Currently, workers do not pay income tax on their employer-provided health care benefits. In fact, this tax exclusion, which has been around for many decades, is the way that the federal government encourages employers to offer health care and is the foundation of the American employer-based system.

As deficit reduction talks heat up in Washington, Republicans and some Democrats are calling for “tax reform.” Tax reform is not a bad thing – it’s the way we could raise revenues from corporations and the very wealthy, for example – but reforming the tax code could put the exclusion for employer- sponsored health care in jeopardy. That’s because this tax exclusion is the single largest of the “tax expenditures” – the second largest is the one on home mortgages.

While no member of Congress has introduced legislation to change or eliminate this tax exclusion, not very many of them are willing to categorically rule it out of the debate.

Therefore, a very real threat to the tax exclusion exists and the UAW is asking members to lobby their senators and representatives to leave the longstanding exclusion for employer-sponsored health care out of any debate about tax reform.

The tax exclusion could be a prime target to generate the revenue necessary to pay for deficit reduction or may be used to pay for income tax cuts that benefit the very wealthiest Americans, and this is unacceptable.

Facts about health care benefits and taxation:

• Two-thirds of Americans with health insurance –156 million people – have employment-based insurance.

• Taxation of the value of employer-sponsored health care is a tax burden most workers simply cannot afford.

• Eliminating or reducing the exclusion for middle-class Americans would shift more cost to workers through higher deductibles, co-pays and co-insurance, and would lead some employers to drop coverage altogether.

• “Shared sacrifice” should start at the top – with higher income tax rates for the wealthy and the elimination or reduction of tax expenditures that benefit high wage earners.

Source: UAW Legislative, Governmental and International Affairs Department

UAW V-CAP checkoff: Money matters, to

The UAW cannot use union dues to support federal candidates and, in an ever-increasing number of states, any candidate for public office. Our only means of monetary support for many labor-friendly candidates is voluntary political contributions from UAW members, which are put into the International Union’s political action fund, UAW V-CAP.

The UAW’s V-CAP checkoff allows each member to make a modest contribution each month to help the union support candidates who care about American workers and their jobs. A $1 per month contribution amounts to less than a nickel a day, a $3 per month donation is only a dime a day, and so on.

If your employer does not have a checkoff mechanism in place, please contact your UAW regional office to learn how you can contribute to UAW V-CAP and help protect what we’ve negotiated at the bargaining table from being taken away in Congress.