"One alternative to the Cadillac tax is an 'exclusion cap,' under which individuals enrolled in employer-sponsored plans would be able to exclude premiums from their taxable income only up to a dollar limit (i.e., the cap). This analysis uses RAND's COMPARE microsimulation model to [1] define an exclusion cap scenario that would produce the same amount of federal tax revenues as the Cadillac tax in 2020 and [2] compare the effects of the exclusion cap and the Cadillac tax on families in different income ranges. The analysis shows that there is very little difference in progressivity between the Cadillac tax and a revenue-equivalent exclusion cap."

MORE >>