Hatch and Grassley: Administration's Guidance on Cadillac Tax Caves to Unions

Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Senate Judiciary Chairman Chuck Grassley (R-Iowa) today sent a letter to Treasury Secretary Jack Lew questioning the Administration's recent guidance on Obamacare's "Cadillac plan tax". The tax is a 40 percent non-deductible excise tax placed on certain healthcare plans under the President's health care law. The guidance, Notice 2015-16, seeks comment regarding a special allowance for a number of occupation categories, many of which are affiliated with organized labor.

"The cure for this mistake is not a carve out for the President's political supporters but a repeal that benefits all Americans, including the countless teachers, nurses, and other professionals that will be subject to this tax over time. The structure of this tax creates a draconian policy that will penalize countless Americans with a 40 percent excise tax, whether they are a shop foreman, a factory manager, or an office secretary. Now is not the time to divide workers against one another, creating different rules to protect favored constituencies from a poorly designed, drafted, and implemented law. Instead, we urge you to work with Congress to relieve all Americans from the burdens of the health care," the chairmen wrote.

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