Huntsman tax overhaul would eliminate tax breaks for employer health plans

Republican presidential candidate and former Utah Gov. Jon Huntsman on Wednesday announced a tax-reform plan that would unravel the nation’s system of employer-sponsored health insurance, the Center for American Progress’s Seth Hanlon opines on the liberal website ThinkProgress.

Huntsman proposes to replace the mind-boggling federal tax code with three individual-tax brackets. To pay for his plan, Huntsman would eliminate “all loopholes, deductions and tax expenditures.”

Those expenditures, according to the Joint Committee on Taxation and the Treasury Department, include the tax-free treatment of employer-sponsored health insurance that enables employers to provide health coverage to some 160 million American workers and their dependents. The exclusion of employer contributions for medical insurance premiums and medical care was worth more than $100 billion in 2011.

Sen. Ron Wyden (D-Ore.) and then-Sen. Bob Bennett (R-Utah) championed that idea during the healthcare reform debate, but it went nowhere, in part because of strong opposition from unions and many employers.