“Let me be that I am…”
…and seek not to tax me.
Don’t look now, but our friends in Congress aren’t done messing with your livelihood just yet.
The Senate Finance Committee – led by Montana Democrat Max Baucus – drafted and shipped out a staff report late last month, called, simply, “Economic Security,” detailing various tax reform options. The report is a flotilla of trial balloons just waiting to run in the headwinds of hyper-partisanship. You can read it for yourself here.
So what’s one way to reform the tax code in this country, while tacking a still-ballooning federal budget deficit? Why, get rid of those pesky tax deductions – or expenditures as they’re perceived by the stiffs in D.C.
And why not start at the top? Because while the numbers might vary depending on the source, there’s no debate that the exclusion employer contributions for medical care and premiums, and long term care insurance, remains the single biggest drag on the Treasury. And the Congressional Budget Office insists it will grow to nearly 2 percent of GDP by 2026. Last year, it accounted for roughly $280 billion of lost federal revenue.
So what’s the committee recommend? How about getting rid of it altogether?
“1. Reduce tax expenditures for employer-provided health benefits"
a. Repeal tax incentives for employer-provided health benefits
i. Repeal the exclusion for employer-provided health benefits by imposing a cap which decreases over time until all employer contributions are subject to tax;
ii. Disallow new contributions to health savings accounts and flexible spending accounts;
i. Allow a deduction for the purchase of health insurance in the individual market up to the average cost for health insurance, or,
ii. Provide a deduction equal to the exclusion for employer-provided insurance for workers without employer-provided plans.”
The section wraps up with a call for higher sin taxes, namely alcohol, tobacco and marijuana (thank you, Colorado and Washington, you frickin’ hipsters), while neglecting soft drinks and junk food entirely.
The list goes on and on, throwing out other tax-privileged paper tigers, such as smaller fringe benefits, life insurance policies and executive comp plans. But I can’t read anymore.
Leave it to Congress – again the group of people who’s own health plan remains exempt from the rules all the rest of us have to toil under – to suggest killing one more thing that actually works.
Well, one thing’s certain: What Obamacare doesn’t kill off, proposals like this will quickly finish off.
Originally published on BenefitsPro.com