Small Business Tax Relief Act of 2007--Continued

Floor Speech

SMALL BUSINESS TAX RELIEF ACT OF 2007--Continued -- (Senate - August 02, 2007)

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Mr. GRASSLEY. Mr. President, as my colleagues have stated, we have to make health insurance more affordable. One thing Democrats and Republicans can agree on is that there are inequities in the tax treatment of health insurance. We all agree that Congress should level the playing field and expand access to health insurance; the question gets down to how.

Proposals which have been introduced so far include the President's proposal, which includes a standard deduction for health insurance. Senator Burr, Senator Coburn, Senator Martinez, Senator Corker, and Senator Dole have formally introduced a tax credit proposal. Each proposal contemplates eliminating the exclusion for employer-provided coverage to meet this end. Currently, a taxpayer who receives health insurance through his or her employer is not taxed on the cost of the health coverage. Individuals who do not receive health coverage through their employer and are not employed and purchase health insurance on the individual market generally do not receive a tax benefit. As we just discussed, this problem is most acute in the small business context.

Senator Wyden and Senator Bennett are also interested in fixing the health care system and making health insurance more affordable. Their proposal also contemplates amending the Tax Code for that purpose. I commend Senators Wyden and Bennett for their work in this area.

I wish to ask Senator Burr if he would take an opportunity at this time to comment on this and explain where he is coming from, and then I will call on Senator Bennett.

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Mr. GRASSLEY. Mr. President, the underlying intent of any of these proposals is to put downward pressure on insurance costs, thereby reducing the cost of health care.

If Congress goes in the direction of a tax credit, the tax credit must be structured so that low-income individuals have a meaningful tax subsidy to purchase health insurance.

If Congress goes in the direction of a standard tax deduction, any deduction must be structured to ensure that taxpayers who continue to receive health care coverage through their employer do not see a significant increase in their taxes.

Congress should also contemplate a combination of a tax credit and a deduction.

A combination effectively marries these tax concepts and may serve as a viable compromise.

I believe that the Senate Finance Committee should hold hearings on the various ways we can reform the health care system. We may even be able to mark up a proposal that could be acted upon by this body before the end of the year.

I yield the floor.

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Mr. GRASSLEY. I would also like to thank my colleagues for their leadership on this issue. I share your concern with the diabetes epidemic in the United States and especially the effect it is having on our Native American communities. I support the reauthorization of the Special Diabetes Program for Indians and also the reauthorization of the Special Funding Program for type I diabetes research. The prevention and treatment of diabetes has improved greatly over the past decade. These programs have clearly played a major role in these improvements. I also look forward to working with my colleagues to reauthorize these programs during this Congress.

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