Warning: Complicated Tax calcuations follow. I promise a treat after.

I hate putting tables in dkos because they're a royal pia to format:

Reprinted

tax tables from the IRS for 2007 - Married Filing Jointly

$0-$15,650 10%

$15,650.01- $63,700 $1,565.00 + 15% over 15.650

$63,700.01-128,500 $8,772.50 + 25% over 63,700

$128,500.01-$195,850 $24,972.50 + 28% over 128,500

$195,850.01-$349,700 $43,830.50 + 33% over 195,850

$349,700.01and up $94,601.00 + 35% over 349,700

Here's the Math

Family of 4 earning $70,000* Under our Current System

Annual Health Premiums = $14,122 shared costs between employee and company (2 standard family insurance plans are listed below)

*The $5,480 is deducted in pre-tax dollars for most employer plans. If the $5,480 is paid with pre-tax dollars, then the Family of 4 that grosses $70,000 actually pays taxes on $70,000 - $5,480 and taxable income is reduced to $64,520. The taxes are then calculated accordingly. (All the MSM and tax experts don't account for this factoid, which favors McCain's rhetoric.)

Using the tax table above with adjusted earnings of $64,520

Current Tax bill = $8,772.50 + $205 = $8,977.50

Employer Ins: Company pays $8,632 + Employee pays $5,480* = $14,112 annual ins pymts (not taxed)

Family pays: Tax bill $8,977.50 + Emp. Ins. premiums $5,480 = $14,457.50

*If the $5,480 is deducted from after-tax dollars (the employer contributions are still not taxable). Then the Family of 4 really does earn $70,000 and the tax bill goes to: $8,772.50 + $1,575 = $10,347.50

Tax bill $10,347.50 + Emp. Ins. premiums $5,480 = $15,827.50

Note: Under the current system; there are some employers that make employee contributions subject to federal withholding, but the employer contributions are not taxable.

Enter McCain

McCain Family of 4 earning $70,000*

*McCain taxes health insurance premiums, so both the employer and employee contributions are subject to federal withholding. This family may think they earn $70,000, but under McCain they actually earn $78,632 (their gross plus employer contributions for health insurance premiums).

McCain Annual Health Premiums = $14,122 shared costs between employee and company

McCain Employer Ins: Company pays $8,632 + Employee pays $5,480 = $14,112 annual ins pymts

McCain Family of 4 who used to earn $70,000 now earns $78,632

Continuing to use the Tax Table above:

McCain’s Tax bill = $8,772.50 + $3,733 = $12,505.50 - 5,000 (Tax Credit) = $7,505.50

McCain Family Pays: Tax bill $7,505.50 + Ins. premiums $14,112 = $21,617.50

That would be $5,790-$7,160 more than they pay now.

Add another 7.65% of the employer contribution and the family gets stuck for another: $660 for $6,450-$7,820.

UPDATE: Elfling points out quite rightly, that the employer contribution will then be subject to the 7.65% payroll tax. I'm going to leave these tax calculations alone, but the reality is that the employer is likely to reduce their contributions by the increased payroll taxes.

The only thing this family can do is find cheaper insurance that covers less with higher deductibles and co-pays. Only now, the family has to bow out of their employer's insurance program and they have to forfeit the employer contributions (because we all know the employer isn't going to give you a raise if you don't take their insurance).

Ummm, let's take the family insurance premiums down to $11,500 per year

Still using the Tax Table above:

McCain’s Tax bill = $8,772.50 + $1,575 = $10,347.50 - 5,000 (Tax Credit) = $5,347.50

McCain Family pays: Tax bill $5,347.50 + Ins. premiums $11,500 = $16,847.50

Ok, that's better.

That would be only $1,020-$2,390 more than they pay now.

Add another 7.65% of the employer contribution and the family gets stuck for another: $660 for $1,680-$3,050.

Add the loss of the employer's contributions of $8,632 or $8,632 - 660 = $7,872 and if you're like me, you're not sure which way to go with that $8,632 or $ 7,872 other than to shuck this claptrap and vote for Obama.

