From the New York Times:
Even as Congress weighed options to finance health insurance for tens of millions of Americans, lobbyists mobilized Wednesday to head off proposed taxes on employer-provided health benefits, alcoholic beverages and soft drinks.
Labor unions began attacking a proposal by Senators Ron Wyden of Oregon and Max Baucus of Montana, both Democrats, to consider changes in the tax treatment of employer-sponsored insurance, the main source of health coverage for people under 65.
Radio advertisements, run this week in Portland and Eugene, Ore., at a cost of $60,000, say: “Senator Ron Wyden would tax the health care benefits we get at work, as if they were income. Taxing health benefits? That doesn’t make sense.”
The advertisements were bought by the National Education Association, with help from the United Food and Commercial Workers and the American Federation of State, County and Municipal Employees.
Health insurance and health benefits provided by employers to their employees are not counted as income and are not subject to income or payroll taxes. Mr. Baucus and many economists say the tax break is inequitable because its benefits go disproportionately to people with higher incomes.
“It’s too regressive,” said Mr. Baucus, the committee chairman. “It just skews the system.”
Mr. Baucus and Mr. Wyden have suggested that employer-provided health benefits above a certain value could be included in taxable income.
The proposed tax is among two dozen options considered Wednesday by members of the Senate Finance Committee as they looked for ways to pay for coverage of the uninsured. Almost every option faces opposition from some quarters.
