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Economic News, Data and Analysis

Tax policy going even farther down the tubes…

Heath insurance? Who really needs health insurance anyway?

Bush Plans Tax Code Overhaul (washingtonpost.com)
Instead the administration plans to push major amendments that would shield interest, dividends and capitals gains from taxation, expand tax breaks for business investment and take other steps intended to simplify the system and encourage economic growth, according to several people who are advising the White House or are familiar with the deliberations.
The changes are meant to be revenue-neutral. To pay for them, the administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction foremployer-provided health insurance, the advisers said.

Does anyone think this is a good idea? Anyone?
Do I really need to explain why eliminating the tax incentive for businesses to provide health insurance will lead to more uninsured?
Do we really need to have the discussion yet again why the private market for heath insurance is fundamentally challenged by adverse selection? Do we?
Do we really need to trot out some distribution tables to show that cutting capital gains, interest, and dividends opens up huge loopholes, and benefits disproportionally the very wealthy?
Well, either people need to start paying attention, or poof! goes the health care for millions of Americans.

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