President Barack Obama made a campaign promise that he would not raise taxes on individuals making under $200,000 or couples under $250,000. However, Senator Max Baucus, a Montana Democrat, made a statement on the floor this week that seems to dispute Mr. Obama’s tax pledge.
“One other point I think that is very important to make is that it’s true in certain cases taxes will go up for some Americans who may be making less than $200,000,” said Mr. Baucus.
I asked Senator Baucus on Thursday to elaborate further on his statement. “It’s complicated. The wages go up when your health care policies are less expensive,” he said. “Employers will make up the difference often, according to the CBO, with wage increases, and when wages go up, sometimes people pay a little more in taxes, but on a net basis they’re ahead.”
Mr. Baucus disagreed that his statement on the floor showed Mr. Obama broke a campaign promise. He said, “People will be better off as a consequence of this bill. On that basis, they’ll be wealthier and have more income under this bill.”
However, the Senate bill that was signed by the president would mandate new taxes on insurance companies, drug companies, and medical device makers. Furthermore a 40 percent tax on the part of insurance premiums on plans above $8,500 per year for individuals and $23,000 per year for families. According to the Kaiser Family Foundation, this cost for a family goes further than the usual cost of a family insurance plan of $13,375.
The insurance companies will simply pass the new taxes off on to the consumer. It is still mystery as to how this kind of circumstance will make Americans “wealthier.”