Workers' Health Benefits Eyed for Taxation

The Washington Post reports:

With President Obama's plan to tax the rich to pay for health care facing deep skepticism on Capitol Hill, key lawmakers are pressing a different way to raise money: taxing the health benefits workers receive from their employers.

Since companies began offering group health insurance on a large scale during World War II, the value of that benefit has never been counted as income, reducing workers' taxable earnings by an average of $9,000 a year for family coverage.

In recent weeks, however, Sen. Max Baucus (D-Mont.), chairman of the tax-writing Finance Committee, has repeatedly advocated changing tax laws to include employer benefits, arguing that it makes sense to fund the health-care changes by sucking cash out of the existing system. Meanwhile, 13 other senators -- from both sides of the aisle -- have signed on to a plan for universal coverage that includes a tax on employer-provided benefits.

You thought Obama and the Democrats were only going to tax the upper 5%? You guessed wrong.