Unions Push Back on Health Care Tax

Seriously, did anyone think the back door tax on employee benefits would survive. Lets be clear, Obama said he wouldn't tax employee benefits but didn't close the door on directly taxing the Insurance companies that provide these plans. Of course in the real world the Insurance company would simply roll the tax right back to the workers. By Obama standards that is almost telling the truth. Anyway its all but dead as the Unions, the true Boss of Bosses for the Democratic party have signaled their displeasure on this aspect of the Baucus plan:

A sweeping proposal to fix the health system, unveiled this week by Finance Committee Chairman Max Baucus (D., Mont.), would impose a 35% tax on high-dollar health plans offered by insurers. The tax on insurers is the biggest revenue generator for a plan that is expected to cost about $774 billion over 10 years.

The new tax is intended to target "Cadillac" plans offered to wealthy individuals. It would fall on plans valued at $8,000 or more for individuals, and at $21,000 or more for families. Unions say that would hit the plans of many of their members, who tend to have generous benefits. And while the tax is aimed at insurers, which oppose the levy, some large insurers have already said they plan to pass the cost on to consumers.

"We don't have Cadillac salaries," said Robert Corner, a 63-year-old who works for Nebraska's department of roads in Lincoln and earns just over $50,000 a year. His parent union, the American Federation of State, County and Municipal Employees, estimates that its average family health plan in Nebraska will be worth $31,000 in 2013, the year the new tax thresholds would take effect. "It's really going to impact the middle class," Mr. Corner said.

Labor unions on Friday pressed lawmakers to submit amendments to Sen. Baucus's proposal that would peel back the tax. Teamsters Union President James P. Hoffa said he was pushing several Democratic senators to scrap the health-insurance fee and turn to a tax on wealthy individuals to help fund the health overhaul. "It's just a left-handed way to have taxes on health-care benefits," Mr. Hoffa said.

A Senate Finance aide said the tax would only affect 8% of Americans to start. But more could get hit over time. That's because the threshold for the tax is tied to the Consumer Price Index, not the rate of health-care inflation. If health-care costs rise faster than overall inflation, as has happened in recent years, more plans would be subject to the tax

For the record, many governments and companies provided generous health plans in lieu of pay increases. After fighting tooth and nail to get these deals its really not much of a surprise this tax has met such opposition and have pushed hard to see these plans exempted from any health bill.
Of course how this plays out with Obama's deficit neutral stance is a mighty fine question. By the way, simple blast from the past about how the left felt about this type of tax during the campaign: