That’s not what happened. The federal government capped wages during WWII, and in response the unions threatened to strike, which would have shut down the war e

That’s not what happened. The federal government capped wages during WWII, and in response the unions threatened to strike, which would have shut down the war effort. To mollify them, the health insurance that unions had negotiated as a fringe benefit from their employers was temporarily made tax-free (normally you pay taxes on the cash value of fringe benefits). After the war, it was supposed to go back to normal — but people had gotten used to not paying taxes for their insurance benefits, and it became politically impossible to go back to the way things were pre-war.