The fact on the Affordable Care Act, commonly known as “Obamacare:”

Excerpt from Heritage Foundation March 2009 before the ACA, which did not address the tax treatment, either:

“President Ronald Reagan first proposed a change to the tax law governing health insurance in 1983, but Congress never acted on the proposal. Six years later, analysts at The Heritage Foundation unveiled a national health reform proposal grounded in comprehensive tax reform.

“The current tax treatment of health insurance is a by-product of wage and price controls imposed by the Roosevelt administration during the World War II era. The federal tax code currently excludes, without limit, the value of employer-sponsored health insurance from an individual’s income for the purposes of both income and payroll taxes.

“This tax exclusion for employer-sponsored insurance is a huge, but hidden, tax subsidy. The Joint Committee on Taxation estimated that value of the tax exclusion in 2007 was $246.1 billion in foregone income and payroll taxes. The exclusion represents the largest federal tax expenditure, as well as the third-largest health care expenditure, following only Medicare and Medicaid, the nation’s two largest entitlement programs.”

John Monte

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