It’s especially important to note that during the 2008 election:
When millions of blue-collar workers were leaning toward John McCain during the 2008 campaign, labor unions moved many of them into Barack Obama’s column by repeatedly hammering one theme: Mr. McCain wanted to tax their health benefits.
How quickly we forget. From PDA:
The House bill does not contain such an excise tax, and many House Democrats oppose adding it to the combined House-Senate legislation. But the tax is a critical revenue component in the Senate’s bill. If the bill does too little to cover its costs, it might be defeated. Many economists support the tax, saying it will help hold down costs.
With labor groups warning that the tax will infuriate a key part of the Democratic base – union members – President Obama has agreed to meet with several top labor leaders on Monday to address their concerns and try to defuse their anger. The group includes the presidents of the A.F.L.-C.I.O., Teamsters and the steelworkers’ and service employees’ unions.
Hmmmm. This is not affecting just people making over $500k…this now affects me, and we make no where near that! And it affects my family. And likely you. Massachusetts has the highest insurance premiums in the country.
http://www.boston.com/news/hea…
Union members and their families have a lot to think about between now and January 19. My family, mostly Dems and Independents, are more than a little worried about this.
Many plans offered to municipal employees (for example Advantage Blue and Blue Choice) would exceed the limits in the Senate Bill and be subject to the excise tax on “Cadillac” plans. These taxes would hit municipal employees in two ways (and I assume that the bulk of the tax imposed will be passed on to the entities and people paying for the policies):
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p>1) The employee will end up paying more as their percentage of the cost sharing for the policy. That is as the price goes up so too does the amount paid by the employee.
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p>2) The remainder of the price increase will be borne by the municipality which will indirectly hurt both the employees and the taxpayers. With higher costs resulting from the tax there will be less money in the budget for personnel related costs. These costs could be training for employees, actual employees (i.e. layoffs) or reduced current and future salaries.
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p>Taxpayers will be hurt by the increased cost to their budgets for health care expenses which will require either reduced services or increased taxes (or some combination of the two). Taxpayers at the municipal level also could be harmed by increased costs at the State level for the Medicaid increases (unless you happen to be from Nebraska) which could lead to lower state aid and the need for further tax increases or service cuts at the local level. Again, either way not a good set of choices.
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p>Senator Kerry support this tax and thinks that it will result not in increased costs to the employees completely. He has stated that he believes that the employees’ wages will be increased to make up for the increased costs arising from the Cadillac plan tax. While this sounds nice I do not think this will be the likely outcome as it would require taxpayers to bear the increased costs entirely which does not make much sense. However, it does help explain why the tax revenues to be derived from the Cadillac tax come partially from the tax and partially from increased income taxes for the increased incomes assumed to result from the tax.
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p>I think municipal employees and their unions (as well as municipal government and tax payers) need to look really closely at how this provision could impact them and make their feelings known before it becomes part of the law.
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p>This could result in an enormous tax increase assessed indirectly on hard working middle class Americans. They should know the impact before being asked to support a plan that could harm them financially.
For anyone wondering why Martha Coakley is in a tough fight, the fact that Democrats are pulling this crap is the answer.