14 Mar Health Care Plan ‘Cadillac Tax’ Will Affect Mostly Middle Class Employees
MedicalResearch.com Interview with:
Steffie Woolhandler MD, MPH, FACP and
David U. Himmelstein MD, FACP
CUNY School of Public Health at Hunter College
MedicalResearch.com: What is the background for this study? What are the main findings?
Response: The Cadillac Tax aims to eventually eliminate tax subsides to employer-sponsored coverage. When an employer provides health benefits to an employee, the employee pays no income or FICA tax on the value of those benefits, although the benefits are obviously part of the employee’s compensation. In other words, the taxpayers are currently picking up part of the employee’s health insurance costs.
Economists and politicians have been justifying the ACA’s Cadillac Tax by portraying it as a “Robin Hood” tax that would take from the rich and give to the poor. That view of the Cadillac Tax is untrue. We found that the main beneficiaries of the current tax subsidies to employer sponsored coverage are middle class families (defined by a family income between $39,000 and $100,000 in 2009 dollars) for whom the subsidies boost their effective income by about 5%. These middle class people are the ones who would be most harmed when the Cadillac Tax kicks-in and curtails the current tax subsidies.
MedicalResearch.com: What should clinicians and patients take away from your report?
Response: The US needs a single payer system to improve the fairness of health financing and the health of the American people. Until we get there, patchwork financing reforms like the Cadillac Tax can make matters worse.
MedicalResearch.com: What recommendations do you have for future research as a result of this study?
Response: We need to be researching and implementing health policies that make the distribution of health care more equal, and tax policies that fund health care by taxing the wealthy. The Cadillac tax is a step in the wrong direction.
MedicalResearch.com: Thank you for your contribution to the MedicalResearch.com community.
Citation:
The “Cadillac Tax” on Health Benefits in the United States Will Hit the Middle Class Hardest
Refuting the Myth That Health Benefit Tax Subsidies Are Regressive
By Steffie Woolhandler, David U. Himmelstein
International Journal of Health Services, Online March 9, 2016
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More Medical Research Interviews on MedicalResearch.com
Dr. Steffie Woolhandler and David U. Himmelstein MD, FACP (2016). Health Care Plan ‘Cadillac Tax’ Will Affect Mostly Middle Class Employees MedicalResearch.com
Last Updated on March 14, 2016 by Marie Benz MD FAAD