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Research report

The ACA's "Cadillac" Tax Versus a Cap on the Tax Exclusion of Employer-Based Health Benefits: Is This a Battle Worth Fighting?

Linda J. Blumberg, John Holahan, Gordon B. Mermin
October 21, 2015
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Abstract

Opposition to the ACA’s “Cadillac” tax is growing. This excise tax applies to employer health benefits exceeding a threshold. There has been broader support over time for a cap on the tax exclusion of employer contributions to health insurance, including from many who now want to repeal the Cadillac tax. We show that the distributional effects of the excise tax and a cap on the exclusion are similar, except when firms choose to pay the excise tax instead of reducing benefits to avoid it (very few employers are expected to leave benefits at prior levels and pay the tax).

Research Area

Federal Budget and Economy Economic effects of tax policy Individual Taxes Health care
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Meet the Experts

  • Linda J. Blumberg
    Senior Fellow
  • John Holahan
    Institute Fellow
  • Gordon B. Mermin
    Principal Research Associate
Research report

New Evidence on The Effect of The TCJA On the Housing Market

Robert McClelland, Livia Mucciolo, Safia Sayed
March 30, 2022
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