TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, December 29, 2009

NY Times: Senate Bill's Tax on Cadillac Health Plans Is 'Dishonest'

New York Times op-ed, A Less Than Honest Policy, by Bob Herbert:

There is a middle-class tax time bomb ticking in the Senate’s version of President Obama’s effort to reform health care.

The bill that passed the Senate with such fanfare on Christmas Eve would impose a confiscatory 40 percent excise tax on so-called Cadillac health plans, which are popularly viewed as over-the-top plans held only by the very wealthy. In fact, it’s a tax that in a few years will hammer millions of middle-class policyholders, forcing them to scale back their access to medical care.

Which is exactly what the tax is designed to do. ...

The tax on health benefits is being sold to the public dishonestly as something that will affect only the rich, and it makes a mockery of President Obama’s repeated pledge that if you like the health coverage you have now, you can keep it.

Those who believe this is a good idea should at least have the courage to be straight about it with the American people. 

William A. Jacobson (Cornell) notes that "Herbert should have just said, 'You lie!'"  (Hat Tip: Ann Murphy.)

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It's not a lie, though. It can be patched annually in the same way (and just as easily) as the AMT.

As abysmal as HCR is in its current form, Congress has forever to make it worse.

Posted by: s | Dec 29, 2009 11:15:56 AM

it is indexed for inflation

Posted by: r. | Dec 29, 2009 5:26:12 PM