I was surprised to discover that Robert B. Helms of the American Enterprise Institute has been pushing for a tax on stronger health benefit plans since at least 2005. (Probably since 2004, but I can't seem to find the full text of that presentation. Actually, most likely since the mid-1980's, but for that, read down.)
AEI is recycling almost exactly the same argument now. In answer to a comment of mine on the diary about how the Reagan Administration first tried for this tax, someone suggested this be diaried separately so here goes.
Most people here know AEI, but for others, Sourcewatch describes it as
an extremely influential, pro-business, conservative think tank founded in 1943 by Lewis H. Brown. It promotes the advancement of free enterprise capitalism, and succeeds in placing its people in influential governmental positions. It is the center base for many neo-conservatives.
From the AEI bio on Robert B. Helms (emphasis added):
Member, Health and Human Services Medicaid Commission, 2005-2006
Executive Director, American Pharmaceutical Institute, 1989-90
Assistant Secretary for Planning and Evaluation, 1984-89
Deputy Assistant Secretary, 1981-84, U.S. Department of Health and Human Services
Director, Center for Health Policy Research, AEI, 1974-81
Professor, Loyola College, 1971-73
I.e., he seems to have served exclusively in Republican administrations and other than that, followed the revolving door into the medical industry for a short while. Here's some of what Helms had to say in 2005:
Changing the effects of the present tax exclusion can take two forms: eliminating the tax exclusion, or placing a limit on what can be excluded from the employee’s taxable income. Most proposals are of the latter type, commonly referred to as a tax cap. For example, if the cap were placed at $6,000 per year, an employer providing a policy costing $8,000 would have to report $2,000 as taxable income for the employee....
A tax cap proposal was developed at the Department of Health and Human Services during the Reagan administration and was presented as a legislative proposal in fiscal years 1984 and 1985....
That is, while Helms himself was serving as HHS Assistant Secretary for Planning and Evaluation.
After a study of what firms were paying for health insurance, the proposed tax cap was set at the upper range of monthly premiums paid by employers. The cap was to have been indexed to general inflation, which would have made the cap more binding over time as the cost of health insurance outpaced the general level of prices.
A variation of the tax cap proposal is to phase in the cap over several years so that there is more time to adjust to the change.
Bingo.
This tax is supposed to start small, affecting relatively few people (like we're being told today), and eventually sweep in all employer-paid health benefits.
Now why would this be good public policy? According to Helms in 1985 2005,
Capping the tax exclusion for employer-sponsored health insurance would encourage employers to intensify their efforts to control the costs of their plans, but always keeping in mind the role that health benefits play in their competitive labor markets.
Hm, meaning? Given a choice, people naturally prefer to work for companies that have especially strong benefit programs (like unionized companies, maybe)? So this will level the playing field some for companies that don't choose to offer strong health benefits? But I leave others to make their own translation.
What we can figure for sure, this new tax would be handing the Right something it's been pushing for a long time without the least prior enthusiasm from the Democratic side, and how could that be a good thing?