Opposition Intensifies to Health Care Excise Tax

Resistance from union households is causing headaches for lawmakers and labor leaders who agreed to support health care reform that included a 40 percent excise tax on employer-sponsored health insurance plans.

In addition to outrage over any plan to tax their benefits, many union members question the need for such revenue producing measures, given the compromises that have reduced the size and cost of the original legislation.

The IAM Executive Council voted unanimously to oppose the excise tax proposal when it first surfaced. “Our members were against it when it was part of John McCain’s presidential campaign and we remain steadfastly opposed to this egregiously unfair tax,” said IAM President Tom Buffenbarger.

Under the modified proposal, the federal government would impose a 40 percent tax on the value of employer-sponsored health coverage that exceeded certain thresholds. Proponents of the excise tax, including the president’s Council of Economic Advisors, argue insurers would voluntarily hold down premiums to avoid the tax, while employers would pay workers more because their health insurance would cost less.