One of the most contentious proposals (just barely) floating around in the health care “reform” debate is whether to tax as income the value of an employee’s health coverage above some amount. Some argue that “Cadillac” health insurance plans for which employers pay, for example over $12,000 per year, should be taxable income to the employee on the amount over some threshold. For example, if the threshold were $10,000 and the coverage cost the employer $12,000, then the employee would pay income tax on that excess $2,000.

During the presidential campaign, John McCain discussed that as a possibility only to be attacked successfully by Barack Obama.

The reactions by Republican Senator Charles Grassley (Iowa) and Democratic Senator Chris Dodd (Connecticut) were interesting, with Grassley saying that if Obama decides he wants to go down that road, then it will take his presidential leadership to make the move bipartisan, at least implying that there is more GOP support for the idea than just from McCain.

And Chris Dodd, a far-left Democrat, said “The idea of talking about taxing benefits at a time people are overwhelmed, I think, is a very bad idea.”

Yes, you read that right: The idea of a new tax is being semi-supported or at least not ruled out by a Republican and slammed by a leading ultra-liberal Democrat.

If you’ve been paying attention in recent months to the true goal of every Administration and Democratic congressional move, it shouldn’t be hard to figure out why these reactions are counter to what one might usually expect to hear about a tax increase.

Any guesses out there?

OK, I’ll tell you: The majority of people who get these “gold-plated” or “Cadillac” health insurance plans are union workers and union bosses. Since the proposed tax would hit unions fairly hard, Democrats strongly oppose it and Republicans are probably roughly neutral on it, though you’d think they could get away with being for or against it with just a little explanation.

Personally, I don’t really care about the issue very much the way it’s being discussed. But if it were up to me, I would oppose taxing health care benefits even if it would hurt the unions (which is generally something I’d take any opportunity to do). If passed, then it’s just a matter of Congress re-drawing a line – something much easier than drawing a line the first time – to suddenly start taxing health insurance as income at lower and lower threshold levels as part of a plan to destroy private health insurance, something which nobody should doubt is the true goal of Barack Obama, Ted Kennedy, and Chris Dodd.

[On a closing note, I encourage you to keep in mind the “how does this affect unions” angle on EVERYTHING you see coming from Democrats. For example, my view is that socialized medicine is being pushed in large part to relieve the unions of having to spend the billions of dollars they’ve saved for retiree health insurance costs and free up that money to spend on political activities, i.e. electing Democrats.]