The proposed tax increase McCain doesn’t want to talk about

Steve Benen, The Carpetbagger Report: John McCain’s pandering on taxes has been one of the more embarrassing aspects of his campaign, as evidenced by his appearance at the Aspen Institute, when he admitted that he’d been pushed into a corner on Social Security and taxes, saying, “I have to be against tax increases, as you know.”

But for all the talk about McCain’s recklessness on tax policy, there’s a little secret that goes by largely unmentioned: the presumptive Republican nominee is actually proposing a tax hike on those who get employer-based healthcare coverage.

In their Wall Street Journal piece yesterday, Jason Furman and Austan Goolsbee, economic policy advisors for Obama, highlighted the policy detail McCain prefers to downplay.

…Sen. McCain’s plan does include one new proposal that would result in higher taxes on the middle class. As even Sen. McCain’s advisers have acknowledged, his health-care plan would impose a $3.6 trillion tax increase over 10 years on workers.

Sen. McCain’s plan will count the health care you get from your employer as if it were taxable cash income. Even after accounting for Sen. McCain’s proposed health-care tax credits, this plan would eventually leave tens of millions of middle-class families paying higher taxes. In addition, as the Congressional Budget Office has shown, this kind of plan would push people into higher tax brackets and increase the taxes people pay as their compensation rises, raising marginal tax rates by even more than if we let the entire Bush tax-cut plan expire tomorrow.

Got that? McCain’s hollow healthcare plan is bad enough, but the fine print includes a possible tax increase on tens of millions of people in the middle class.

What’s the McCain campaign’s response to this? It’s simple: just redefine “tax increase.”