Now Obama Favors Taxing Health Care Benefits

During the presidential campaign, President Obama aggressively opposed John McCain's idea of taxing an employee's health care benefit. For what it is worth McCain's proposal would have offered some form of credit. During the campaign Obama indicated this type of tax would amount to a large tax increase on the middle class. The New York Times is reporting in an article this morning, Administration Is Open To Taxing Health Benefits, that the Obama administration may now favor taxing employees' health care benefits.

Washington and the Obama administration need to read the history books that cover the Great Depression. One factor that is cited as pushing the country into the Great Depression, was the government's policy of raising taxes and tariffs. The Obama budget that has been proposed and tweaked continues to take more money out of consumer pockets by raising additional taxes. Consumers lose the ability to spend and lose confidence as more proposals are brought forth that raise taxes on consumers.

If this proposal gains traction, I suspect the stock market will not look favorably on this tax increase. This proposal could reverse last week's gains.