by Roger Stark
Washington Policy Center
July 23, 2014
In 2018, taxpayers in Washington State could face a large tax increase when the Affordable Care Act’s Cadillac Tax, a 40% excise tax on some health insurance plans, begins. Since the 2008 recession, wage freezes have been common for all workers, but government employees have been more likely to receive increased compensation through expanded health benefits. The Cadillac Tax could potentially add $76 million in local taxes for 10 years beginning in 2018. As 2018 approaches, the Cadillac Tax is emerging as a significant financial burden placed by the federal government on state and local governments and will have a major impact in funding essential local services. Public employers will have only two options: either reduce health care benefits for their public workers or pass the cost of the federal tax to local taxpayers.

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