| 简介： | U.S. employer-based health insurance (EHI) premiums are not subject to income or payroll taxes. This is regressive taxation because higher income individuals face higher marginal tax rates, which gives a higher EHI subsidy. We show this regressive policy mitigates misallocation between firm and self-employment from non-contractible heterogeneity in talent and health shocks. In our general equilibrium model, removing tax exclusion raises insurance premiums by 67%, coverage falls to 26.9%, and welfare decreases 1.9% due to reduced risk sharing and misallocation. If tax exclusion is extended to private insurance, coverage increases to 97.2%, workers’ taxes fall, and welfare increases 0.3%.
|