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FIRST SURRENDER, THEN NEGOTIATE

January 13, 2006

The White House has already rejected the Tax Reform panel's proposed generous cap on health insurance deductions. Why you would declare one of the biggest sacred cows in the tax code untouchable this early in the process is beyond me. The Tax Policy Blog discusses the problems with unlimited health-care deductions:

A vestige of World War II price controls, the exclusion for employer-provided health care is the largest preference in the tax code with an estimated 2006 value of roughly $126 billion. By substantially narrowing the federal tax base, it forces all taxpayers to pay higher tax rates, increasing the distortion caused by federal taxes in markets and ultimately reducing U.S. economic performance.

Lots of good links, too.

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