Max Baucus has joined Chuck Schumer, Jay Rockefeller and others in endorsing a proposal to tax existing health insurance plans to pay for coverage for the uninsured. Exercise for the reader: Show why the following violates everything we know about the economics of taxation:

Senator Schumer:

“The health insurance industry should pay its fair share of the cost because it stands to gain over 40 million new consumers under health reform legislation.”

Senator Rockefeller:

“[The fees are justified because insurers are] rapaciously, greedily and unstoppably making money by underpaying the patient, by underpaying the provider and by overpaying themselves.”