Jan 12, 2010

Good News for the Middle Class? Potential Movement on the Unfair Insurance Tax

Potential good news for union members: it looks like President Obama and members of Congress may be willing to negotiate so that fewer people would be affected by the so-called "Cadillac Plan" tax, including fewer union members. AP reports that although many ideas are under discussion, Obama:
is open to adjusting the tax so it would affect fewer people. There has been discussion of raising the threshold for the tax from $23,000 to $25,000 or higher. It has already been raised for first responders and workers in certain high-risk fields, and the levy could be softened for more unionized professions.

The foregone revenue from tweaking the insurance tax would be made up from the investment accounts of upper-income earners. (Pensions and retirement accounts would not be taxed.) The Senate bill already calls for raising the Medicare payroll tax on wages to 2.35 percent for couples making over $250,000 and individuals making more than $200,000.

Union leaders, including UFCW President Joe Hansen, met with President Obama yesterday to discuss the tax and its negative impacts on middle-class families and union members. And while it's still too early to say if enough progress has been or will be made, the negotiations are certainly a step in the right direction.

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