Quietly tucked inside President Obama’s 155-page jobs bill is a provision to count a portion of the value of health benefits provided to certain individuals as taxable income.
The proposal would impact high earners — individuals making more than $200,000 and families making more than $250,000.
It was added as a way to help pay the nearly $447 billion price tag for Obama’s plan to get Americans back to work.
The provision would take affect in 2013 and be a radical departure from the norm for taxpayers, who are used to having their health benefits exempt from taxation.
The bill also proposes lowering the amount of out-of-pocket health costs high earners can deduct from their income taxes.
Legislation may be divided
As is, Obama’s jobs bill seems to have little chance of passage. Many Democrats seem opposed to the idea of taxing health plans, while Republicans have voiced their displeasure over many of the new spending elements of the legislation.
But Republicans have indicated they’re willing to work with the White House on certain provisions of the bill that would lower payroll taxes and extend unemployment benefits.
It’s possible the bill may be broken into pieces. A spokesperson for the president indicated Obama wouldn’t automatically veto legislation that enacted only part of his overall plan.
During your free trial, you can cancel at any time with a single click on your “Account” page. It’s that easy.
