Sen. Barack Obama's campaign has put out three new ads in the last few days attacking Sen. John McCain's health care plan, two of which focus on the proposal of a tax credit. The Obama campaign is telling viewers McCain will tax their health benefits. Sen. Joe Biden, Obama's running mate, told viewers of the October 2 debate the same thing. The mainstream media aren't correcting them. The accusations are wrong. McCain is replacing one tax break with another - one that is much more generous and will be especially helpful to people who are uninsured. Here's how McCain's plan works:
If you're insured through your employer: You already are getting a tax break - worth about $4,200 to the average American family. You don't see it because your health insurance - which is part of your compensation package - is tax-free.
McCain's tax credit of $5,000 for a family would replace this $4,200 break you're currently getting - and then some.
If you're uninsured or have individual insurance: You're NOT getting the same tax break as all those people insured through their jobs. McCain's credit would give you the same advantage they would have - even if you make too little to pay income tax. It's a "refundable" credit, meaning you get it anyway, even if you don't owe taxes.
The tax credit replaces a break 60 percent of workers are already getting - and gives new money to those without coverage to buy insurance. Even now, policies bought on the individual market cost about half as much as employer-based policies, so the $5,000 credit will go a long way toward helping them buy coverage.