Americans who want to follow how the health care debate could affect their tax bill should focus on one man in the next week: Max Baucus.
The Democratic senator from Montana is leading the charge on brokering agreements and has promised to deliver a draft of a bill on Wednesday.
As chairman of the Senate Finance Committee, he’s the lawmaker who’ll have the most influence over how Washington pays for reform. One of the main ways under consideration: taxing a portion of some workers’ health benefits.
Lawmakers want to cap what’s called the health care exclusion. That’s the amount of money an employer contributes to a worker’s health insurance costs.
Right now, the entire contribution from the employer is treated as tax-free to the worker. Under the plans being considered, workers whose employer contributions don’t exceed the cap wouldn’t be taxed.
Until Congress decides what the cap would be, it’s impossible to say just how many people would be affected.
Baucus offered some guidance last week. He indicated that the cap could be tied to the basic health plan for federal employees. He said the cap would be set at “a high enough level so it won’t affect very many people,” according to Tax Analysts. Baucus also signaled that the provision might not go into effect right away.
Here’s the rub: If it won’t affect very many people, then it won’t go as far in helping to pay for health care reform.
Figuring out a way to pay for health care reform is critical. The cost is estimated at a cool trillion or so.
The Joint Committee on Taxation, a key congressional body, has estimated that a cap based on a standard option plan in the federal health care network could raise $418.5 billion over 10 years.
But if the cap is set above the value of that standard option, or if limits are placed on the cap’s reach, the amount of revenue raised would be reduced — in some cases considerably.
For instance, the JCT estimated that if the cap based on that standard option only applied to singles with adjusted gross incomes of more than $100,000 (or couples with more than $200,000), it would raise only $162 billion over 10 years.
Here’s another tricky issue: Federal budget deficits.
Lawmakers say they are committed to enacting health reform so it does not add to the federal deficit over 10 years.
One solution would be to cap the exclusion in such a way that it doesn’t capture much revenue in the early years but raises considerably more at the end of the 10-year window, said Howard Gleckman, editor of the Tax Policy Center’s TaxVox blog.
In other words, it could be set up in such a way that it wouldn’t affect many people initially but could catch them later on.
The key will be whether and how the cap is set to increase annually.
If the cap is indexed to inflation, an increasing number of people could be subject to it since medical costs grow faster than inflation. And if it’s not indexed at all, that would eventually subject the greatest number of people to a tax on a portion of their health benefits.
In the end, it is still likely that taxing the health care exclusion may not be enough to pay for reform. Lawmakers would have to come up with other “pay-fors.”
Not all of the money will come from higher taxes.
Indeed, Baucus has indicated there might be a 50-50 or 60-40 split between taxes and reduced spending measures to pay for reform, according to Tax Analysts.
President Obama has already proposed about $266 billion worth of savings in his budget that could be devoted to health reform and proposed another $313 billion in his weekly address on Saturday.
But lawmakers may have to seek out other tax revenue measures on top of that to pay the piper. What they’ll choose is still in play.
If they’re desperate enough, lawmakers might take a second look at a proposal Obama made in his 2010 budget three months ago.
He called for a limit on itemized deductions that high-income taxpayers could take.
Instead of using their top income tax rate to calculate the value of a deduction, single filers making more than $200,000 and joint filers making more than $250,000 wouldn’t be allowed to reduce their tax bills by any more than 28% of a given deduction. That’s below what the top two tax rates would be in 2011.
The JCT estimates that such a measure could raise $269 billion over 10 years.
The problem is Obama’s proposal was almost roundly rejected by Democrats and Republicans alike.
The limit would mean the value of popular deductions — such as mortgage interest and charitable contributions — would be reduced for high-income filers. So expect the lobbyists for related industries to pitch a fit.
