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Policy Analysts Urge Preservation of 'Cadillac' Tax

OCT. 1, 2015

Policy Analysts Urge Preservation of 'Cadillac' Tax

DATED OCT. 1, 2015
DOCUMENT ATTRIBUTES
  • Authors
    Aaron, Henry J.
    Abaluck, Jason
    Albouy, David
    Antos, Joseph
    Auerbach, Alan
    Agarwal, Nikhul
    Baker, Laurence
    Baily, Martin Neil
    Berndt, Ernst
    Blumberg, Linda J.
    Buchmueller, Thomas
    Bundorf, M. Kate
    Burman, Leonard E.
    Burtless, Gary
    Butler, Stuart M.
    Chandra, Amitabh
    Chernew, Michael
    Cullen, Julie Berry
    Cutler, David
    Dafny, Leemore
    Danzon, Patricia
    Deaton, Angus
    DeLong, Brad
    Diamond, Peter
    Dor, Avi
  • Institutional Authors
    Brookings Institution
    Yale University
    University of Illinois
    American Enterprise Institute
    University of California
    Massachusetts Institute of Technology
    Stanford University
    Urban Institute
    Harvard University
    Northwestern University
    University of Pennsylvania
    Princeton University
    George Washington University
    University of Minnesota
    University of Michigan
    Boston University
    Brown University
    Carnegie Mellon University
    University of Southern California
    New York University
    University of Arizona
    Columbia University
    University of Chicago
    University of Maryland
    Georgetown University
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2015-22091
  • Tax Analysts Electronic Citation
    2015 TNT 191-25

 

October 1, 2015

 

 

The Honorable Orrin G. Hatch

 

Chairman

 

Committee on Finance

 

United States Senate

 

 

The Honorable Ron Wyden

 

Ranking Member

 

Committee on Finance

 

United States Senate

 

 

The Honorable Paul D. Ryan

 

Chairman

 

Committee on Ways and Means

 

U.S. House of Representatives

 

 

The Honorable Sander M. Levin

 

Ranking Member

 

Committee on Ways and Means

 

U.S. House of Representatives

 

 

Dear Chairman Hatch, Senator Wyden, Chairman Ryan, and Congressman Levin:

For decades economists and health policy experts of all political persuasions have agreed that the unlimited exclusion of employer-financed health insurance from income and payroll taxes is economically inefficient and regressive. The Affordable Care Act established an excise tax on high-cost health plans (the so-called 'Cadillac tax') to address these issues.

The Cadillac tax will help curtail the growth of private health insurance premiums by encouraging employers to limit the costs of plans to the tax-free amount. The excise tax will discourage the provision of insurance that covers such a large proportion of health care spending that consumers have little incentive to insist on cost-effective care and providers have little incentive to provide it. As employers redesign health insurance plans to hold costs within the tax-free amount, cash wages or other fringe benefits will increase. Furthermore, repealing the Cadillac tax would add directly to the federal budget deficit, an estimated $91 billion over the next decade according to the Joint Committee on Taxation.

We, the undersigned health economists and policy analysts, hold widely varying views on other provisions of the Affordable Care Act, and we recognize that measures other than the Cadillac tax could have been used to restrict the open-ended health insurance tax break.

But, we unite in urging Congress to take no action to weaken, delay, or reduce the Cadillac tax until and unless it enacts an alternative tax change that would more effectively curtail cost growth.

Sincerely,

 

 

Henry Aaron

 

Brookings Institution

 

 

Jason Abaluck

 

Yale University

 

 

David Albouy

 

University of Illinois

 

 

Joseph Antos

 

American Enterprise Institute

 

 

Alan Auerbach

 

University of California

 

 

Nikhil Agarwal

 

Massachusetts Institute of

 

Technology

 

 

Laurence Baker

 

Stanford University

 

 

Martin Baily

 

Brookings Institution

 

 

Ernst Berndt

 

Massachusetts Institute of

 

Technology

 

 

Linda Blumberg

 

Urban Institute

 

 

Thomas Buchmueller

 

University of Michigan

 

 

M. Kate Bundorf

 

Stanford University

 

 

Leonard Burman

 

Urban Institute

 

 

Gary Burtless

 

Brookings Institution

 

 

Stuart Butler

 

Brookings Institution

 

 

Amitabh Chandra

 

Harvard University

 

 

Michael Chernew

 

Harvard University

 

 

Julie Berry

 

Cullen University of California

 

 

David Cutler

 

Harvard University

 

 

Leemore Dafny

 

Northwestern University

 

 

Patricia Danzon

 

University of Pennsylvania

 

 

Angus Deaton

 

Princeton University

 

 

Brad DeLong

 

University of California

 

 

Peter Diamond

 

Massachusetts Institute of

 

Technology

 

 

Avi Dor

 

George Washington University

 

 

Bryan Dowd

 

University of Minnesota

 

 

Mark Duggan

 

Stanford University

 

 

Susan Dynarski

 

University of Michigan

 

 

David Ellwood

 

Harvard University

 

 

Douglas Elmendorf

 

Brookings Institution

 

 

Ezekiel Emanuel

 

University of Pennsylvania

 

 

Michael Frakes

 

Northwestern University

 

 

Austin Frakt

 

