The Tax Increase McCain Doesn't Want To Talk About

(Political Animal)  THE TAX INCREASE MCCAIN DOESN'T WANT TO TALK ABOUT.... Time's Joe Klein, in an effort to move away from "the sewage that Steve Schmidt is shoveling," turns to an aspect of the healthcare debate that hasn't generated nearly enough attention.

John McCain wants to tax your employer-provided health care benefits. He wants to replace those benefits with an insufficient tax credit -- $2500 for individuals and $5000 for families (the average cost per family for health insurance is $12000). There is a positive, progressive tax aspect to this: wealthier people should have to pay for health insurance themselves, without tax breaks from the federal government.

But make no mistake: this plan will do little or nothing for those who do not have insurance now -- unless they are young and healthy -- and it may well hurt a fair number of workers, especially unionized workers, who get gold-plated benefits from their employers.

It will certainly do nothing for families with members who have pre-existing conditions or children with special needs -- because it makes no provision to regulate the insurers, forcing them to cover all comers at "community" rates that don't discriminate against the people who need health insurance most.

It is amazing to me that Obama campaign has let things go this far without pointing out that McCain -- who opposes the energy bill because it would increase taxes on oil companies -- is actually proposing a tax increase on health care benefits for American workers. But that is precisely what the Senator from Arizona is doing.

On the substance, Klein is exactly right. McCain's proposal would count the healthcare benefits Americans receive from their employers as taxable income, leaving tens of millions of middle-class families paying higher taxes and leaving millions more without insurance behind.

But on the politics, I'm not sure if Klein's observation is quite right. He finds it "amazing" the Obama campaign hasn't pointed this out yet. But here's the thing: the Obama campaign has pointed this out. Obama talks about it on the stump, and his team have been writing about it for quite a while.

It hasn't generated any real interest from political reporters, though, because a) it's substantive; b) it takes a few seconds to explain; c) there's no provocative video to accompany the story; and d) it makes McCain look bad.