Fears about health reform costs are a mirage

Timothy Noah points out that the $600 billion dollar price tag for healthcare reform is not that big of a deal. The Health and Welfare Committe does not have the jurisdiction to propose any taxes to offset the costs. However there is a reasonable amount of taxation that could easily offset the costs.

"The health insurance exclusion is regressive, since people making more money tend to receive the most generous health benefits. On the other hand, eliminating the exclusion entirely would increase the tax liability of people earning less than $50,000, as a percentage of income, much more than it would people earning more than $200,000, assuming both groups received health insurance through their employers. A reasonable compromise, therefore, would be to maintain the exclusion for people earning below a certain amount (say, $50,000) and reduce it for people earning more. In the March 17 New Republic ('Tax My Health Benefits, Please'), Cohn noted that a tax scheme along these lines, proposed by Jonathan Gruber of the Massachusetts Institute of Technology, would raise 'more than $700 billion over ten years.' If included in health reform, such a plan would net the feds a $100 billion surplus during the next decade. As a side benefit, it would exert some pressure on health insurers to lower premiums."