Boston University

 

 

John Friedman

 

Brown University

 

 

Donald Fullerton

 

University of Illinois

 

 

William Gale

 

Brookings Institution

 

 

Martin Gaynor

 

Carnegie Mellon University

 

 

Paul Ginsburg

 

University of Southern California

 

 

Sherry Glied

 

New York University

 

 

Lawrence Goulder

 

Stanford University

 

 

Jonathan Gruber

 

Massachusetts Institute of

 

Technology

 

 

Gautam Gowrisankaran

 

University of Arizona

 

 

Ben Handel

 

University of California

 

 

Ron Haskins

 

Brookings Institution

 

 

Kate Ho

 

Columbia University

 

 

John Holahan

 

Urban Institute

 

 

Jill Horwitz

 

University of California

 

 

Hilary Hoynes

 

University of California

 

 

Robert Huckman

 

Harvard University

 

 

Robert Inman

 

University of Pennsylvania

 

 

Damon Jones

 

University of Chicago

 

 

Lawrence Katz

 

Harvard University

 

 

Melissa Kearney

 

University of Maryland and

 

Brookings Institution

 

 

Jenny Kenney

 

Urban Institute

 

 

Jonathan Kolstad

 

University of California

 

 

Darius Lakdawalla

 

University of Southern California

 

 

Robin Lee

 

Harvard University

 

 

Arik Levinson

 

Georgetown University

 

 

Frank Levy

 

Massachusetts Institute of

 

Technology (emeritus)

 

 

Helen Levy

 

University of Michigan

 

 

Erzo F.P. Luttmer

 

Dartmouth College

 

 

Pinar Karaca

 

Mandic University of Minnesota

 

 

Eric Maskin

 

Harvard University

 

 

Thomas McGuire

 

Harvard University

 

 

Ellen Meara

 

Dartmouth College

 

 

David Meltzer

 

University of Chicago

 

 

Bruce Meyer

 

University of Chicago

 

 

Marilyn Moon

 

American Institutes for Research

 

 

Fiona Scott

 

Morton Yale University

 

 

Adriana Lleras-Muney

 

University of California

 

 

Alicia Munnell

 

Boston College

 

 

Len Nichols

 

George Mason University

 

 

Kavita Patel

 

Brookings Institution

 

 

Mark Pauly

 

University of Pennsylvania

 

 

Harold Pollack

 

University of Chicago

 

 

Daniel Polsky

 

University of Pennsylvania

 

 

James Rebitzer

 

Boston University

 

 

Robert Reischauer

 

Urban Institute

 

 

Alice Mitchell

 

Rivlin Brookings Institution

 

 

Christopher Ruhm

 

University of Virginia

 

 

Andrew Samwick

 

Dartmouth College

 

 

Douglas Shackelford

 

University of North Carolina

 

 

Louise Sheiner

 

Brookings Institution

 

 

Kosali Simon

 

Indiana University

 

 

Kent Smetters

 

University of Pennsylvania

 

 

Neeray Sood

 

University of Southern California

 

 

Mark Stabile

 

University of Toronto

 

 

Amanda Starc

 

University of Pennsylvania

 

 

Eugene Steuerle

 

Urban Institute

 

 

Katherine Swartz

 

Harvard University

 

 

Richard Thaler

 

University of Chicago

 

 

Robert Town

 

University of Pennsylvania

 

 

Paul Van de Water

 

Center on Budget and Policy

 

Priorities

 

 

Tom Vogl

 

Princeton University

 

 

Kevin Volpp

 

University of Pennsylvania

 

 

Gail Wilensky

 

Project HOPE

 

 

Roberton Williams

 

University of Maryland

 

 

David Wise

 

Harvard University

 

 

Justin Wolfers

 

University of Michigan

 

 

Richard Zeckhauser

 

Harvard University

 

 

Stephen Zuckerman

 

Urban Institute
DOCUMENT ATTRIBUTES
  • Authors
    Aaron, Henry J.
    Abaluck, Jason
    Albouy, David
    Antos, Joseph
    Auerbach, Alan
    Agarwal, Nikhul
    Baker, Laurence
    Baily, Martin Neil
    Berndt, Ernst
    Blumberg, Linda J.
    Buchmueller, Thomas
    Bundorf, M. Kate
    Burman, Leonard E.
    Burtless, Gary
    Butler, Stuart M.
    Chandra, Amitabh
    Chernew, Michael
    Cullen, Julie Berry
    Cutler, David
    Dafny, Leemore
    Danzon, Patricia
    Deaton, Angus
    DeLong, Brad
    Diamond, Peter
    Dor, Avi
  • Institutional Authors
    Brookings Institution
    Yale University
    University of Illinois
    American Enterprise Institute
    University of California
    Massachusetts Institute of Technology
    Stanford University
    Urban Institute
    Harvard University
    Northwestern University
    University of Pennsylvania
    Princeton University
    George Washington University
    University of Minnesota
    University of Michigan
    Boston University
    Brown University
    Carnegie Mellon University
    University of Southern California
    New York University
    University of Arizona
    Columbia University
    University of Chicago
    University of Maryland
    Georgetown University
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2015-22091
  • Tax Analysts Electronic Citation
    2015 TNT 191-25
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