Doesn't the McCain tax plan directly raise taxes on employees even after the $5000 "tax credit"? On the average, employer paid health care costs about $12600 and the employee pays about $3400 of that currently. Under the McCain plan the employee would continue to pay the $3400, would get taxed about $1500 and get a $5000 "tax credit". However, the $5000 wouldn't go to the employee, it would go directly to the insurance company to partially offset the insurance cost. It is more properly described as an insurance subsidy than a tax credit. The net result is that of the $12600 cost, $3400 would be paid by the employee, $5000 by the subsidy, and $4200 by the employer. Presumably the employee wouldn't be taxed on the subsidy, but would be taxed on the $4200 employer contribution, something like $600 in addition to the $3400 contribution. In the end, assuming the employer kept offering the health insurance, the employee would go from paying $3400 now to $4000 under the McCain plan due to the $600 tax increase.