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| Subject: Labor's $60 Billion Payoff: A health tax that hits everyone except the Democratic base Mon Jan 18, 2010 3:56 am | |
| Democrats seem impervious to embarrassment as they buy votes for ObamaCare, but their latest move makes even Nebraska's Ben Nelson look cheap: The 87% of Americans who don't belong to a union will now foot the bill for a $60 billion giveaway to those who do.
The Senate bill was financed in part by a 40% excise tax on high-cost insurance coverage. The White House backs this "Cadillac tax" as one of the few remaining cost-control tokens. But Big Labor abhors the tax because union benefits tend to be far more generous than average, and labor leaders and House Democrats have been throwing a political tantrum for weeks.
So emerging from their backrooms, Democrats have agreed to extend a special exemption from the Cadillac tax to any health plan that is part of a collective-bargaining agreement, plus state and local workers, many of whom are unionized. Everyone else with a higher-end plan will start to be taxed in 2013, but union members will get a free pass until 2018.
Ponder that one for a moment. Two workers who are identical in every respect—wages, job, health plan—will be treated differently by the tax system, based solely on union membership.
Richard Trumka of the AFL-CIO says this and other concessions mean the excise tax will raise some $60 billion less than the original Senate version. Democrats are probably going to charge investors for this political perk, by extending the 2.9% Medicare payroll tax to capital gains for the first time ever—on top of all the other taxes. Just what the economic recovery needs.
Meanwhile, the extra five-year dispensation gives labor lobbyists plenty of time to negotiate a permanent extension for the Democratic union base, even as labor is being armed with an important new organizational tool: Eliminating the secret ballot in union elections might be unnecessary when unions have an exclusive tax privilege at their political disposal. Right-to-work states will also be punished because they are less unionized.
The payoff shows that no one is doing a better job of rebutting the White House's technocratic cost-control claims than its own party. How exactly is the excise tax going to drive down premiums when a good part of the most expensive plans is exempted? The new union deal follows a similar one with Harry Reid that exempted the 17 states in which health costs are highest, plus longshoremen, construction workers, some farmers and sundry other liberal allies.
http://online.wsj.com/article/SB10001424052748703657604575004992410621692.html?mod=WSJ_article_MoreIn |
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