We thought at least one awful idea on health care was done, but now we hear that the idea to cap home-mortgage and charitable deductions is back in play. This report explains:

Senate Democrats are revisiting proposals to raise taxes on high-income people to help pay for an overhaul of the health-care system. The main proposal getting renewed attention is one by President Barack Obama that would limit the federal tax deductions for higher-income families for mortgage interest and other widely claimed purposes, said two senior Senate Democratic aides.

The development reflects a hardening of partisan lines in the effort to forge a health-care bill. Raising taxes on the wealthy was regarded as a virtual deal-breaker for Senate Republicans engaged in negotiations over the spring and summer. So Senate Democrats steered clear of such an approach.

[. . .]

Targeting the rich also conflicted with Finance Committee Chairman Max Baucus’s hopes of taxing the most costly employer-based health plans as a way to reduce overall health-care spending. But many Democrats are losing hope that Mr. Baucus’s bipartisan negotiations will produce a deal, so they are beginning to plan for a bill crafted by Democrats. A spokeswoman for Mr. Baucus (D., Mont.) said his committee is still pursuing a bipartisan bill.

Placing much of the burden of a health-care overhaul on higher-income earners is likely to face political hurdles of its own, particularly among moderate Democrats. And limiting the value of deductions for higher-income earners could run into opposition with some interest groups, such as the real-estate industry.

The imposition of such a cap would generate close to $100 billion over the next decade, said a person familiar with the situation. A health overhaul could cost the federal government as much as $1 trillion over 10 years.

No, we don’t know how the rest of the $1 trillion gap would be closed, but this tax idea already bombed. If you recall, a wide array of lawmakers and charitable institutions pointed out that it was atrocious social policy to make it harder to give to charities — in a recession, no less.

Perhaps this is just a trial balloon or a ploy to garner support for some other tax plan. It would be hard to believe that Democratic lawmakers could come up with a scheme that would make the already faltering health-care-reform effort even less popular. But this would do it.

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