TY  - JOUR
AU  - Cogan,John F.
AU  - Hubbard,R. Glenn
AU  - Kessler,Daniel P.
TI  - The Effect of Tax Preferences on Health Spending
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13767
PY  - 2008
Y2  - January 2008
UR  - http://www.nber.org/papers/w13767
L1  - http://www.nber.org/papers/w13767.pdf
N1  - Author contact info:
John Cogan
Hoover Institution
Stanford University
Stanford, CA   94305
Tel: NA
E-Mail: cogan@stanford.edu

R. Glenn Hubbard
Graduate School of Business
Columbia University, 101 Uris Hall
3022 Broadway
New York, NY  10027
Tel: 212/854-3493
Fax: 212/864-6184
E-Mail: rgh1@columbia.edu, ws2187@columbia.edu

Daniel Kessler
Hoover Institution
Stanford University
434 Galvez Mall
Stanford, CA  94305
Tel: 650/723-0596
E-Mail: fkessler@stanford.edu
AB  - 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.
ER  -