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Lobbyists, lawmakers debate wisdom of taxing health care benefits — MedCity morning read, May 21, 2009

10:20 am by | 0 Comments

Sen. Max Baucus, chairman, Senate Finance Committee

Sen. Max Baucus, chairman, Senate Finance Committee

WASHINGTON, D.C. — Lawmakers and lobbyists mobilized in Washington on Wednesday to nip in the bud a congressional proposal to tax employer-paid health care benefits, according to the New York Times.

Labor unions attacked a proposal by Senators Ron Wyden of Oregon and Max Baucus of Montana, both Democrats, to consider changing the tax treatment for employer-paid health care benefits, the Times said. Most workers under 65 years old still get their health benefits from their employers.

Under the proposal, employers would lose their income and payroll tax exemptions for amounts they pay for worker health benefits — workers would not be taxed on their benefits. Sen. Baucus and many economists say the employer tax exemptions are unfair because they goes mostly to rich people (employers).

The proposed tax was among about a dozen proposals considered by the Senate Finance Committee on Wednesday to pay for coverage of Americans who have no  health insurance, the Times said.

On the other side of the aisle, Republicans on Wednesday mobilized against Democrats’ plans to overhaul the health care system, introducing legislation that would give Americans tax credits to pay for health insurance, according to the Wall Street Journal (subscription required).

The plan offers a glimpse at how the GOP might oppose Democrats’ efforts to create a public health plan and to require companies to pay for health insurance for workers. Republican lawmakers say such measures would add layers of bureaucracy to the nation’s health system and stifle job growth, the Journal said.

Given the Democrats’ control of Congress, the Republicans’ plan has little chance of success, according to the Journal.

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Mary Vanac

By Mary Vanac

Mary Vanac is a co-founder of MedCity News.
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