Big Labor Slams Obamacare’s ‘Regressive’ Tax

40% tax rate to hit workers, employers, unions by 2018 without action

July 29, 2015

Some of the most powerful labor unions in the country are calling on the White House to approve the repeal of an Obamacare tax on employer-sponsored health plans that could lead to benefit cuts.

Terry O’Sullivan, president of the Laborers’ International Union, on Tuesday afternoon joined labor and business interest groups as part of the Alliance to Fight the 40 aimed at dismantling Obamacare’s so-called Cadillac insurance tax. The 'Cadillac" label applied by Obamacare defenders is inaccurate, according to the union bigwig. He referred to the tax as 'despicable," 'regressive," 'unwise, unjust, and unfair" during a three-minute opening statement at an Alliance teleconference.

'This is not a tax on high end health plans. This tax will hit … middle and working class families," he said. 'This tax is a kick in the face to every hardworking, blue collar, and middle class family in the country."

O’Sullivan has been an opponent of certain aspects of Obamacare since it passed. He told the 2013 AFL-CIO convention that 'if the Affordable Care Act is not fixed and it destroys the health and welfare funds that we have all fought for and stand for, then I believe it needs to be repealed." He stuck by that statement on Tuesday.

'Yes, but I think it can be fixed," he said in response to a Washington Free Beacon inquiry about repealing the massive healthcare overhaul. 'We’ve been frustrated by this entire process and its impact on the hardworking Americans that we represent."

The 40 percent tax rate on health plans that cost $10,200 on individuals and $27,000 for families, was supposed to go into effect in 2013, but a bipartisan group of lawmakers pushed the implementation back to 2018.

There are now two bills in the House to repeal the tax to prevent employers from slashing benefits in order to fall under the threshold.

'Employers … are all restructuring plans, cutting benefits to avoid the tax," said Rep. Frank Guinta (R., N.H.), sponsor of one of the bills.

He was joined by Rep. Joe Courtney (D., Conn.), who is sponsoring a separate piece of legislation to roll back the mandatory tax.

'2018 is now if you’re negotiating a multi-year labor contract," Courtney said. 'Many supporters of the Affordable Care Act … understand that this is not an integral part of the law."

Courtney and other Democratic allies in Congress are now petitioning the White House to back the bid for repeal. He said they have met with cabinet-level officials, but have run into roadblocks because many new appointees do not have the same firsthand knowledge as White House officials who presided over the passage and writing of Obamacare when it passed in his first term.

'It was pretty obvious that some of them needed to bone up a little on this issue," Courtney said.

Donald 'D." Taylor head of the hotel workers union UNITE HERE, said that Congress must act quickly if it is to reverse the trend of slashed benefits.

'This has to be a pretty bad deal if you bring business and labor together in a way that we’re usually at odds," he said. 'A 40 percent tax on a housekeeper is a higher tax than the richest billionaire [pays] on income."