Workers hit tax on ‘Cadillac’ health plans,  ‘You are taxing Chevrolets!’

Workers, union members and lawmakers rallied in the nation’s capital yesterday in support of health care reform but against funding it with a new tax on health benefits.

The demonstration was in response to findings in a report commissioned by the Communications Workers of America that the tax on workers’ health insurance included in the latest Senate compromise plan would hit 30 million families in the first five years of the plan.

CWA members from all over the country lobbied their representatives to vote against the tax and to vote for the House-backed surcharges on the rich.

We’re not rich,” said CWA Local 2204 member Valerie Castle-Stanley, who works for AT&T in Norton Va. “We’re average middle class Americans. We need quality health care. There’s no question that companies will look for ways to pass on this tax. They’re sure not going to pay for it. That means my benefits will be cut and my costs will go up. I support health care reform but I can’t afford this tax.”

Sen. Bernie Sanders, I-Vt., who has introduced an amendment to remove a benefits tax from the Senate bill, and Rep. Joe Courtney, D-Conn., were joined by workers from across the country who stand to suffer if the new benefits tax becomes law.

Sanders warned that “some of my colleagues would have you believe the tax only falls on ‘Cadillac’ plans, but the truth is that the plans this bill will tax are more like Chevrolets.”

“Taxing benefits would hurt all workers. We know that one in five workers would be hurt by this tax and that’s a lot more people than just union members,” said AFL-CIO Executive Vice President Arlene Holt Baker, who was at the rally.

The CWA, meanwhile, also released the results of a poll yesterday that shows 70 percent of likely voters think a tax on health care benefits is the wrong way to pay for health care reform. Some 55 percent favor paying for health care reform as it is in the bill passed by the House – with a surtax on the very wealthiest households.

The Senate’s compromise health care bill would set a tax on health plans worth more than $8,500 per year for individuals and $23,000 per year for families. For those in high-risk occupations, for retirees 55 or older and for residents in the 17 highest-cost states, the bill would tax plans worth more than $9,850 for individuals and $26,000 for families.

Labor says the modest tax on the richest, who it notes benefited disproportionately from the Bush tax cuts and the unequal economy of recent years, is much fairer than hitting workers struggling in today’s economy.

The CWA and a number of other unions are also saying that the Senate plan lets some of the nation’s biggest employers, ones that provide little or no benefits, off the hook while it taxes employers who actually are providing decent benefits.

A full-page union ad appearing in newspapers all over the country declares that Wal-Mart, the world’s largest private employer, “notorious for its low wages, rabid anti-unionism and high-cost health care, would be virtually unaffected by the Senate’s health care revision.” The ad, co-signed by the United Food and Commercial Workers, the Teamsters, the Steelworkers the Farm Workers and the Auto Workers, says, “The Senate wants to make the Wal-Mart model into law.”

James Hoffa, president of the Teamsters, said, “Millions of Americans will pay thousands of dollars more in taxes under the Senate’s proposal to finance health reform. Millions more will have their benefits cut, even if they don’t belong to a union.

Hoffa cited a Mercer Consulting survey showing two-thirds of firms would slash benefits instead of paying the tax and another 23 percent would load it onto their workers.

Photo: Sen. Bernie Sanders. / CC BY 2.0



John Wojcik
John Wojcik

John Wojcik is Editor-in-Chief of People's World. He joined the staff as Labor Editor in May 2007 after working as a union meat cutter in northern New Jersey. There, he served as a shop steward and a member of a UFCW contract negotiating committee. In the 1970s and '80s, he was a political action reporter for the Daily World, this newspaper's predecessor, and was active in electoral politics in Brooklyn, New York.