Richard S. wrote:You're missing the entire point, I'll go over it again as this doesn't seem to be seeking in. For arguments sake and to keep it simple I'll use nice round numbers so it's easy to understand. The coverage AT&T is providing cost $2K and so does the equivalent Medicare D. The subsidy covers let's say $500 so the corporation is now paying $1500, the tax break takes what amounts to another $500.
Total cost to AT&T is $1K, the total cost to the government is $1K instead of paying the $2K for medicare. This is the key as the US taxpayer is netting $1K in savings.
By removing the tax break the incentive for the corporation to continue coverage is much smaller, the US taxpayer will now pick up the entire $2K tab for those that drop the coverage.
Here's simple question, what benefit does AT&T derive from keeping these people covered with or without the tax break?
OK, this is a "retirement benefit," right? So it's supposed to be funded by monies put away by the employer for the benefit of the employee, presumably protected by ERISA. In other words, the employer promised, as part of its retirement benefit package for its workers, to pay their medical coverage in retirement. Are we good that far?
The employer has always been able to deduct that expense, as all healthcare coverage costs have been since WWII. But somewhere along the way, the employer got another 28% tax credit
(which is the same as a deduction for those in the 28% tax bracket). I don't know when or why that happened but that's what's been taken back by the HCR law.
Put another way, not only has the cost been deductible but the government has been paying an additional 28% of the employer's cost
of the healthcare it promised to its retirees. I don't recall agreeing to that.
Now, if the employer chooses to threaten to discontinue the retirement benefits it promised its workers, my view is that would be a breach of the employer's promise to provide retirement benefits under ERISA. Whether that's true or not, we as taxpayers are not obliged to pay the same benefit to the retirees as their employer promised before it broke, or threatened to break, that promise.
So no, I don't see it as paying for half a loaf and getting more. To the contrary, if the employer welches on its promise to pay a retirement benefit that its workers earned during their careers, it should be responsible to them for it, and I presume is under ERISA. In this case, AT&T made the promise, it can't be permitted to walk away from the tab for the cost of that promise any more than you or I can be permitted to walk away from the tab for the meal we ordered in a restaurant.