Regressive Tax

I have to admit disappointment in President Obama's support for a tax on Cadillac health plans. Why disappointed? Because the tax is a regressive tax that will effect lower paid workers with good company health benefits more than people with high paying jobs. So if this tax is passed onto us, and I am sure it will, it will constitute a tax increase that is greater in percentage in relation to income than for higher paid workers. For example:

Worker A makes 100,000 per year and has a health plan worth 10,000. This would add up to 800 in taxes based on what I have been reading on this. This would equal a % rate of 0.8. Now if worker B was making 50,000 with the same health plan their tax rate would be 1.6% for their high end health plan. Very disappointing approach. I would have preferred the house version that taxed incomes over, I believe, 500,000 dollars.

Of course there is another possibility to this potential high end tax. That is companies, especially if it is the company being taxed, water down their offered health plans so that they fall under the threshold to avoid the tax all together. Either way we lose on this one.

I still believe that the overall bill is worthy of support for all of the good it does, preexisting conditions, expanded coverage etc... but the funding provision that is in the Senate bill and is currently being supported by President Obama makes this reform a harder pill to swallow.