Health insurance and taxes: can changing the tax treatment of health insurance fix our health care system?

• Health benefits a big potential target for raising revenue: President Bush’s FY 2008 budget estimates all employee benefits-related “tax expenditures” (government revenue foregone due to special tax treatment) will amount to $328 billion next year, or 34 percent of the $961 billion worth of total tax expenditures in the federal budget. Tax-favored employment-based health insurance benefits account for the largest single tax expenditure: almost 17 percent of the total amount and almost 49 percent of all employee benefits-related tax expenditures.