Tax Lawyer's Blog

Patrica Murphy of Politics Daily says in Cadillac Tax in Health Plan Would Hit Middle Class Hard that the tax on so-called Cadillac insurance plans is really a tax on the middle class:

When President Obama first raised the idea of taxing insurance companies this summer, he framed it as one way to get Wall Street executives to pay their fair share. Obama told PBS’ Jim Lehrerhe wanted to target “super, gold-plated Cadillac plans.” Days later, Obama’s senior adviser David Axelrod told The New York Times the administration wanted to tax benefits “like the ones that the executives at Goldman Sachs have, the $40,000 policies.”

At the time, Obama said he did not want the tax to hit middle-class families, but when the bill emerged from the Senate Finance Committee in September, it proposed charging insurance companies and a 40 percent excise tax for high-dollar — but not exactly gold-plated — plans.

The bill now calls for the tax to apply to plans exceeding $8,500 for individuals and $23,000 for families, for the cost of combining health savings accounts, medical, prescription drugs, dental, vision, etc. The tax is charged to insurance companies, but it is widely assumed they would pass it on to employers.

Is there anyone left in America who is surprised when the President and Congress’ propose indirect tax hikes on the middle-class?

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