About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

1 Robert Carroll, McCain's Health Credit: The Intersection of Health Policy and Tax Policy 1 (2008)

handle is hein.taxfoundation/ffbeexz0001 and id is 1 raw text is: FOUNDATION
September 2008
No. 144

FISCAL
FACT

McCain's Health Credit: The Intersection
of Health Policy and Tax Policy
By Robert Carroll
Both candidates for President have spoken a great deal about the nation's health care system,
focusing on high costs and the large number who go without health insurance coverage.
Health care costs continue to rise more rapidly than incomes, and the number of adults
without health insurance persists at roughly 45 million. But while Senators Obama and
McCain may agree on the problem, they propose very different solutions.
Senator Obama has focused his policy on increasing the government's role in the nation's
health care system. In contrast, Senator McCain proposes to improve today's private health
care markets by reducing the imbalances that arise from the tax treatment of health care.
Specifically, he takes aim at the substantial tax subsidy the federal government has provided
for employer-based health insurance since World War II. This tax subsidy, at roughly $300
billion to $400 billion per year, is the single largest tax preference in the tax code today, ahead
of even the political third rail of the home mortgage deduction.1
What may be particularly surprising to some is that despite this enormous tax subsidy, we still
have the dual, but related problems of high cost growth and a large segment of the population
without any health insurance. Indeed, some have suggested that the tax subsidy may be at
least partly responsible for these problems.2
Replacing a Tax Exclusion with a Refundable Tax Credit
Although Senator McCain's health care plan has other provisions-changes to insurance
regulation, expanded health savings accounts, and a new purchasing pool for people with

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most