Organized labor members may get a tax holiday on their health care benefits

Remember these two powerful words from president Obama. “I won!”

And for all those union members that supported my campaign I plan to take care of you. So as we craft the billion dollar national health care plan we send up a trial balloon that all active collective bargaining agreements will enable you to avoid taxation on these negotiated benefits while the rest of the private sector will be forced to add their health care coverage cost to their taxable income.

Please read the following Bloomberg Report covering this special interest group  concept at the link provided below. Here’s the opening paragraphs.

June 26 (Bloomberg) — The U.S. Senate proposal to impose taxes for the first time on “gold-plated” health plans may bypass generous employee benefits negotiated by unions. Senate Finance Committee Chairman Max Baucus, the chief congressional advocate of taxing some employer-provided benefits to help pay for an overhaul of the U.S. health system, says any change should exempt perks secured in existing collective- bargaining agreements, which can be in place for as long as five years.

The exception, which could make the proposal more politically palatable to Democrats from heavily unionized states such as Michigan, is adding controversy to an already contentious debate. It would shield the 12.4 percent of American workers who belong to unions from being taxed while exposing some other middle-income workers to the levy.

“I can’t think of any other aspect of the individual income tax that treats benefits of different people differently because of who they work for,” said Chris Edwards, director of tax policy studies at the Cato Institute, a Washington research group that often criticizes Democrats’ economic proposals. Edwards said the carve-out “smacks of political favoritism.”

About Larry Gilbert