Prez Won't Fight Tax on Health Benefits

Plan echoes McCain proposal slammed by campaigning Obama
By Matt Cantor,  Newser User
Posted Mar 15, 2009 7:45 AM CDT
President Barack Obama speaks at the White House Forum on Health Reform in the East Room of the White House earlier this month.   (AP Photo/Charles Dharapak)
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(Newser) – Despite attacking John McCain for the idea on the campaign trail, President Obama will not oppose taxing some worker health benefits to fund health care reform, reports the New York Times reports. On the stump, Obama called a similar plan “the largest middle-class tax increase in history.” While some union leaders and firms are against the move, key legislators and economists back it.

Advisers say Obama won’t propose the tax, but if Congress does, he won’t fight it. Plan supporters say the current tax-free system boosts demand, leading to increasingly expensive insurance that drives businesses to keep wages low. Meanwhile, they say, it puts those without employer health insurance at an unfair disadvantage. Taxing employee health benefits could raise an extra $246 billion annually, the Congressional Budget Office found.