Tax News

Tax Analysts report:

Layers of tax provisions obscure the true cost of healthcare for most people, said Katherine Baicker, member of the White House Council of Economic Advisers, at a June 16 roundtable discussion in Washington hosted by Tax Analysts. People may notice the lag in their wage increases, she said, but arent likely to immediately associate it with healthcare costs.

Some of the consequences of the rapid growth in healthcare expenditures may be invisible to people because it takes a couple of steps for increases in the costs of your benefits to pass through to increases or lack of increases in your wages, Baicker said.

Politically, however, that disconnect doesnt take healthcare reform - even healthcare reform through the tax code - off the table, Baicker said.

The roundtable, moderated by Tax Analysts President Christopher Bergin, included panelists Baicker; Jason Furman, former special assistant for economic policy to President Clinton; and Len Burman, an Urban Institute senior fellow and codirector of the Urban-Brookings Tax Policy Center. Baicker presented the Bush administrations case for expanding tax-free health savings accounts (HSAs), and the whole panel discussed what role, if any, the tax code should play in the search for solutions to what several participants referred to as the impending healthcare crisis.

Once you get into the tax system, its like a narcotic, said former IRS Commissioner Sheldon Cohen. It hides the cost. It hides the administration. Nobody gives a damn thereafter, and it just festers.

Once weve got it, its hard to break that narcotic habit, he added. Were gonna have to find some way to wean ourselves off of it.

Baicker said that despite all the talk in Washington of imminent disaster on the healthcare front, most privately insured Americans tend to be satisfied with their doctors and insurance plans. But if you ask people what are your health insurance premiums, they tell you the dollar amount that they pay, Baicker said. They dont tell you the dollar amount that they pay plus the amount that their employer pays on their behalf.