WSJ: McCain’s Socialist Health Care plan’s most ardent supporter

Former Department of the Treasury Deputy Assistant Secretary for Tax Analysis Robert Carroll had this to say about John McCain’s Health Care Plan:

Another point to emphasize in an analysis of the McCain health credit is that it is highly redistributive. That is, it rechannels a significant portion of the current tax subsidy for health care to the low and moderate income, which is where a lot of the insured happen to reside in the income distribution. I would think that those on the left would find this aspect of the proposal, plus spending another $1.4 trillion (over ten years) on health care, to be somewhat attractive.

And while nearly 70 percent of economists told the The Economist that they found John McCain’s health care plan to be “Bad” or “Very Bad,” Carroll extolled its virtues in an opinion piece for the Wall Street Journal:

The McCain health-care insurance tax credit may well be one of the most misunderstood proposals of this presidential election. Barack Obama has been ruthless in his attacks. But the tax credit is highly progressive and will provide a powerful incentive for people to purchase health insurance. These features under normal circumstances should endear Democrats to the proposal. …

… How large an effect does this proposal have on the number of uninsured? Based on estimates by career economists in the Treasury Department’s Office of Tax Analysis of similar proposals discussed in the Washington Beltway several years ago, the McCain health-care tax credit can be expected to increase the number of insured by 15 million and probably more. The Lewin Group, a respected private health-care research outfit, recently estimated that the McCain credit would increase the number of insured by as much as 21 million. It is true that many may no longer get their insurance through their employer, but they will be given the resources to purchase insurance on their own.

Will the insurance that is purchased be a generous plan with first dollar coverage or low deductibles? It is much more likely to be a plan with higher deductibles that is more focused on providing true insurance against catastrophic losses rather than a more generous plan that includes a lot of prepayment for routine and predictable medical expenses. But this is precisely one of the objectives of the policy: to reduce the current tax bias that encourages people to funnel routine health expenses through insurance policies.

Mr. Carroll’s opinion is to be trusted, as he’s vice-president for Economic Policy at the Tax Foundation (1). He was an Economic advisor to the President of the U.S. (2). He’s a writer of scholarly papers and columns on the economy (3) (4).

A socialist health care plan that offers less coverage. It’ll benefit everyone. At least, it’ll benefit everyone firmly clutching “The Fountainhead” and “Capitalism and Freedom.”

(1)Tax Foundation is not a reliable source – Paul Krugman.

(2) That President being George W. Bush.

(3) Along with top McCain advisor Douglas Holtz-Eakin.

(4) Along with Greg Manikew, chairman of the Council of Economic Advisers from 2003 to 2005.

–WKW