During conversations about health care reform, both during last year's presidential campaign and in debates this year on the subject, there has been controversy about the possibility of taxing employee health care benefits. The Washington Post recently had a story about President Obama being open to the idea of taxing some health care benefits that noted the following: "The decision would probably anger liberal supporters such as labor unions, but such a tax change would raise enormous sums of money as Congress and the White House are struggling to find the estimated $1.2 trillion needed to pay for health-care reform over the next decade." The possible anger from labor unions about this idea may have spurned a new plan that would help to exclude union members from this tax.
According to Bloomberg.com, "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." The article lated noted the following: "It [the exception] 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." This would mean that union members would receive special treatment through this exception and that nonunion workers would still be forced to pay the taxes. The article later quoted an AFL-CIO official who argued that unions contracts set expectations for workers in terms of their salary and their benefits and changing those contracts would be unfair. However, people who are not currently in unions have expectations about how how much they are making and their benefits also. Nonunion workers have to budget their finances each month and pay their bills like union workers do. Adding an additional tax, regardless of the overall merits of the idea, would affect union workers and nonunion workers and having a different set of rules for unions would only show that union members are treated better by this Congress and this President than people who are not in unions.
Even now, several weeks into a national discussion of health care, the taxing of health care benefits continues to be a contentious issue, although it is clearly not as contentious an item as the "public option" is. David Axelrod, adviser to President Obama, was quoted in the "This Week with George Stephanopolous" transcript as saying the the following: "The president had said in the past that he doesn't believe taxing health care benefits at any level is necessarily the best way to go here. He still believes that. But there are a number of formulations and we'll wait and see." It is still unclear how massive health care reform proposals would be paid for and it is also unclear if taxing health care benefits will be in the final version of the bill. However, if health care benefits are taxed, they should be taxed fairly on employees and union members should not be treated differently than other employees who do not belong to unions.