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Sean Hannity Responds to a Jon Stewart Criticism | Main | Director of HHS: Hey, I've Got a Great Idea. Let's Offer Obamacare to Illegal Immigrant "Dreamers"
November 14, 2014

Oh Boy: In Jon Gruber's Newest (Sixth) Video, He Explains How Obama and Democrats Conspired to Get Rid of Tax Exemptions for All Insurance Plans Without Anyone Noticing

The guy who's been finding these said that the worst was yet to come. I've had my eyes out.

This may be it.

Just to set the table here: It is widely, almost universally, acknowledged that not taxing insurance policies is a bad idea that leads to distortions and inefficiencies (and incidentally is a case of the government picking "winners and losers," and dictating what form employee payments should take).

So as a general matter, I think we'd probably like to get rid of the tax exempt status for health care benefits.

Note that McCain proposed doing just that in the 2008 election. His idea was that we would get rid of this exemption and instead give people an additional tax credit valued at the average cost of health insurance. Thus, people would be held harmless by the change, but we'd get rid of this government-made distortion in how employers pay their employees.

Barack Obama, get this, demagogued that plan and accused McCain of wanting to increase taxes on people.

And meanwhile, he schemed to achieve the same thing, except without that part about giving people an additional tax credit which would offset increased taxes, and, get this, without telling people he was getting rid of the tax exemption.

Once again -- subverting democracy by completely destroying the concept of Consent of the Governed.

What Gruber says Obamacare was meant to do is this: In its first few years, it will impose a massive -- 40% -- tax on "Cadillac plans," thus taxing them at a high rate. Thus getting rid of the exemption for such plans.

Initially, only 8% of plans would be so affected.

But here's the thing: The level at which you will be socked with this 40% tax will only go up, year by year, based upon the slow-moving CPI, rather than the fast-moving rate of medical inflation, which is of course what the yearly adjustment really ought to be pegged to, given that this is a medical expense, and not an ordinary consumer expense.

Net result? As the years pass, more and more health insurance plans will be wacked by the 40% tax, because it will not be adjusted by much each year; and ultimately, virtually all plans will be subject to it.

Thus, the health care plan tax exemption will be repealed. Not in the way McCain proposed -- which included Fair Warning to the voter, as well as a tax-credit offset which would hold taxpayers harmless in the change.

No -- the health care plan tax exemption will be repealed by, get this, stealth and trickery.

And that's coming. The law is already written. Every year, the "Cadillac plan" level will get lower and lower (well, it will go slowly upwards, but the costs of medical treatment will go up faster than it does), and more and more plans -- ordinary, run-of-the-mill plans -- will be deemed "Cadillac plans" and thus taxed at a 40% rate.

And employers will, naturally, stop offering them. They don't want to pay a 40% rate.

And thus, without the public ever agreeing to it, private medical insurance is effectively ended in the United States.

And this was all part of the plan.

Kept secret from you.

"It turns out politically it's really hard to get rid of," Gruber said. "And the only way we could get rid of it was first by mislabeling it, calling it a tax on insurance plans rather than a tax on people when we all know it's a tax on people who hold those insurance plans."

(The White House press secretary said at a press briefing in 2010: "I would disagree with your notion that it is a tax on an individual since the proposal is written as a tax on an insurance company that offers a plan.")

The second way was have the tax kick in "late, starting in 2018. But by starting it late, we were able to tie the cap for Cadillac Tax to CPI, not medical inflation," Gruber said. CPI is the consumer price index, which is lower than medical inflation.
Gruber explains that by drafting the bill this way, they were able to pass something that would initially only impact some employer plans though it would eventually hit almost every employer plan. And by that time, those who object to the tax will be obligated to figure out how to come up with the money that repealing the tax will take from the treasury, or risk significantly adding to the national debt.

"What that means is the tax that starts out hitting only 8% of the insurance plans essentially amounts over the next 20 years essentially getting rid of the exclusion for employer sponsored plans," Gruber said. "This was the only political way we were ever going to take on one of the worst public policies in America."

Unions and employers who object in 2018, he noted, "at that point if they want to get rid of it they're going to have to fill a trillion dollar hole in the deficit...It's on the books now."

Incidentally, this will also be a backdoor tax hike on the middle class, even if employers stop providing insurance. Instead, employers will cancel insurance and pay them somewhat increased wages -- but those wages will be taxed, which their health plan benefits had not been.



It's time to repeal this monstrosity cooked up by socialist serial liars.

Huge Update: Where was Barack?

Why, leading the discussions on how to kill the health care plan tax exemption, of course!

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