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Steffie Woolhandler and David Himmelstein's Comments on Taxing of Employer Paid Health Insurance

Health & Medicine Policy Research Group (HMPRG)
August 20, 2009

Excerpt from their post published in the New England Journal of Medicine, August 19, 2009: Many health economists, ranging from Democratic advisor Jonathan Gruber1 to the Heritage Foundation,2 have argued that tax subsidies for employer-paid health insurance encourage over-insurance and are highly regressive, directed mainly to higher-income families. We beg to differ. The subsidies meet the usual definition of progressivity: they taper down (as a percentage of income) as income rises. Ending them would inflict a regressive tax increase, taking a larger share of income from insured near-poor and middle-class families than from the wealthy.

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