Serious efforts to forge a budget agreement in 2013 will increase the likelihood that lawmakers will seek changes to tax provisions in order to raise revenue. The exclusion of employer-sponsored health insurance premiums and medical benefits from taxable income could be a target, since this exclusion reduced federal tax revenues by 268billionin2011aloneββbyfarthelargestfederaltaxexpenditure.Moreover,theexclusiondisproportionatelysubsidizesthosewithhigherincomes.Yetproposalstochangethetaxexclusionofemployerβsponsoredinsurancehaveprovokedintensedebate.Thisbriefprovidesestimatesoftherevenuepotentialanddistributionalconsequencesofanewpolicyoption.Thepolicyanalyzedherewouldimposeacap,ordollarlimit,ontheaggregatecostofemployerβsponsoredhealthcoverageexcludedfromincomeandpayrolltaxes.Thecapwouldbesetatthe75thpercentileofthesumofpremiumsandothermedicalbenefits,andwouldbeindexed,orallowedtogrowovertime,byafiveβyearaverageoftherateofGDPgrowth.Thegoalinchoosingthelevelandindexingforthecapwastoselectapolicythatwouldmakeasignificantcontributiontodebtreduction,butwouldbedistributionallyequitable.Thisbriefanswersfourcriticalquestionsrelatedtothe75thpercentilecapontheexclusionofpremiumandmedicalbenefits:Whataretheestimatednewtaxrevenuesrelatedtothispolicyin2014and2014ββ2023?Howmanypeoplewouldpayhighertaxesineachquintileofincome?Howmuchwouldtaxesincreaseforthosepayinghighertaxes?Whatarethecharacteristicsofemployerswhoseemployeesarelikelytopayhighertaxes?Theevidenceshowsthatthe75thpercentiletaxcapwouldproduce264.0 billion in new income and payroll tax revenues over the coming decade while still preserving 93 percent of the tax subsidies available under the current policy. Across all tax units, 15.7 percent would pay higher taxes under the 75th percentile cap on the exclusion of premium and medical benefits in 2014, with this share increasing to 20.0 percent by 2023. Although tax units across the entire income distribution would experience some tax increases, these increases are considerably smaller and less prevalent at lower income levels. The policy change would affect public-sector employees to a greater extent than private-sector employees. In addition, among private-sector employees, those in the financial services/real estate or professional services industries would be affected to a greater extent, while employees in other industries such as the retail industry, would be affected to a lesser extent. Establishments with a union presence have only a modestly higher share of employees with premiums above the 75th percentile premium, compared to the average across all establishments
The emergence of poverty as a social issue has exposed the parochialism of legal education and the emphasis in law school training on the interests of the holders of private wealth. There has been a resulting demand for the incorporation of the issues embraced by law and poverty into the curriculum. But how is this to be achieved? How are these issues to be related to the existing curriculum? Which definitions of poverty, which views of the roots of poverty, and which prescriptions for the necessary changes are to be presented?
The significance of this first, formal, bound, West-published treatment of poverty for study in the law school is in the manner in which it answers these questions. The issues of law and poverty are sufficiently far-ranging and resonant, with implications in most subject matter areas, to provide the law school an opportunity to transcend its trade-school origins. Accordingly, it is appropriate to consider the book as a response to the challenges and criticisms of legal education which arise from the recognition of poverty, to situate the book within this basically political controversy, and to point up the implications of the contents and organization of the book for the development of legal education