News Headlines Article

The healthcare reform law exposes an extraordinary tax subsidy
Los Angeles Times

Perhaps the very first effect of the new healthcare reform law was to cause a number of major corporations to restate their earnings — dramatically so. AT&T announced a $1-billion charge. Deere & Co. and Caterpillar said they would take charges of $150 million and $100 million, respectively. And Boeing cut $150 million from its first-quarter earnings. That’s because the so-called Patient Protection and Affordable Care Act eliminated a 4-year-old tax break for employers that provided prescription drug benefits to retirees. The tax break doesn’t go away until 2013, but some companies felt compelled by securities law to report the hit to their earnings right away.