Letting employers exclude contributions for health care and health insurance premiums from taxable income is about as expensive as the major health bills now under consideration in Congress.
Analysts at the Joint Committee on Taxation, an arm of Congress, have published figures supporting that conclusion in a new report.
Analysts at the JCT and the Congressional Budget Office, another congressional think tank, have estimated that implementing the House or Senate health bill as written might cost about $1 trillion, or $100 billion per year, from 2010 to 2019.
If current tax laws prevail, and employers continue to exclude health care and health insurance premium costs from their taxable income or employees' taxable income, the federal government will lose about $568 billion, or an average of about $115 billion per year, over the 5-year-period extending from 2009 to 2013.
In 2008, the "tax expenditures" resulting from laws that permit individuals to deduct medical expenses from taxable income cost the government about $11 billion in income tax revenue, and the mortgage interest deduction cost the government about $25 billion in tax revenue, JCT analysts estimate.
The exclusion of cafeteria plan benefits cost the government about $28 billion in revenue in 2018, and likely will cost the government $173 billion in revenue from 2009 to 2013, the JCT analysts predict.
The new, temporary COBRA health benefits continuation subsidy cost about $8.7 billion in lost tax revenue in 2009 and may cost about $5.7 billion this year, the analysts say.
White House and congressional budget analysts produced similar estimates when President Bush was still in office.
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