…the sub rosa character of much tax-financed health spending in the United States obscures its
regressivity. Public spending for care of the poor, elderly, and disabled is hotly debated and
intensely scrutinized. But tax subsidies that accrue mostly to the affluent and health benefits
for middle-class government workers are mostly below the radar screen. National
health insurance would require smaller tax increases than most people imagine and would
make government’s role in financing care more visible and explicit.
Money that individuals or private employers pay directly to insurers
or health care providers would be classified as “private”—with one important
caveat: that many of these “private” payments are subsidized by taxes. For instance,
if Jones earns $50,000 in salary plus $6,000 in employer-paid health
benefits, she pays no taxes on the $6,000 (and the employer deducts it as a business
expense).3 In contrast, if Jones were to receive a $6,000 pay increase, she
would pay an additional $2,779 in taxes: $1,551 in federal income tax, $310 in state
income tax, and $918 in payroll taxes.
When government grants Jones a $2,779 tax preference, these funds must be
made up from elsewhere… http://www.pnhp.org/publications/payingnotgetting.pdf