President Barack Obama, who has been looking for good ways to help fund an expansion in health care, said he would consider taxing employer-paid benefits. Check out the following article on the story courtesy of the Washington Post.
President Obama, in a pivot from some of his harshest campaign rhetoric, told Democratic senators yesterday that he is willing to consider taxing employer-sponsored health benefits to help pay for a broad expansion of coverage.
Senate Finance Committee Chairman Max Baucus (D-Mont.) said Obama expressed a willingness to consider changing the existing tax exclusion. 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.
"Yeah, it's something that he might consider," Baucus told reporters after the meeting between Obama and Democratic lawmakers. "That was discussed. It's on the table." Obama had summoned about two dozen senators to the White House to keep up the pressure to enact a comprehensive health-care overhaul this year.
White House officials moved quickly to clarify that taxing the health insurance provided by businesses is not Obama's first choice, but aides refused to rule out the possibility.
"The president made it clear during the campaign that he has serious concerns about taxing health-care benefits, and he has introduced his own revenue proposal, which he reiterated in today's meeting," spokesman Reid Cherlin said.
Obama instead urged senators to reconsider his proposal, which would raise federal revenue by reducing itemized deductions such as charitable contributions and mortgage payments for the wealthiest Americans, according to one adviser in the meeting. Obama included that idea in his budget, reporting that it would raise $317 billion over 10 years, a sizable "down payment" on the cost of health-care reform. But Congress immediately labeled the proposal a non-starter.
Private-sector businesses spend about $518 billion a year on their workers' health insurance, benefits that are not taxed. If workers had to pay taxes on their health coverage, it would raise $246 billion in revenue each year, according to the congressional Joint Committee on Taxation.
Tax treatment of employer-sponsored health care cuts across party lines: Prominent Republicans such as Sen. Judd Gregg (N.H.) support imposing a tax on certain health plans, while Democrats such as Sen. Sherrod Brown (Ohio) say that a tax would unfairly hurt middle-class workers with good benefits.
