HealthLawProf Blog

Editor: Katharine Van Tassel
Akron Univ. School of Law

A Member of the Law Professor Blogs Network

Thursday, November 18, 2004

Goody-Bye to the Employer-Sponsored Health Insurance Tax Deduction?

The Washington Post reports today on some of the President's plans for revising the tax code.   Although these are tentative, it does appear that some drastic changes are in store - including the elimination of the tax deduction for employer-sponsored health insurance.   The Post states,

"The Bush administration is eyeing an overhaul of the tax code that would drastically cut, if not eliminate, taxes on savings and investment, but it is unlikely to try to replace the existing tax code with a single flat income tax rate or a national sales tax, according to several sources familiar with ongoing tax deliberations.

During his reelection campaign, President Bush piqued interest among conservatives and liberals alike when he said replacing the income tax with a national sales tax was "an interesting idea." Just after the election he signaled that tax policy would be a centerpiece of his domestic agenda, reiterating his pledge to name a bipartisan panel to draft a fundamental tax reform proposal. That sent conservatives scurrying into either the flat tax or sales tax camp to muster political momentum.

But before the tax panel is even named, administration officials have begun dialing back expectations that they will move to scrap the current graduated income tax for another system.

Instead the administration plans to push major amendments that would shield interest, dividends and capitals gains from taxation, expand tax breaks for business investment and take other steps intended to simplify the system and encourage economic growth, according to several people who are advising the White House or are familiar with the deliberations.

The changes are meant to be revenue-neutral. To pay for them, the administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction for employer-provided health insurance, the advisers said. "

I cannot believe that this would be acceptable to Congress but who knows . . . .  I don't seem to be able to predict anything in politics these days.

"To pay for those large tax cuts, the administration is looking at eliminating both the deduction for state and local taxes, and the business tax deduction for employer-sponsored health insurance. That would raise nearly $926 billion over five years, according to White House and congressional documentsTo pay for those large tax cuts, the administration is looking at eliminating both the deduction for state and local taxes, and the business tax deduction for employer-sponsored health insurance. That would raise nearly $926 billion over five years, according to White House and congressional documents."

http://lawprofessors.typepad.com/healthlawprof_blog/2004/11/goodybye_to_the_1.html

| Permalink

Comments

Post a comment