquor producers and marketers. The council’s vice president, Mark Gorman, suggested the proposal could cost thousands of jobs in the hospitality industry and ‘would be a prescription for economic disaster.” There has been little support in the Senate for President Obama’s proposals to fund healthcare reform by limiting itemized deductions for taxpayers in the top two income brackets. He also would put revenue from estate tax changes, and tax changes affecting life insurers and securities dealers, toward the healthcare effort. Those proposals are tacked on, without discussion, to the end of the Senate options paper, in deference to the President.

Under the evolving plan, smokers and diet-soda drinkers would escape higher taxes, but wealthy individuals or workers with expensive health plans may have to pay taxes on their employer-provided insurance for the first time. Health savings accounts and flexible spending accounts could also lose some of their tax benefits. These options were among dozens of recommendations put forth by the committee ahead of a private meeting Wednesday where senators will discuss how to fund a healthcare fix that could exceed $1 trillion over 10 years.

A variety of tax reforms proposed in the document that will give opponents of Democratic healthcare reform plenty of fodder. Raising revenue by eliminating or reducing the favored tax status of healthcare expenses might prove irresistible to Congress, which values the revenue ‘lost’ to current policy at $194.2 billion a year. One of the key tax proposals, limiting the current tax-free treatment of workplace health benefits, also conflicts with the campaign position of President Obama, who lambasted Sen. John McCain (R-AZ) for advocating changes to the tax code in this area.

Aside from some ideas that have been bandied about already, such as taxing employee health benefits and sugary drinks, some proposals that caught our eye include changes to the rules around health savings accounts and flexible spending accounts and increased taxation of non-profit Blue Cross Blue Shield companies and non-profit hospitals.

Senate Finance Committee mulls taxing alcohol, sugary drinks to pay for healthcare reform – http://caloriecount.about.com/senate-finance-committee-mulls-taxing-alcohol-ft139359

Senate Committee Explores New Payment Rates, Taxes to Fund Reform – http://www.healthleadersmedia.com/enewsletter/web-version/HealthLeadersMediaDaily_19_May2009.html

Beer tax on tap for health care? – http://finance.yahoo.com/news/Beer-tax-on-tap-for-health-apf-15311771.html?x=1

Senate Mulls ‘Lifestyle Tax’ on Soft Drinks to Pay for Healthcare Reform – http://www.healthleadersmedia.com/content/233282/topic/WS_HLM2_FIN/Senate-Mulls-Lifestyle-Tax-on-Soft-Drinks-to-Pay-for-Healthcare-Reform.html

Sodas a Tempting Tax Target – http://www.freerepublic.com/focus/f-news/2254911/posts