LETTER: End of the cash cow

I would like to respond to the misleading "costs" claimed by Caterpillar, AT&T and other large corporations in response to the health care reform recently passed. Their loss is actually taxpayer money.
Commentary
Apr 14, 2010

 

I would like to respond to the misleading "costs" claimed by Caterpillar, AT&T and other large corporations in response to the health care reform recently passed. Their loss is actually taxpayer money.

When prescription drug coverage was enacted in 2003, the government was concerned with the Medicare Part D being overwhelmed. Their response was to offer subsidies, around $1,300 per year, per retiree, to companies who continued with "private" prescription coverage. These subsidies were not only nontaxable, they were deductible! So not only did companies get free money from the government to pay for this coverage, they got to deduct it as an expense to lower their taxes! The taxpayer paid, and the companies got to double-dip.

The health care reform removes the double-dip! These companies will still receive nontaxable subsidies for retiree prescription costs, but they will no longer be able to deduct their free government subsidy as a business expense. The "losses" they report are taxpayer money.

These corporations are simply resorting to scare tactics because they're furious about losing part of the cash cow they've enjoyed for the last seven years. I think most taxpayers would say it's about time.

Stacey Tillman

Sandusky