Legal Commentary

Single Payer For The Village Wonks

By Big Tent Democrat

Even if I agreed with this column from Ezra Klein, and I do not, what is the point of writing a column NOW urging that employer health insurance costs be taxed? It has as much chance of passage as single payer. And even if it was a good time, do you find this convincing?

[H]ealth-care coverage is not a benefit. It's a wage deduction. When premium costs go up, wages go down. When premium costs go down, wages go up. Yet workers don't know that.

(Emphasis supplied.) They "don't know it" because it is not true. Health care coverage is indeed a benefit and it is ridiculous to state it is not. Should it be? Probably not. But that is like arguing that a pension or vacation time is not a benefit. Obviously both are. Whether it should be a tax-subsidized benefit is another question and I think there is a good argument that it should not be, IF we were starting a system from scratch. But we are not. More . . .

The employer-employee relationship has been built and negotiated within the system that has existed for decades. It is naive and wrong to pretend that any reduction in health care benefits will go dollar for dollar in wages. Yet that is precisely what Ezra does. He writes "when premium costs go down, wages go up." Ezra does not know that. You know why? Because there has never been a recent period where wages have gone down. Indeed, that is the central premise of Ezra's column - that the rise in health care costs threatens to bankrupt the country (also silly hogwash.)

In any event, this is ivory tower stuff. The chances of removing the tax deductibility of employer based health insurance in this bill is slim to none. Hell, I seriously doubt the excise tax is gonna survive. And a good thing too. Because we do not live in ivory towers. The employer-employee relationship exists in the real world, with real world bargaining expectations and power.

A reduction in health care benefits will not translate into a dollar for dollar increase in wages. Employees will lose money with such a reform. Now is certainly not the time to add even more burdens to the struggling workers of America.

Speaking for me only

Full post as published by TalkLeft on December 08, 2009 (boomark / email).