Here comes a tax on our healthcare benefits

Remember during the debates when Obama clearly said that he would not tax health benefits when McCain said he would give a tax credit in order to give more choices in healthcare. Well, guess what, remember that he would give 95% of the people tax cuts but would not raise our taxes? He is letting Congress come up with a way to tax our healthcare benefits.
From the NYT

The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.

he proposal is politically problematic for President Obama, however, since it is similar to one he denounced in the presidential campaign as “the largest middle-class tax increase in history.” Most Americans with insurance get it from their employers, and taxing workers for the benefit is opposed by union leaders and some businesses.

In television advertisements last fall, Mr. Obama criticized his Republican rival for the presidency, Senator John McCain of Arizona, for proposing to tax all employer-provided health benefits. The benefits have long been tax-free, regardless of how generous they are or how much an employee earns. The advertisements did not point out that Mr. McCain, in exchange, wanted to give all families a tax credit to subsidize the purchase of coverage.

At the time, even some Obama supporters said privately that he might come to regret his position if he won the election; in effect, they said, he was potentially giving up an important option to help finance his ambitious health care agenda to reduce medical costs and to expand coverage to the 46 million uninsured Americans. Now that Mr. Obama has begun the health debate, several advisers say that while he will not propose changing the tax-free status of employee health benefits, neither will he oppose it if Congress does so.

You know I have taken lower salaries because of the healthcare benefits. I see them as part of the whole package, such as vacation and sick leave, and now we are going to be taxed for this benefit? Are companies going to be forced to raise salaries in order to compensate employees for these additional taxes? What if you work for a company that has a higher cost healthcare plan, does that mean you will be taxed more than an employee at a larger company that has a lower cost plan? Will companies begin to not provide healthcare and this is just a way for universal healthcare to be demanded by the middle class. If healthcare benefits are taxed, then it seems it should also be a benefit that those who are on Medicaid need to report it so that it can be included in their “income” when benefits are determined.


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