WANT TO HELP POOR PEOPLE AND SOAK THE RICH?

Change the tax treatment of fringe benefits. “One indefensible policy involves superior tax treatment for employee fringe benefits, such as health insurance and retirement benefits, which operates to harm lower income people. It is well known that our tax system treats people who have to purchase their own health insurance differently than it treats people who receive employer provided health insurance. If one’s employer provides health insurance, the employee need not pay tax on the value of the insurance, even though this is a valuable fringe benefit. By contrast, if one does not receive employer provided health insurance, then one has to take one’s wages, pay taxes on them, and then pay for the insurance from those wages. Thus, the employer provided health insurance is tax-free but the individually purchased health insurance is taxed. This is indefensible. It is both economically inefficient and treats people who work for small companies, which are much less likely to provide health insurance, worse than those who work for larger companies. Many of these people at the smaller companies earn less income.”

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Changing this would help Trump’s constituency at the expense of affluent Blue-state voters, which is probably why Democrats haven’t been pushing this sort of change.

 

h/t GR

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