Thursday, January 7, 2010

Obama's Excise Tax Betrayal

The excise tax is billed as a tax on the health care plans of high income individuals, when in reality it will be a sizable tax increase for a large number of middle class Americans. The worst part, as Bob Herbert explains, that the real design isn't to raise money off the tax, but to cut health care coverage:
The tax would kick in on plans exceeding $23,000 annually for family coverage and $8,500 for individuals, starting in 2013. In the first year it would affect relatively few people in the middle class. But because of the steadily rising costs of health care in the U.S., more and more plans would reach the taxation threshold each year.

Within three years of its implementation, according to the Congressional Budget Office, the tax would apply to nearly 20 percent of all workers with employer-provided health coverage in the country, affecting some 31 million people. Within six years, according to Congress's Joint Committee on Taxation, the tax would reach a fifth of all households earning between $50,000 and $75,000 annually. Those families can hardly be considered very wealthy.

Proponents say the tax will raise nearly $150 billion over 10 years, but there's a catch. It's not expected to raise this money directly. The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.
One fifth of middle class households, those who have employer based health care. Who are these people?

By and large those with employer based health care are union members, the same people responsible for electing Barack Obama president.

They supported Barack Obama because of speeches like this:

Union members all over the country (such as myself) mobilized using that line of attack to convince their members who were unsure about voting for Barack Obama that it was the right thing to do. No one put their ass on the line more than Richard Trumka, whose speech about Obama and Race might have made a bigger impact at swaying the demographic of white middle class voters than any other during the campaign.

In return for all that hard work electing him president, President Obama decides to make everyone who campaigned for him on that line of attack to be a liar:
WASHINGTON — President Barack Obama signaled to House Democratic leaders Wednesday that they'll have to drop their opposition to taxing high-end health insurance plans to pay for health coverage for millions of uninsured Americans.

In a meeting at the White House, Obama expressed his preference for the insurance tax contained in the Senate's health overhaul bill, but largely opposed by House Democrats and organized labor, Democratic aides said. The aides spoke on condition of anonymity because the meeting was private.
We voted and worked our asses off for Barack Obama's policies, and instead we got Joe Lieberman's health care plan, payed for with John McCain's tax on the middle class.

This fight isn't over yet, and organized labor still has its biggest card to play. Opposing this bill would be a real act of courage, and I hope that the new AFLCIO President Richard Trumka has what it takes to do what's right. Unless labor stands up to this type of betrayal, there's no reason President Obama or any other politician won't repeat this cycle again and again.


  1. Maybe the nation owes Joe Wilson an apology.

  2. on second thought fuck that. that guy is a douche.

  3. True. Joe Wilson is a douche.