Taxing Health Benefits Hot Issue

Legislators weigh wider health coverage and cost to taxpayers

Columbus Dispatch

WASHINGTON -- The goal is simple enough: Provide health insurance to the 44 million Americans without any coverage. The trick is how to pay for it.

This week, Senate Finance Committee Chairman Max Baucus, D-Mont., is expected to unveil a controversial plan to tax at least some of the health benefits that millions of Americans receive from their employers.

By doing so, President Barack Obama and Senate Democrats could raise a large chunk of the $1.5 trillion needed during the next decade to finance the expansion of health insurance to all Americans.

But analysts warn that such a tax is fraught with political peril because 164 million Americans receive their health insurance from their employers without having to pay income or payroll taxes on the premiums. It also would force Obama to scrap promises not to tax health benefits and not to raise taxes "a single dime" on families making less than $250,000 a year.

A tax on health benefits unites a coalition of unusual allies. Sen. George V. Voinovich, R-Ohio, has said he might favor taxing at least some portion of health-care benefits. But Sen. Sherrod Brown, D-Ohio, said Friday, "We shouldn't go there. I don't think you impose taxes on middle-class workers on their health-care plans."


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