Jon Gruber in sixth video: 'Mislabeling' helped us get rid of tax breaks

The issue at hand in this sixth video is known as the “Cadillac tax,” which was represented as a tax on employers’ expensive health insurance plans. While employers do not currently have to pay taxes on health insurance plans they provide employees, starting in 2018, companies that provide health insurance that costs more than $10,200 for an individual or $27,500 for a family will have to pay a 40 percent tax.

“Economists have called for 40 years to get rid of the regressive, inefficient and expensive tax subsidy provided for employer provider health insurance,” Gruber said at the Pioneer Institute for public policy research in Boston. The subsidy is “terrible policy,” Gruber said.

“It turns out politically it’s really hard to get rid of,” Gruber said. “And the only way we could get rid of it was first by mislabeling it, calling it a tax on insurance plans rather than a tax on people when we all know it’s a tax on people who hold those insurance plans.”