Rich Lowery has a good op-ed describing how the unions have seen the light about tax policy, and recognize that it’s people, not corporations, that pay taxes. He writes:
The unions, which make it a point to negotiate generous insurance plans with their employers (to the point of bankrupting them), were chagrined to learn that for purposes of this tax, they’re among the rich. They howled in terms that could have been drawn from Henry Hazlitt’s free-market classic, Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics.
The excise tax is supposed to be paid by evil insurers and employers. Except in this one case affecting their self-interest directly, the unions see through the fiction and understand that the tax will trickle down onto them. How disorienting to hear unions implicitly recognize that corporations ultimately don’t pay taxes, their customers and employees do.
“While the excise tax is slated to be imposed on the insurers on so-called high cost plans, the tax will be passed on to enrollees in the form of higher premiums, co-pays or reduced benefits,” a coalition of public-employee unions wrote congressional leaders. “Characterizing this tax proposal as a ‘Cadillac tax’ is a misnomer. It hits the average blue collar and white collar employee.”
The unions also bristled at a fairly typical trick of liberal taxation – bracket creep. The Cadillac tax affects few people when it begins in 2013. Since it’s not indexed to account for the ever-rising expense of health care, though, it will catch more and more people over time.
So what do the unions do with this new found wisdom? They lobby for a carve out to protect their people from the distortionary taxes. In this era of political graft, it’s to be expected. But let’s hope the American people listen to the union’s new logic and start demanding a carve out of their own.