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Friday, September 11, 2009

Healthcare Tax Deductions

Brian Holtz // Sep 10, 2009 at 6:59 pm

Tom, why are you against using healthcare saving as an excuse to cut taxes?

Brian Holtz // Sep 10, 2009 at 10:21 pm

Tom, when you complain about any change to tax incidence as “redistribution”, you morally privilege the status quo ante. I don’t see anything morally privileged about e.g. the historical accident that employer-purchased healthcare is tax-advantaged compared to individually-purchased healthcare.

Also: if law change X grants a tax break and does nothing else, then that’s a tax cut. You don’t get to win this argument by stipulating that there’s no such thing as a tax cut — or at least, that a tax cut doesn’t count as a tax cut unless accompanied by some kind of constitutional amendment (or other extraordinary legislative hurdle) against later raising some other tax.

Brian Holtz // Sep 11, 2009 at 2:23 am

Tom, any policy change whatsoever that falls short of Libertopia Tomorrow Morning can be labeled “social engineering” compared to possible alternatives. In the real world, utopia is not on the menu, and hunger strikes just make the nanny state fatter. If you can’t see tax-incentive-based healthcare reform as a potential way to head off the final socialization of the industry, and as a path toward eventually separating medicine and state, then I just don’t have time to show you any more eye charts.

Brian Holtz // Sep 11, 2009 at 9:06 am

That false dichotomy is what earned you the Libertopia Tomorrow remark. We can say that we favor any reduction in income tax rates, but as long as they are non-zero then individually-purchased health insurance should be just as deductible as employer-purchased health insurance. Do you defend the social engineering of tax preferences for the latter?

Tom, you’re too thoughtful a left-libertarian for me to believe that you’ve bought all the way in to the Rothbardian no-order-of-destatization nonsense. Many Libertarians talk about repealing the (progressive) income tax without ever mentioning (regressive) payroll taxes. If there were a button that could do that, would you push it? E.g. if there were a constitutional amendment banning just the one but not the other, would Rep. Knapp be willing to provide the swing vote to pass it? I would, but then as a calculating “social engineer” I have no qualms about saying that some sequences of destatization are better than others.