The employer health insurance tax exclusion could cost the federal government about $244 billion in revenue in 2012, up from $141 billion in 2007.
Ken McDonnell, an analyst at the Employee Benefit Research Institute, Washington, has reported those figures in a table based on data from a fiscal year 2008 budget document prepared by the White House Office of Management and Budget.
McDonnell looked at an OMB analysis of “tax expenditures,” or revenue that the government goes without because of decisions to refrain from taxing certain transactions and income streams.
OMB forecasters expect the government to lose a total of about $2 trillion on all employee benefit tax expenditures–including tax expenditures associated with education deductions, transportation deductions and many other deductions–between 2008 and 2012.
About $1 trillion of the total 2008-2012 benefits tax expenditures will come from health-related tax expenditures, the analysts predict.