A Solution to the Health Care Debate?

February 22, 2011 § Leave a comment

This Wall Street Journal article discussed the possibility of treating health benefits as taxable income.  I found it interesting to look at the idea of health care reform through an accounting perspective.  While there are numerous and varied opinions about the Affordable Health Care Act, a survey answered by top economic bloggers showed that “[d]espite their split feelings on the health-care act…almost all the respondents – some 71% – agreed that the solution to America’s health-care crisis is to tax health benefits as income.”  This caught my attention because of the high number of respondents who, despite varying viewpoints on the health care act itself, agreed that taxing health care benefits was the solution to a complex problem.  The article goes on to explain that by being taxed on their health care benefits, employees would be more aware of the cost associated with such benefits and would have the opportunity to take that cost and compare it to other insurances on the open market.  I think that the possibility of taxing health care benefits does have its advantages, especially if this increase in income allows the government to decrease tax rates without losing income, as the article points out.  It could prove to be a good idea because it places an economic value on something that many people, both employees and entrepeneurs, don’t always know how to account for.


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