CWA to White House: Benefits tax is a tax on the middle class
Posted on December 17, 2009 by: Bill Salganik | Category: CWA's Health Care Campaign
Directly challenging a key White House economic adviser, CWA today released a report saying the proposed health benefits tax represents "a significant increase in taxes on millions of middle-class families."
The tax will impact nearly 25 million households - about 58 million Americans - in 2019, including one-fifth of households with incomes between $50,000 and $75,000, CWA said, citing data from the Congressional Joint Committee on Taxation.
"This new data demonstrates irrefutably that the excise tax - which will result in reduced coverage and increased costs for our middle class families - is the opposite of reform," CWA President Larry Cohen said. "There are other options for funding reform, such as those in the House version of bill, which do not place the burden on middle class Americans. This new data shows that the excise tax is not one of them."
The report takes issue with a blog entry yesterday by Jason Furman, deputy director of the National Economic Council, saying the benefits tax wouldn't hit middle class families and that employers who cut benefits to avoid the tax would raise wages with the money they saved.
The employers themselves, by the way, say they won't raise wages. As cited in the CWA report, a survey by the consulting firm Towers Perrin found 78 percent of employers said they would retain any savings as profits, and only 9 percent said they would increase pay for workers.
CWA's challenge to the White House comments caught the attention of the Washington newspapers Politico and The Hill and the progressive blog Firedoglake.
The CWA report shows large tax impacts on CWA members. "CWA negotiated health care plans are not 'Cadillac' plans offering 'excessive' benefits," the report says. "The benefits in CWA's plans are more like Chevys than Cadillacs as they are roughly comparable to other plans, but provide for more limited cost sharing."
Several recent studies have shown that high-cost plans, which would be subject to taxation under the health reform bill being considered by the Senate, have high premiums generally not because they offer lavish benefits, but because the workers they cover are older, work for a smaller employer or live in regions with high medical costs.
