Depending on one’s perspective, letting employers exclude group health premiums from taxable income either costs the U.S. Treasury a fortune in lost taxes or helps the employers protect a large amount of revenue from confiscation by the revenooers.
Either way, staff analysts at the Joint Committee on Taxation (JCT) have have come up with a “tax expenditure” estimate for the group health tax exclusion that is significantly lower than the estimate published by analysts at the U.S. Treasury Department and the federal Office of Management and Budget (OMB).
The JCT analysts are estimating the group health exclusions will reduce federal income tax revenue by about $725 billion over 5 years.
That compares with an estimate of about $1.1 trillion that OMB analysts published about a year ago in the Analytical Perspectives report that came out along with the fiscal year 2012 budget proposal.
The JCT is an arm of the U.S. House and the U.S. Senate. The JCT analysts have prepared their report on tax expenditures for the House Ways and Means Committee and the Senate Finance Committee.
The JCT and Obama administration have come up with different tax expenditure numbers partly because their projections cover different periods.
The JCT analysts looked at the period from 2011 to 2015, and the Obama administration analysts looked at the period from 2012 to 2016.