Congress Considers Partially Removing Tax Exemption On Employer Provided Health Benefits

Would you be willing to pay more in taxes in order to fund a more equitable health care program for the nation’s uninsured? From MSNBC:

While details of such an approach are still sketchy, it would likely involve employees paying tax on a percentage of their employer-provided health benefits. So if Congress decided that all such premiums in excess of $11,000 for family plans would be taxable income, and your company paid premiums worth $16,000 for your coverage, you’d have to pay taxes on $5,000.

Of course, this is only in the discussion phase right now, and there’s nothing definite. It’s one option being floated as Congress begins to discuss how to actually make President Obama’s proposed health insurance reform package a reality. It’s also something John McCain proposed last year, and for which Obama criticized him. And look who else has proposed it:

In 1984, President Ronald Reagan floated the idea of requiring workers to pay taxes on employer contributions to their health insurance exceeding $2,100 a year. A Washington Post editorial the following year called the proposal “surprisingly lucrative yet eminently fair,” and speculated that “(it) might have helped hold down health care costs in the bargain.” But opposition, especially from labor unions, scuttled the proposal.

“Health insurance ëhaves’ to pay for ëhave-nots’?” [MSNBC]

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