ERIC Number: ED317708
Record Type: RIE
Publication Date: 1989-Sep
Current Economic Issues in Employee Benefits. Background Paper No. 39.
Woodbury, Stephen A.
A multitude of public policy issues currently surround the tax treatment of employee benefits, particularly since the tax-favored status of employer contributions to pensions and health insurance has been blamed for a shrinking tax base that has exacerbated the federal budget deficit, an inefficient and bloated health-care sector, overinsurance by many recipients of employer-provided health insurance, rising health care costs, and a tax system made more regressive because those who receive tax-favored employee benefits tend to be in higher-income households than those who do not. A relatively low cap on health insurance contributions--perhaps at an employer contribution of $1,125 annually--would improve efficiency and has at least five points in its favor: (1) it partially addresses the problems of rising health care, overuse of the system, and an inefficiently large health-care sector; (2) it addresses the concern that the tax base will continue to be eroded as health care costs rise and as employer contributions increase; (3) it would not limit or reduce access to basic health care by currently or potentially insurable workers; (4) it would imply an improvement in the equity of the tax system; and (5) it would not foreclose the option of mandating health insurance benefits. (The document contains 85 references, 11 tables, 1 figure, and appendices that discuss data problems in research on employee benefits and review recent studies of the tax treatment of employee benefits.) (CML)
Publication Type: Information Analyses
Education Level: N/A
Sponsor: Department of Labor, Washington, DC. Commission on Workforce Quality and Labor Market Efficiency.
Authoring Institution: N/A
Grant or Contract Numbers: N/A
Note: In "Investing in People: A Strategy to Address America's Workforce Crisis" (CE 054 080).