HEALTH INSURANCE: Boxer Introduces Tax Deduction For Employees
Sen. Barbara Boxer (D) yesterday proposed legislation "that would permit people who pay a portion of their employer-provided health insurance to deduct those expenses from their federal income taxes," the Sacramento Bee reports. "We want incentives out there so that people will not allow their health insurance to drop off," said Boxer at a Washington briefing (Sample, 4/2). The San Francisco Chronicle reports that "Boxer's legislation would allow employees to deduct up to $2,000 per year for the cost of health insurance for themselves and their families." If a "typical" family making $75,000 a year purchased coverage for the entire household, Boxer explained they could "deduct the $2,000 from their income and lower their tax bill by $560" (Sandalow, 4/2).
The Bee notes that under current law, companies can deduct the full cost of health insurance and those who are self-employed can deduct a portion, but "individuals working for someone else cannot deduct their health insurance payments unless their total health care expenses exceed 7.5% of their adjusted gross income." "We just have sort of forgotten about the working people who pay either all or part of their health care," said Boxer, explaining that 7.5% is "a threshold most people do not meet." To pay for her plan, which she estimates will cost $11 billion, Boxer suggested using funds from the tobacco settlement now working its way through Congress or using funds gained from eliminating a tax deduction of corporate income earned overseas (4/2).
The Chronicle reports that Boxer's "proposals come in an election year when [she] hopes to convince Californians that she has championed consumer health care issues." However, state Rep. Frank Wiggs (R-Windsor), who is challenging Boxer for her seat in the upcoming election, called her latest proposal an "election-year conversion." Riggs' spokesperson Pam Simpson said, "Barbara Boxer has spent the first five years in office raising taxes, and now wants the