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The Wall Street-Health Care Connection
Posted on Jul 23, 2009
By Mike Elk
"If the only income Paris Hilton gets is in capital gains, stock dividends, interest and other types of investment income, [then] currently she is completely exempt from the one big tax we have right now that is dedicated to health care," said CTJ’s Steve Wamhoff when he released the proposal.
However, there is a lack of political will among those heavily subsidized by the financial-services industry to levy any kind of tax that could adversely affect the titans of Wall Street.
Some conservative Democrats have taken in sizable sums from Wall Street in campaign donations; Blue Dog leader Ross raked in nearly $900,000 from the financial-services industry in campaign contributions. Montana’s Sen. Max Baucus counts the securities-and-investment industry as the top sector from which he gleans campaign contributions, according to OpenSecrets.org; among his top five contributors are Goldman Sachs, AIG and KKR & Co.
Instead, friends of Wall Street have zeroed in on an easier target: labor unions. Some supporters of taxing health care are portraying unions as greedier than the actual greedy people they fight by talking about the high-quality health care they negotiate for members as having "gold-plated" benefits.
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A study by Elise Gould of the Economic Policy Institute shows that those most affected by taxing health care would small businesses and the people employed by them, since their health-care plans are often more costly per-employee than those of larger businesses. Businesses with an older workforce would also be adversely affected, Gould found.
The most perplexing aspect of conservative Democrats’ opposition to a health care reform bill that taxes the wealthiest but doesn’t tax benefits is political. With public support high for taxing the rich to pay for health care, it’s hard to imagine that even conservative Democrats would suffer at the polls for voting on a progressive plan. If Democrats instead choose to tax health care benefits, it could potentially derail health care reform. The political cost for failing to pass health care reform would be high.
Robert Creamer, political strategist and author of Stand Up Straight: How Progressives Can Win, writes, "History shows that swing-district Democrats have the most to lose if Congress fails to pass President Obama’s sweeping health care proposal."
When I worked as a community organizer on Obama’s presidential campaign, I could swing some of the most ardent Republicans to vote for Obama by telling them that McCain would tax their health care.
I encountered NRA members who were more scared of McCain taxing their health care than of Obama taking away their guns. (Granted, McCain’s plan called for taxing all health-care benefits, not just those that exceeded a cap. But I doubt they would have been enthusiastic about a tax on especially good benefits.)
"If any of these Democratic senators vote for [a tax on health care benefits], they will be voted out in 2010, and this will definitely be used against Obama in 2012," Vincent Panvini, the Sheet Metal Workers Union political director, told The Nation‘s William Greider. People are already hurting, unemployed—and then you are going to tax them more? That’s crazy."
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