New taxes could help pay for reform, but would cost political capital

Jun 4 2009

Two new taxes that could help pay for health care reform both carry political baggage.

The first, a possible new tax on at least some employer-sponsored health benefits, has support from members of Congress on both sides of the aisle. But during last year's presidential campaign, President Obama spoke out strongly against just such a plan when his opponent, Sen. John McCain suggested it, Roll Call reports. "Within weeks, Obama may find himself hawking around the country legislation that includes a provision he so ardently rejected during the campaign. Obama didn’t just oppose the exclusion. He all but drew a 'read my lips' line in the sand ... 'For the first time in American history, [McCain] wants to tax your health benefits,' Obama said on the campaign trail. "Apparently, Sen. McCain doesn't think it's enough that your health premiums have doubled'" (Koffler, 6/4).

Also sticky is a proposed new levy on soda, beer and wine that the Senate Finance Committee says would restrict the use of unhealthy products while at the same time raising money for health reform, the Associated Press reports. However, "Advertisers, corn refiners – even addiction treatment centers – have mobilized their lobbyists, reflecting how a tax increase for a handful of popular products can reverberate broadly across Washington's interest groups" (Fram, 6/3).