I just love how politicians consider it some sort of wasteful spending when there is an item of compensation you earn that they can't take from you at the point of a gun. I suppose this ultimately means, "if you like your tax exclusions, you can keep your tax exclusions."
Accounting Today:
The House Ways and Means Committee held a hearing Thursday on proposals to limit tax breaks for employers who provide health care for employees.
“Let’s consider the largest health tax expenditure, for employer-sponsored health insurance plans, commonly referred to as the employer exclusion,” said committee chairman Kevin Brady, R-Texas “Congress incorporated this highly popular tax break into the tax code decades ago so that employers could attract and keep workers during a time of wage freezes. At the time this provision was created, the labor market and the health insurance market both looked very different.”
More than 150 million Americans under the age of 65 now receive their health insurance through their employer, he noted. However, Brady questioned whether the employer exclusion might have some negative economic impact.
“The employer exclusion is a contributing factor in our country’s stagnant wage growth,” he said. “That’s because the tax code incentivizes putting a greater share of compensation toward nontaxable health plans and less to taxable paychecks. So, as health care costs rise, employers divert increases in compensation to health care at the expense of take-home pay.” ...
[Yes, of course. We need politicians to be able to tax every cent of compensation we can ever earn to be made better off. Why didn't I think of that?] Back to the
story:
However, the employer exclusion also had its defenders on the committee, including the ranking Democrat, Rep. Sander Levin, D-Mich., who called the Republican proposal another in a long series of attempts to undermine the Affordable Care Act’s expansion of health care coverage.
“This would disrupt the employer-based health insurance system that 155 million working Americans and their families rely on for coverage, and likely result in many employers no longer offering health coverage to employees,” said Levin. “And it would leave many, including employees who are older or in poor health, without the ability to find affordable coverage.”...
