President Bush is set to propose a standard tax deduction for health insurance and a cap on the amount of employer-provided healthcare benefits that are exempt from taxation, the New York Times reports.
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Get Your Report Now!Under the proposal, families with health insurance would have to pay no income or payroll taxes on the first $15,000 in healthcare insurance they receive, and singles would have to pay no income or payroll taxes on the first $7,500 in healthcare insurance they receive. Any health insurance benefits received above those limits would be subject to tax, the newspaper notes.
Bush says his plan would be an effective way to expand healthcare insurance coverage.
"The president's proposal levels the playing field for Americans who purchase health insurance individually rather than through their employers, providing a substantial tax benefit for all those who currently have health insurance purchased on the individual market," the White House said in a statement.
However, the proposal is already drawing criticism from at least one business group, the newspaper reports.
"This is a classic case of robbing Peter to help Paul pay for coverage," E. Neil Trautwein, a vice president of the National Retail Federation, tells the newspaper. "I do not think the president will find many backers in the employer community for this proposal."
Bush will discuss details of his proposal in his State of the Union address Tuesday.
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