The Washington Post (10/2, Johnson) reports in its “Wonkblog” that as Democratic presidential candidates Hillary Clinton and Bernie Sanders “add to the chorus calling” for the repeal of the Affordable Care Act’s so-called Cadillac tax on high-cost health plans, “a group of 101 economists from both sides of the aisle sent a letter [PDF] to Congressional leaders Thursday making an impassioned case for the law.” The economists argue that the tax, set to go into effect in 2018, will increase wages and other benefits as employers move away from compensating workers through overly generous health plans. The Post says economists have been “have been objecting to the unlimited exclusion of health benefits from taxation for decades,” and they see the Cadillac tax as a “necessary, if unpopular, step toward controlling health care spending.”
CNBC (10/2) reports that the letter, sent to the Ways and Means and Finance committees of both chambers, “noted that the tax was included in the Affordable Care Act to address the ‘economically inefficient and regressive’ tax policy that allows the ‘unlimited exclusion of employer-financed health insurance from income and payroll taxes.’” The economists also warned that repealing the levy would add an estimated $91 billion to the deficit over the next decade.
Meanwhile, the Wall Street Journal (10/2, Armour, Radnofsky, Subscription Publication) reports that while there is significant bipartisan support for scrapping the Cadillac tax, divisions among lawmakers could hinder efforts to change or eliminate the levy. Opponents of the tax remain at odds over how to offset revenue losses if it is repealed, and some Democrats are reluctant to support a measure that could be seen as an attack on the health law.
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