Obama Reported Ready to Back Health Coverage Taxes

June 10, 2009 (PLANSPONSOR.com) - The Washington Post is reporting that President Obama could execute a dramatic policy reversal from the presidential campaign and come out in favor of a limited taxation of historically tax-free employer-sponsored health benefits.

The Post politics blog, quoting a Congressional Quarterly report, said the President is expected to begin publicly calling for the taxation starting with a series of campaign-style appearances across the country, beginning with a town hall meeting Thursday in Green Bay, Wisconsin, and in private meetings with lawmakers.

Obama strongly criticized rival Senator John McCain during the campaign for McCain’s proposal to tax such benefits.

The Post report said a Congressional estimate predicted health coverage taxation would generate $418.5 billion over 10 years.     The $418.5 billion figure comes from taxing workers for the value of benefits above the current cost of the standard health plan for federal employeesthen indexed annually for per-capita medical cost inflation. Applying that tax cap only to individuals making over $100,000 or couples making over $200,000 would generate $162 billion, the report said.

According to the news report, the cornerstone of the   White House argument will be that overall savings working Americans obtain from a revamped health system will trump concerns about paying taxes on health benefits.