Actually, what really set off our alarms is that Baucus is likely to make an exception for employer-provided benefits that exist as a result of agreements with unions. While there is certainly a logic to this exception, we can't help but worry that the practical effect of this would be to continue to allow big corporations--which, after all, are much more likely to have unionized workforces--to offer generous tax-free benefits.
So we're of two minds. The report we discussed last week is clear: effective health-care reform will, over several years/a decade/several decades, save small businesses hundreds of billions of dollars (and, if costs can be brought under control, it will save the American people trillions). However, in the short-term, such a plan would require many new billions in funding; and, at a time of heavy government borrowing and the need for continued government spending, some sort of tax does seem to be the logical way to raise those funds.
In fact, the tax on employer-provided benefits enjoys intellectually honest support across the political spectrum: here, for example, is liberal ex-Secretary of Labor Robert Reich advocating it; and, as he mentions, the idea was supported during the presidential campaign by none other than Republican nominee Sen. John McCain (R-Az.). Current budget director Peter Orszag has said the Obama administration is open to the tax.
A tax on employer-provided benefits that are over a certain level does not strike us as a dealbreaker, in other words. However, its inclusion would make it all the more important that any final plan address and help to rectify the unique disadvantages faced by small businesses in any health-care system that continues to be dominated by employer-provided insurance.
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