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Possible Tax Changes to Finance Health Care Reform |
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On May 18, Senate Finance Committee Chair Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA) released policy options for financing reform of America's health care system. The options are the third and final round of policy options for discussion before the Senate Finance Committee's planned markup of health care reform legislation in June. The policy options include many tax changes that will be unpopular and controversial, including the following:
... Restricting the exclusion for employer provided health insurance. The options include (1) capping the exclusion for employer provided health insurance based on the value of the health insurance policy; (2) limiting the exclusion to employees based on adjusted gross income; (3) capping the exclusion based on both the value of the health insurance policy and income level; (4) converting the employer-provided health insurance exclusion to an individual tax deduction or credit; and (5) limiting the exclusion to a percentage of the total premium for health insurance coverage obtained through the employer for all taxpayers.
... Modify or eliminate flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs).
... Eliminating or modifying the itemized deduction for medical expenses
...Other proposals would include modifying or eliminating the special deduction for Blue Cross/Blue Shield and other similar organizations, extending Medicare payroll tax to all State and local government employees, and creating "lifestyle related revenue raisers" in the form of a stiffer, uniform alcohol excise tax, and a new sugar-sweetened beverage excise tax .
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About KMJ Corbin & Company LLP |
KMJ | Corbin & Company, originally founded in 1983, is one of the region's leading multidisciplinary accounting, audit and tax firms. Committed to the highest standards of professional service, KMJ sets itself apart by delivering the extensive industry specialization and technical expertise of a national firm, but the accessibility, service continuity and level of personal relationship expected from a local business. Ranked nationally among CPA firms for our services provided to public companies, KMJ's resource network stretches locally with offices in Orange and San Diego counties, and nationally and internationally through an alliance with The International Accounting Group (TIAG), a worldwide network of independent accounting firms.
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