i
1S
33
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1418 16 3 3Z 72
II 919 I0 25
Summary of Statement of Dallas L. Salisbury 12 21 3O 2O
13 822 17 29 28 26 31
623 24
27
EBRI
President, Employee Benefit Research Institute
i TABLES i
During a time when there are no apparent limits on direct federal
APPENDIX TABLE TABLE CONTENTS 5I I
THE TAX REFORM MOVEMENT TABLE NOTES3
Section TABLE 7 Page
Eliminating Employer Deductions for Employee Benefits
presumably employee contributions constitute I0 Deborah benefits the haveJ. for major an byretirement Chollet, an incentive form employer ofEmployer-Provided and savings tobuys health offer more formore programs, than morecompensation would Health thanincluding the halfBenefits: same ofinSocial dollar all cashpersons Coverage, spent than Security with in by
government are at age programs 30 (calculations is now based made on through table employer-sponsored 9). Similarly, the plans. underlying 3 Fewer cost
plans-account An confronted this average Excise amount price Tax with would on for of representatives Benefits nearly providing be subject two-thirds employee to of almost payroll of benefits total every tax, benefit-related special to income various interest tax, tax employees or expenditures that both. benefits may Underbe
what work marginal health To In can force. insurance short, avoid and tax Census should rates. whatever thewere data be added They estim provided the show also atax ted criterion that prefer for liability, at over $17.6 both used individual the social billion for many lastdetermining and decision-making decade, in low- economic 1984.13 andthethereasons. moderate-income proportion This cost to may employer of EBRI be each of a
expenditures, or on "tax incentives," analysis may not need to focus on the
• Tax reform is an appealing concept that attracts broad based support
Provisions INTRODUCTION and Policy Issues, p. I00. For a discussion of taxing employer
7
diversity of employee benefits. During a time of apparent limitations,
NOTES Number ...................... Title 30 PaKe
How Much of Pension-Related Tax Deferrals is
IFor "Our legislative Section whenComplex discussed policy Percent Tax inLaws: BENEFIT assessment of theFull-Time context Can COSTpurposes They FACTORS ofEmployees eliminating Bebenefits FOR Reformed?" Participating EMPLOYEES abuse. can Page be U.S. My classified full News statement, andinto World at
and Medicare, account Savings, for 85 Pension percent Coverage, of employer and Income, payments1983 for benefits.
benefit contributions Tax contributions. reform is to ahealth perennialinsurance, topic of discussion. see also "Revising At least the a dozen Federal major tax Tax
than an pension individual. 3 Somepercent coverage. of these of In distributional pension Morethethan and absence 40health percent problems of insurance tax ofcould the incentives be labor participants avoided force encour inreported major earn aging more tax no employer reform than savings
projected relatively of uniform, providing inthe low the health underlying price President's insurance for society cost 1985for of budget. tobenefits women pay for of differs achild-bearing system widely of health ageaccording is insurance highertothan that the
undertakes single-adult employee's from alternative the 106 tocost proposals, households provide provisions of benefits, thethe with in studies cap the children ifcould code it andtathat cover the rgeted increased statistics lead contributions those to by tax individuals one-third. that expenditures, for will all allow likely Over benefits, and informed half to whose have ofor
or individuals governmentwould decisions choose made to on do the without worker's healthbehalf. and other In this typesview, of insurance. Individual
Rather than capping benefits as a share of compensation, it would be
however, when priorities must be decided upon, careful analysis is required of
Report, least nine Julycategories: 30, 1984. in Selected Lost Employee to AT the VARIOUS Treasury? Benefit AGES Programs,
and a book now being published by EBRI titled Retirement Security and
Treatment Mr. Chairman, of EmployerI aContributions m pleased to to submit HealththisInsurance: statement A to Continuing the Committee Debate,"in
each employee benefit: why each employee benefit exists.
I Percent of Full-Time Employees
Major Tax Polic Taxy,Reform discuss References the various ........... tax reform alternatives. 31
EBRI Issue Brief no.Medium Employees 21, August, and Large 1983.Establishments, Employees 1983a Average Annual
$50,000. Value-Added refo_Retirement proposals Tax Plans. were Employer introduced contributions in the 97thforCongress. retirement More planstaxtotal reform 9.0
provision, income in 1983 the (table administrative 3). This Submiss group's structures ion average On that income makewas group $9,651, purchases just under
may the employee's proposals cost pay as ofthat age much insuring would under as $90 young, include allbillion major single nonpension benefits. in men. benefits employee InBenefits short, in 1984 benefits the for andaverage younger serves in theprice employees more tax of than basemost are 60 by
married pensions, Employer womenwelfare pensions are now benefits, account in theand forlabor nearly so-called force. 50 "fringe" percent Single-adult ofbenefits benefit-related and could two-earner alltaxbe
priority Research Retirement the elimination highest decisions conducted Accounts could incidence hurt toby(IRAs) be rof ....the the _ made claims, pocketbooks Employee are based r... opreferable it _.oupon