The election is over and Congress and the Administration are now pivoting toward the daunting task of addressing sequestration, the fiscal cliff, and overall deficit reduction strategy. Comments by House Speaker John Boehner on Wednesday suggest Congress may seek to find new revenue in the tax code without raising overall rates. Based on past bipartisan proposals for deficit reduction, ALPA is concerned that natural targets for this revenue could include imposing taxes on employer sponsored health insurance and/or decreasing the amount workers can contribute to retirement accounts utilizing pre-tax dollars.
Both health care and retirement benefits are critical to the economic security of ALPA pilots and working families everywhere. Proposals to alter them have the potential to undermine benefits that we have secured through hard fought collective bargaining agreements. For example, 100% of ALPA members are offered health insurance through their employers. If employers are suddenly required to pay taxes on this benefit, it will lead to at best higher cost sharing and out of pocket health expenses for pilots and at worst a large incentive for airlines to stop offering health benefits all together.
ALPA will continue to aggressively advocate against these misguided budget and tax policies. History should be our guide. President Reagan and Speaker of the House Tip O’Neill considered the policy of taxing employer provided health care benefits in the 1980’s. They concluded that the tax exemption for employer provided health care benefits was wise policy with broadly shared benefits for American workers.