Tuesday, June 23, 2009

Unions Get a Free Pass

First the unions were given the keys to the front door of GM and Chrysler. Now it appears they will get a free pass should Congress decide to tax employer provided health insurance.


According to the WSJ, Democrats are at odds over how to fund free health care for all.

Apparently free only includes those with a union card.

Let's look at what has been considered so far as ways to fund free health care.

The cost estimates for the Democrats' health-care reform have by now hit $1.5 trillion over a decade. Goodness knows the architects of this beast -- which they hope will include a new "public option" health entitlement -- have been creative in dreaming up ways to pay for it. In recent months, the administration and Congress have floated ideas to limit tax deductions, penalize soda-pop drinking, tax alcohol, tax salty foods, further raise the price of cigarettes, tax specific companies, charge for carbon, cut Medicare payments, or even implement a national sales tax.
Entitlement. That's a word I haven't heard very often in this latest expansion of government and intrusion into private lives.

Congress wants more money and yet they have not proved to be good stewards of what we have given them in the past.

OK, given is a poor choice of words. Very few, other than VP Biden and Warren Buffet willingly give money to Washington and would give even more if asked.

For most of us, taxes are demanded and taken.

But speaking of taxes, one other revenue source would be to tax employer provided benefits, especially if those benefits are deemed to be overly rich.

In each case, Democrats have confronted the bitter reality that the proposed tax is too puny (Dr. Pepper tariffs), too doomed (cap-and-trade revenue), or too politically ugly (a sales tax). Contrast this with the tantalizing reality that requiring Americans to pay taxes on some part of the company health-care benefits they now receive for free could easily raise a half-trillion dollars over a decade. In a choice between a dozen niggling tax fights that could yield uncertain revenue, or a bigger fight over benefits taxes that could yield oodles, Mr. Baucus will take the oodles.
Oodles and oodles of taxes. That's an interesting choice of words. It conjures up visions of Scrooge McDuck wallowing in his millions (except today that would be trillions).

But for two small problems. The first is that about 99% of the Democratic Party is on record trashing the idea of taxing health benefits. Trasher-in-chief is none other than President Barack Obama, who mercilessly berated Sen. John McCain for proposing such a change during the 2008 campaign. "Apparently, Senator McCain doesn't think it's enough that your health premiums have doubled. He thinks you should have to pay taxes on them, too," ran one Obama ad. Republicans are, as you read, turning these words into crisp attack ads.

I like this author.

The Democrats' other problem is that the usual populist line won't fly. The party would like to be able to protect itself by saying that only those who now receive the most generous benefits will face taxes. Then again, the Americans who now have the Cadillacs (or, in these post-bailout-days, the Swedish sports car Koenigsegg CCXs) of health-care coverage are union workers. Union workers "would be stuck footing more of the bill than others," says Paul Fronstin, a senior research associate with the Employee Benefit Research Institute.
So asking the unions to pay more than their fair share apparently isn't . . . fair.

I just love watching the folks in Washington squirm. Makes me want to get in a comfy chair with a Coke and a bowl of popcorn.

But wait, that is a sugary drink and a salty snack. That would play right in to the money-grabbers in Congress.

No problem. I have an out.

The union carve-out is designed to allay the fears of many Democrats who remain outright hostile to a tax on health-care benefits, whether out of principle, political fear or union solidarity.
So here is my solution. Should this come to pass, I will join a union.

Popcorn anyone?
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