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Health and Taxes
In his State of the Union address, President Bush proposed to level the "paying" field between Americans who get health insurance through their employers (a benefit that is tax–free) and those who do not, and who must purchase insurance on the open market with after–tax dollars.
For all the griping about our system, Americans have the most advanced health care in the world in part because we still have something resembling a private market for insurance. But it is not a truly efficient market because current tax policy lets businesses—but not individuals—deduct the cost of health expenditures. Thus most Americans with private insurance get it from their employers, which leads to inequities and insulates individuals from the real cost of their treatment decisions.
The President's proposal has been greeted with great skepticism in Congress, but with wider support in the policy community and among editorial boards. Both reactions are unsurprising. The former reaction is to be expected because Democrats will be loath to embrace any Republican health reform, no matter how sensible, with the 2008 presidential elections just around the corner.
The latter reaction is also understandable—since capping the tax deduction for health insurance is a bipartisan idea that has been floated for decades. For more reaction to the President's plan, go here:
A Good Start On Health Care Reform Investor's Business Daily, 1-22-07
State of Troubles Washington Post, 1-24-07
Bush's better health-care policy Washington Times, 1-24-07
Bipartisan Cooperation on Health Care is Dead on Arrival Steven Pearlstein, Washington Post, 1-24-07
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