Sooooo, we not only have a new definition of "budget neutral", we also have this family with less effective health insurance that covers less services with higher deductibles and higher co-pays and a loss of their employer's contributions of $8,632.

I don't see this as an advantage.

McCain really must think we are stupid.

People will drop their coverage altogether with a plan like this.

...and the lady at the WSJ is full of crap when she said:

Sen. McCain's plan actually would lower taxes for most people. But that means the plan wouldn't pay for itself, because it cuts certain taxes more than it raises others.

it seems to be the other way around to me.

...but you can tell her that yourself

Write to Laura Meckler at laura.meckler@wsj.com

No, I'm not going to go back and do this for singles....well, maybe in a day or two.

...and for staying with me though all of this, you get 2 treats. One after the 2 insurance policies and one all the way at the end after a short section about how Obama is leading us 3 Steps Forward.

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Reference Section

These are lifted directly from a couple insurance cards I happen to be lucky enough to be able to share with you. (HIPAA and all) They are from families that earn around $70,000 per year.

Neither one is a "gold plated plan". In fact, these are pretty standard for what's out there today.



$14,112 - Family Insurance Plan

is a POS/PPO plan in South Florida for a Family

In-Network Co-pays of: $15 PCP, $25 Specialist, $100 Hospital

In-Network providers subject to Limiting Fees

Out of Network $500 aggragate deductible per person ($1,500 for family), then regular co-pays,

Out of Network - Ins payments are based on limiting fees - patient subject to balance billing (the patient pays whatever the insurance doesn't).

No Copays for:

Mammograms

Vaccinations

Includes Dental Plan that pays about 50% subject to limiting fees

Includes vision plan of 1 exam and 1 pair of glasses or 12 pair of contact lenses per year.

Physical Therapy limited to $2,500 per year

Mental Health limited to $2,500 per year

Out-of Pocket Costs Capped at $3,000 per year

$11,500 - Family Insurance Plan

is a POS/PPO plan in South Florida for a Family

In-Network Co-pays of: $20 PCP, $35 Specialist, $150 Hospital

In-Network providers subject to Limiting Fees

Out of Network $750 non-aggragate deductible per person ($2,250 for the year) , then regular co-pays,

Out of Network - Ins payments are based on limiting fees - patient subject to balance billing (the patient pays whatever the insurance doesn't).

All services subject to co-pay

No Dental or Vision

Physical Therapy limited to $1,500 per year

Mental Health limited to $1,500 per year

Out-of Pocket Costs Capped at $6,000 per year

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Going 3 Steps Forward With Obama:

Last year I wrote a critical diary directed at Barak Obama's health care proposal. Back then he had the plan's basics. Today, I have to say Obama has moved 3 Steps Forward with his plan and it's far better and more detailed than what I wrote about in May of 2007. What I really like is that Obama has answered his critics questions and isn't afraid to commit to paper the real plan. Although his vision isn't perfect, he's continuing to go forward with a plan that is far better than what we have now.

My original post in May of 2007 Obama: Health Insurance is NOT Health CARE!!! covered what to me were serious gaps, flaws and a scary lack of detail in Obama's health plan. I wasn't convinced back then. Today, all of my issues are directly addressed in one place or another on Obama's campaign site.

http://www.barackobama.com/...

http://www.barackobama.com/...

http://www.barackobama.com/...

I'm not going to write about Obama's plans, because his campaign site does a pretty good job of it and he owns up to the costs of it:

Q. How will we pay for the Obama plan? A. The Obama plan will realize tremendous savings within the health care system to help finance the plan. The additional revenue needed to fund the up-front investments in technology and to help people who cannot afford health insurance is more than covered by allowing the Bush tax cuts to expire for people making more than $250,000 per year, as they are scheduled to do

.

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...and since you've been so patient with me, here's Jeff Dunham and Peanut goes to Washington. (The last 5 seconds is how I think of McCain these days.)

and a Peanut blooper reel