Alas animated gifs are a flaky technology that doesn't work the same for all users in the best of circumstances. I don't know how to make it work better. Making it into a video of a powerpoint presentation would be smoother and probably work for more folks, but I didn't have the time and ability to make that. I hope someone can view my animated gif, improve on it and post it where it can go viral.
For those who can’t view my animated gif, it walks through what would happen with a $12k health plan (Obama’s number) under McCain’s plan. The tax break shifts from the business to the personal side, so the $12k would be given directly to the worker as income to the worker rather than as a benefit. You buy the insurance individually with the $12k and should still be able to benefit from using the insurance pool at work. The $12k in “new” income raises your income tax; I used a 25% marginal rate for the example, giving $3k in new taxes. McCain gives you a $5k tax credit, enough to pay the $3k taxes and to leave $2k left like a health savings account above and beyond what you have now, while having the exact same insurance. Plus, his insurance buying reforms will let many folks get better insurance for the same price or the same insurance package for less money. The numbers Obama used to claim McCain’s plan left “average” folks worse off actually leaves them $2k ahead.
I think I understand most of what you are saying, and generally agree. However, $12,000 may not be so far off, after all, for a group / employer (partially) paid plan: I pulled out my 2007 W2 again, and the difference between my “Federal” wages and my “State” (and “Local”) wages is about $12,000. I believe that $12,000 represents what my employer and I were paying for the health care plan for my family and I.
By comparison, in 2003, the Federal and State wages figures were the same, as the health care premiums were not deducted off my (Federal) gross income.
That all brings up another question: Obama keeps saying that health care benefits have never been taxed. Huh? That health care premium “difference” that was not taken off my (Federal) gross income a few years back most certainly DID contribute heavily to my income tax burden. Taking that off the (Federal) gross helped lower my taxes quite a bit in recent years. It certainly helped more than the tax rate cuts (which also helped significantly, and I have a very average income and situation.)
Anyway, Obama could argue that we should not reverse that recent years’ subtraction off the W2 “line 1” gross income. But, noting that my employer paid for most of my own health insurance, and I paid the rest, and everything for the rest of my family, in previous years, I was most certainly taxed on my family’s health care premium.