The 419-6 vote delivered a victory to labor unions and employers that teamed up against the tax. On the losing side: deficit hawks and health economists who worry about distortions caused by favorable tax treatment of employer-sponsored insurance.
The tax is a 40% levy on health insurance above certain thresholds—about $11,200 for individuals and $30,100 for families, starting in 2022. It counters the tax law that says employees must pay individual income taxes on wages but not on the value of their health policies.
Read More: Wallstreet Journal on “Cadillac Tax”