Smokers, drinkers to carry tax burden? http://www.politico.com/news/stories/0509/22444.html If you make big bucks — or enjoy alcohol, cigarettes and Coke — the government might hit you up to pay for fixing the nation’s health care system. On Tuesday, the Senate Finance Committee peeked into vending machines and liquor stores, company payrolls and health savings accounts, looking for a mix of tax increases and spending cuts as a way to pay for a health overhaul — which could cost more than $1.5 trillion over 10 years. Experts thought the big debate might be public plan vs. no public plan. But that may well pale in comparison to the difficulty of settling on a way to finance health care reform. “I wish there were a number of painless options,” Robert Greenstein, executive director of the Center on Budget and Policy Priorities, wrote in his prepared testimony. “There aren’t.” There appeared to be a bubble of support among the experts for taxing bad behavior, including a $2 tax on a pack of cigarettes and a higher excise tax on alcohol. But soda and sugary drinks found a friend Tuesday in Sen. Chuck Grassley (R-Iowa), the ranking member on the Finance Committee. He categorically rejected the idea during a conference call with reporters. “No,” he said swiftly, when asked if there was any chance of taxing it. “I think, quite frankly, the only reason it’s being brought up is to get it shot down early so it doesn’t become part of the debate. I don’t think it’s going to have any legs at all.” Still, it’s easy to see why the bad-habits tax was so tempting: Taxing tobacco, junk foods and alcohol could raise $600 billion over 10 years. Lots of other options will also get a look. People who like the tax-free status of their company health benefits could be asked to ante up. Money in the pot: more than $700 billion over 10 years. Treasure the tax benefits from your health savings account? Some experts say the accounts encourage “excess consumption” of health services — and committee Chairman Max Baucus (D-Mont.) agreed they’re worth a look. Money in the pot: $60 billion over 10 years. The committee is far from settled on any one option — of which Baucus said there are many. Each item, down to the snickerdoodle, has a lobby behind it, paving the way for weeks of horse trading as the committee stitches together a tax package. A panel of economists presented the committee with a menu of scenarios, from wringing savings out of Medicare and Medicaid to cutting medical costs by reducing sodium levels in packaged foods and at restaurants. Non-health-related items remain in the mix, including capping the deduction on charitable donations, which received a chilly welcome on Capitol Hill after President Barack Obama proposed it in his budget. “The proposals that we have discussed,” Baucus said, “will not come easily. The reforms that we are planning are not cheap. ... Finding money that we can all agree on will not be easy.” Baucus gave one of the clearest signals yet that limiting the tax-free status on employer-based insurance remains a serious option. Obama opposed it during the campaign and repeatedly went after Republican John McCain for making it the centerpiece of his health care plan. Labor unions are also against it. Yet the idea is attractive because of the money it could generate: $250 billion annually if the deduction was lifted altogether. Baucus insisted a full repeal was not under consideration, but he said lawmakers must look at the deduction. “I know that there is some controversy around doing so,” Baucus said. “But the current tax exclusion is not perfect. It is regressive. It often leads people to buy more health coverage than they need.” Six of the 13 witnesses, including economists from the conservative American Enterprise Institute and the liberal Center on Budget Policies and Priorities, argued explicitly for the proposal. Employer-provided health insurance is considered part of workers’ compensation but is not taxed as wages are. Proponents of eliminating the benefit say it is poorly targeted because it gives the biggest benefit to those with the highest incomes and is unfair because self-employed individuals don’t qualify for the same break. It also encourages individuals to buy gold-plated insurance plans that can drive up health care costs, experts say. But a warning in the testimony from Gerald Shea of the AFL-CIO underscored why this option will be a thorny issue for Democrats. He said the idea could “disrupt the primary source of health coverage and financing for most Americans.” ------------------------------------------------- Way to go Barry, looks like you have other people raise taxes for you. Of course he will sign it into law. The funny thing to me about all the taxes they are proposing is that they are going to shrink consumer spending and they are going to hit the poor much harder than they are going to hit the rich. Our congressmen do not represent the people and the states anymore, they represent their parties and themselves. Why can't they consider something like...I don't know....cutting government spending, especially in areas where they don't belong. Time to significantly shrink the federal government.