The Cadillac tax.
 

Why, if the average family health care plan is $13k, and the tax doesn't kick in to $23k, are the unions in an uproar?

http://voices.washingtonpost.com/44/...=nl_pmpolitics

Pete

One part of it is that it is the proverbial camel's nose under the edge of the tent. Benefits have not been taxed before. Once the cherry is popped, there's no reason to believe that a greater and greater proportion of benefits will not be taxed. I'll look for a few more metaphors later.

Regards,

D-Ray

That's good D, we wouldn't want to run out :D

Pete

I agree but I suspect that the union objections are a bit less broadly focused. In recent years many unions have made significant salary concessions in order to hold onto their health coverage. Taxing those benefits would make the concessions pointless in the long run when insurance companies reduce benefits and maintain premium levels to recoup that tax.

I think the idea of taxing benefits is a terrible idea. GD Senate! A far better solution is to roll back the Bush tax cuts on the top 2%. That would accomplish a lot more in terms of funding the reforms and, at the same time, reducing the deficit.

Jean

Because many Union members dont have "average" healthcare benefit plans, the proof is in the Unions rage against this idea. The only way this would even be close to being fair is if they create a Grandfather clause saying current members are exempt but it is obsurd to continue the exemption for future members. If they do indeed promote unlimited exemptions for future membership that is a blatent attempt to encourage Union growth. Combined with Card Check it would further damage our economy and IMO bolster China and the like as prices would become increasingly non-competitive.
I dont think anyone should be exempt from this tax, whats good for one is good for all so either make it across the board when plans cross the threshold or find another way to fund this mistake.

You seem to forget that the ones who have the costly plans has SFA to do with benefits. The older peoiple have expensive plans because the insurance companies claim we are more costly to them than younger people so this is just another way of screwing senior citizens. Whee last year I got two flu shots out of Medicare, gonna bankrupt the system.

As unpopular as it is, taxing all health benefits is the appropriate course of action. Health benefits are a form of compensation which some get and some don't. Therefore, those who don't get health care are subsidizing those that do through the tax code. Secondly, when you are getting something for free, you tend to overuse it. The problem is that McCain articulated this (correct) position in the campaign and Obama had to come out against it (along with his statement about no tax increases for those earning less than $250K).

I'd agree to the extent that we should tax all or none. I'm not quite there with you on the compensation part.

John

Let's just say that 4 employers are offering health benefits packages valued at $5K, $10K, $15K and $20K, respectively, and another offers no health benefits at all. Are they not being compensated differently? Or let's say that you could defer on the $10K package in favor of additional salary because your spouse gets health benefits for both of you. Wouldn't that $10K in additional salary be taxed?

Your points are valid but I'm not sure they're germane since the proposal is to tax the insurance companies and not the insureds. The insurance companies will just use it as an excuse to diddle us - again. That's why I'm not there yet.

(I do think taxing the insured was what McCain proposed but that's not what's on the table.)

John