Why Does Chris Dodd Oppose Taxing Health Benefits?


550 dodd wikimedia.png

I can't quite tell, but this is what Senator Dodd had to say this morning on Fox News Sunday:

"The idea that you're going to have people out there that are struggling to make ends meet today, they're falling further and further behind ... to turn around and say you basically have no change in your health care plan, and by the way we're going to tax you now for those benefits ... I think is a very bad idea."

I think this is a pretty silly analysis of the situation. Max Baucus isn't proposing a cap on the tax exclusion for kicks; he's proposing it in order to raise revenue for an overhaul of the health care system. Does Dodd think that will be a net gain for those "struggling to make ends meet"? I suspect he does.

More generally, the problem here is that Dodd is trying to describe a highly regressive subsidy -- the tax exclusion -- as if it were a progressive boon to struggling families. It isn't. About three-quarters of the $250 billion in foregone tax revenues goes to families in the top half of the income scale. Capping a tax exclusion like that is by definition going to be progressive.

[For more, Jonathan Cohn recommended this piece by MIT's Jonathan Gruber (this subject is apparently dominated by a conspiracy of Jonathans), and it does a good job of laying out the case for the cap.]

A younger, wild-haired Chris Dodd via Wikimedia Commons
Presented by

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

Why Is Google Making Human Skin?

Hidden away on Google’s campus, doctors at a world-class life sciences lab are trying to change the way people think about their health.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Videos

Why Is Google Making Skin?

Hidden away on Google’s campus, doctors are changing the way people think about health.

Video

How to Build a Tornado

A Canadian inventor believes his tornado machine could solve the world's energy crisis.

Video

A New York City Minute, Frozen in Time

This short film takes you on a whirling tour of the Big Apple

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we save the night sky?

Video

The Pentagon's $1.5 Trillion Mistake

The F-35 fighter jet was supposed to do everything. Instead, it can barely do anything.

More in Politics

Just In