Labor lobbies against Senate health tax

The nation's largest labor federation announced this afternoon that it will start airing TV ads this weekend urging the Senate to jettison the current bill's main way to finance a huge expansion in coverage: a tax on the insurance plans with the most generous benefits.

While supporters say that the excise tax on insurers would not only pay for covering the uninsured but would also help drive down health care costs, labor leaders say it would be unfair to workers, who have given up pay raises in recent years in return for better health care benefits.

“Pass health care. Don’t tax benefits,” workers say in the ad, which will run in Washington starting Sunday then in key states to be announced on Monday.

The AFL-CIO, a powerful ally of President Obama and Democrats, also point to a study that says a tax on health benefits like the one included in the Senate health care bill would cause two-thirds of employers to shift the costs to workers by raising premiums and co-pays.