Union targets Baucus over health taxes

Senate Finance Committee Chairman Max Baucus (D-Mont.) continues to catch flak from organized labor for considering new taxes on workplace health benefits.

The Laborers International Union of North America (LiUNA) is pushing its members to contact Baucus, one of the Senate’s leading authors of healthcare reform legislation, to protest the proposal, which would subject the value of some workers’ health insurance to income taxes for the first time. According to a spokesman for the union, they expect the senator to get 20,000 calls and emails.

Labor unions are fit to be tied about these taxes. Big business is, too, but Democrats are more worried about aggravating their allies in organized labor.

“Senators Baucus and [Kent] Conrad [D-N.D.] are stuck in the beltway if they think they can pass healthcare reform on the backs of working people. The idea of taxing healthcare benefits is dead on arrival. It will be impossible to pass healthcare reform without the support of working people and the labor movement. LIUNA members are absolutely opposed to having their benefits taxed, LiUNA spokesman Jacob Hay said in a statement.

Liberal groups have gone after Baucus on other issues, as well, especially to pressure him to include a strong government-run public option for health coverage in his legislation.

The notion has supporters and detractors among Democrats and Republicans. President Obama campaigned against the idea of taxing health benefits but has signaled some flexibility on the issue as it has become clear Congress might actually pass a healthcare reform bill with the policy in it.

Baucus and other lawmakers support levying these taxes for two main reasons. First, the taxes would generate tons of money to help pay for a healthcare reform bill that will cost at least $1 trillion dollars. Second, many academics argue that enabling tax-free health insurance encourages companies and workers to buy too much insurance and consume too much medical services, thereby driving up costs for the whole healthcare system.

Opponents predict that taxes on health benefits will make premiums too expensive for workers.

Baucus isn’t the first Democrat to suffer an attack from a union. The National Education Association, the American Federation of State, County and Municipal Employees and the United Food and Commercial Workers ran radio ads last month criticizing Sen. Ron Wyden (Ore.) for his ardent support of getting rid of the current tax exclusion for health benefits and replacing it with a fixed credit. Wyden responded by firing back with ads of his own.

– Jeffrey Young