Tags: americans tax bill, health benefits, health care, tax-free, us
Recommeneded website…
below you’ll find the link to some sites that we think you should visit…
development loan…
[...]please check out the sites we comply with, such as this one particular, because it represents our picks through the web[...]…
Websites we think you should visit…
[...]although websites we backlink to below are considerably not related to ours, we feel they are actually worth a go through, so have a look[...]……
[...]Most of this can be attributed to the fact that some regulations and stipulations on lenders and lending institutions started to be relaxed[...]…
Though the instant payday loans online cannot be viewed as a singular remedy for all your financial woes, this is the best way to find hard cash that you can then use quickly…
[...]The instant approval cash advance comes as a refreshingly good news to everybody[...]…
Instant cash loans online require a name, address, age, job, bank account, and amount of money wanted…
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
Websites you should visit…
[...]below you’ll find the link to some sites that we think you should visit[...]……
Check this out…
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]……
Awesome website…
[...]the time to read or visit the content or sites we have linked to below the[...]……
[...]There may be times when you won’t be able to pay back the whole faxless cash amount by the due date[...]…
Have a financial emergency? Need money fast? Wondering what your options are? Then you will be relieved to discover quick online loans…
[...]The quick and easy way to get extra money is the reason for their wide appeal[...]…
You can structure flexible repayment plans and get renewal options, if needed…
[...]While lenders who offer a payday loans no direct deposit service will issue checks on the day of application, these may take a few days to clear in your bank account[...]…
The rapid cash payday loans is really an affordable loan alternative that everyone should know about…
You should check this out…
[...] Wonderful story, reckoned we could combine a few unrelated data, nevertheless really worth taking a look, whoa did one learn about Mid East has got more problerms as well [...]……
food would find their fate in that…
trinket for the coming year (a button for bachelorhood, a thimble for spinsterhood, small cloth piece for poverty, or small matchstick for who would beat their wife). those who found coins might look forward to money or other wealth coming their…
Wow!…
A very spectacular post. …
How To Define Absolute Wealth…
[...]Thank you for posting this fascinating info. I’ve just had yet another strategy pop into my mind[...]…
Deck Design…
[...]that could be the finish of this post. Right here you?ll discover some web sites that we think you?ll appreciate, just click the links over[...]…
Insulated Concrete Forms…
[...]Here is a great Blog You may Discover Interesting that we Encourage You[...]…
Ontario Property for Sale…
[...]one of our guests recently advised the following website[...]…
Luxury Home for Sale…
[...]Every after in a while we select blogs that we study. Listed below are the most recent web sites that we select [...]…
outside play equipment…
[...]usually posts some pretty exciting stuff like this. If you are new to this site[...]…
elliptical trainer reviews…
[...]Here are several of the web sites we suggest for our visitors[...]…
eureka 313a enviro…
[...]below you?ll come across the link to some web sites that we consider it is best to visit[...]…
teeter hang ups ep-950 inversion therapy table…
[...]below you?ll come across the link to some web-sites that we feel you must visit[...]…
metronome running…
[...]always a huge fan of linking to bloggers that I really like but do not get lots of link really like from[...]…
toaster ovens…
[...]the time to study or stop by the content material or web pages we’ve linked to below the[...]…
Check this out…
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]……
best buy gift card coupon…
[...]How the health care debate could affect Americans tax bill | Money World News[...]…
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
Superb website…
[...]always a big fan of linking to bloggers that I love but don’t get a lot of link love from[...]……
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
Websites worth visiting…
[...]here are some links to sites that we link to because we think they are worth visiting[...]……
Sources…
[...]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[...]……
online versicherungsverleich…
[...]How the health care debate could affect Americans tax bill | Money World News[...]…
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
Check this out…
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]……
[...]The information mentioned in the article are some of the best available [...]……
[...]below you’ll find the link to some sites that we think you should visit[...]……
Recent Blogroll Additions……
[...]usually posts some very interesting stuff like this. If you’re new to this site[...]……
Gems form the internet…
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]……
Payday loans…
[...]How the health care debate could affect Americans tax bill | Money World News[...]…
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
live jazz…
[...]How the health care debate could affect Americans tax bill | Money World News[...]…
internet explorer for mac…
[...]How the health care debate could affect Americans tax bill | Money World News[...]…
kites…
[...]How the health care debate could affect Americans tax bill | Money World News[...]…
Read was interesting, stay in touch……
[...]please visit the sites we follow, including this one, as it represents our picks from the web[...]……
Enjoyable Reading…
I’m thoroughly enjoying it!…
……
I am glad to be a visitor of this arrant site ! , appreciate it for this rare info ! ….
Cool sites…
[...]we came across a cool site that you might enjoy. Take a look if you want[...]……