Below is an excerpt from the article linked below. If Sen. Baucus' alternative is enacted, it will raise tax for millions of Americans, not just the 1.2% so called rich Americans, making $200,000 for singles and $250,000 for married couples.
http://money.cnn.com/2009/03/04/news/economy/itemized_deduc_prospects/index.htm
Senator offers another approach
Baucus pointed to one possible alternative. He asked Geithner whether the administration would consider generating new revenue by curbing or eliminating the tax break offered to employees when they buy health insurance policies through their companies.
Currently, the portion of their premiums paid by the employer is treated as tax free income to employees, meaning they pay no income tax on that subsidy, nor do they pay Social Security or Medicare tax on it.
The health insurance exclusion is the federal government's single biggest tax expenditure, worth $246 billion in forgone revenue in 2007, according to the Joint Committee on Taxation.
Calls to change the tax exclusion have been made before both because the subsidy does not discourage workers from being more cost-conscious in their health care decisions and because it favors only those who get insurance through an employer, not those who buy policies on their own.
During last year's campaign, Obama said that while he wanted to reform health care, he would not seek to overturn the tax-free subsidy for those who get their insurance from their jobs.
Without committing to Baucus' suggestion in particular, Geithner seemed to indicate that the administration might be willing to reconsider its deduction proposal.
"We recognize there [are] more paths to [paying for health reform] than what we laid out in the budget," he told the Finance Committee. "But we wanted to put it on the table to prove the credibility of our commitment to do this, concrete proposals that would achieve that."
