Wednesday, January 13, 2010

First Nebraska and Now Unions?

What's the latest pork provision allegedly being stuffed into the health care boondoggle? Like the free ride given to Nebraska to entice Ben Nelson's vote in the Senate, the unions are now allegedly being exempted from the excise tax the Senate has proscribed for those Americans with "Cadillac" heath care plans worth more than $8500 annually for individuals and $23,000 for families. What precipitated this? Union leaders visited the White House Monday to whine to the President, and to his credit, he resisted the pressure, which led the unions to make a public statement of dissent regarding this provision in the draft bill. The result? Less than 24 hours after voicing their disapproval, they're getting a free ride on the rest of us, just like the Nebraskans. What does this mean to you? Well, if you're a non-union employee with a "Cadillac" health care plan, you'll pay a 40 percent excise tax on your health benefits when you file your tax return. FORTY PERCENT! This means that if your plan is worth more than $8500 (for an individual) or $23,000 (for a family) annually, which encompasses most plans sponsored by employers, you will pay a 40% tax on the overage. Meanwhile, a union worker with the identical plan will be exempt from the tax simply because his organization funnels millions of dollars to Democrats. And what's worse? The tax will fall most heavily on the middle class, as even Pelosi noted, which will cause employees to insist on less expensive plans from their employers to allow them to avoid the tax at the expense of receiving lesser health care. Pelosi and the House favor additional taxing on couples earning more than $1M, but the Senate made it clear that this is not acceptable and they intend to recover additional revenue by instituting a 0.9% increase in the Medicare payroll tax. What does this mean to you? If you earn at least $200,000 (for an individual) and at least $250,000 (for joint filers), you will pay another 1% in taxes on top of the excise tax.

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