As Senate Finance chair Max Baucus searches the national couch for spare change to pay for health care reform, one idea that has gained attention is taxing "Cadillac" health care plans. But now that the unions are balking, it looks like that plan will be set aside:
But labor’s main complaint is Mr. Baucus’s proposal to tax insurance companies for their most generous policies, as a way to raise revenue and to discourage wasteful health care spending. Labor says insurers would pass on their tax costs in higher premiums, not just for corporate executives but also for unionized workers with rich health benefits.To be fair, some union jobs are dangerous (think: coal miner) and thus the insurance policies are more costly. But if I'm not mistaken, my armchair legal knowledge tells me that taxing one group of people (non-union workers) and not another under the same criteria constitutes a bill of attainder which is unconstitutional. So there will be no Cadillac taxing and Obama will have to make up new ways to scrounge the trillion dollars he needs for health care reform.
Under Mr. Baucus’s plan, the tax would apply to family policies worth more than $21,000 a year. The typical employer-provided family plan costs roughly $13,000, but packages for some unionized workers can run much higher. Democrats are discussing raising the threshold, and the White House has privately assured labor that union benefits will not be affected.
VAT tax, anyone?
Flashback – WashPost in May 2009: "Once considered unthinkable, U.S. sales tax gets a fresh look." I'll bet.