"they also have to pay a little bit extra in employment taxes"
I'm not familiar with how this works. If they don't count it as tax-free and it goes into the earnings then they also pay some additional employment taxes? Must mean that they figured those would be less then the amount of people they will discourage from using the program.
"if they limit the assistance for some, they have to limit the assistance for everybody"
I actually see this move (especially when they admit that it is to discourage use) to benefit higher earners who are able to absorb the increased taxes thus maybe making it unfairly benefit highly compensated employees.
