The Effect of Tax Preferences on Health Spending

John F. Cogan, Robert Hubbard and Daniel P. Kessler

No 13767, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper, we estimate the effect of the tax preference for health insurance on health care spending using data from the Medical Expenditure Panel Surveys from 1996-2005. We use the fact that Social Security taxes are only levied on earnings below a statutory threshold to identify the impact of the tax preference. Because employer-sponsored health insurance premiums are excluded from Social Security payroll taxes, workers who earn just below the Social Security tax threshold receive a larger tax preference for health insurance than workers who earn just above it. We find a significant effect of the tax preference, consistent with previous research.

JEL-codes: H2 I1 (search for similar items in EconPapers)
Date: 2008-01
New Economics Papers: this item is included in nep-hea, nep-pbe and nep-pub
Note: EH
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Published as THE EFFECT OF TAX PREFERENCES ON HEALTH SPENDING AUTHOR(S) Cogan, John F.; Hubbard, R. Glenn; Kessler, Daniel P. PUB. DATE September 2011 SOURCE National Tax Journal;Sep2011, Vol. 64 Issue 3, p795

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