Whether we get the House or Senate version of health care reform, the tax man cometh. But in what form? The House health care plan unveiled today leans on a surtax on rich people to pay for the expansion of Medicaid and insurance subsidies for less fortunate Americans. The Senate Finance plan dreamed up an excise tax on richer insurance plans. Those might sound similar because I described them both using the words "tax" and "rich," but they're very different ideas, for a couple reasons.
The surtax isn't really about changing behavior. It's just a tax on high income included for the sole purpose of making the bill deficit neutral. The excise tax is actually designed to have a specific incentives: To encourage employers to switch to cheaper plans and move more of their workers' compensation into wages. In fact the Joint Committee on Taxation estimates that up to 80 percent of the revenue from the excise won't come from the excise tax, but from income taxes on wages that increase as a result of that switch.
The blog post is only one paragraph and a couple of sentences longer - might be worth it to click over and read the whole thing. But, assuming we do get one or the other this year, what's your preference, and why?