Sometimes during debates over health policy you hear the term “tax exclusion.” That’s referring to the tax breaks for health insurance that people get through their (or a family member’s) employment. The exclusion – or non-taxation of that benefit – is the single largest tax expenditure in the individual income tax code. It is more than the tax breaks for mortgages on personal residences, more than the breaks for state and local taxes, or for charities. In other words, it’s a big pot of money that deficit-cutters may look at, but it’s also politically hard to change. The Congressional Budget Office estimates the exclusion will equal 1.8 percent of GDP between 2013 and 2022.
