[Congressional Record Volume 141, Number 16 (Thursday, January 26, 1995)]
[Extensions of Remarks]
[Page E194]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


           A BILL TO AMEND THE INTERNAL REVENUE CODE OF 1986

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                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                       Thursday, January 26, 1995
  Mr. CARDIN. Mr. Speaker, today I am introducing a bill to first 
restore, and then to increase, the income tax deduction for health 
insurance premiums paid by those who are self-employed, at a rate of 25 
percent for 1994, and 80 percent for 1995 and thereafter.
  Fully one-quarter of self-employed Americans--3.1 million farmers and 
craftsmen, professionals and small business proprietors--have no health 
insurance. Compared to all other workers, the self-employed are one and 
a half times more likely to lack essential health care coverage.
  As we search for methods to increase access to necessary medical 
services and reduce the crushing burdens of uncompensated care, which 
threaten the fiscal stability of both affected individuals and the 
entire health care system, there can be no doubt that U.S. tax code 
should encourage the self-employed to purchase health care insurance. 
Instead, current regulations discriminate against the self-employed and 
discourage the individual initiative that has always been a bedrock of 
the American economy.
  As part of the expense of employee compensation, businesses can 
deduct the full cost of any health insurance provided to employees. 
Similar treatment of health care premium costs has never been fully 
available to the self-employed. And, unless we act quickly, the loss of 
the limited deduction in effect during recent tax years will soon be 
keenly felt by the self-employed. In order to provide consistent tax 
treatment of medical insurance expenses, my bill restores for 1994 the 
25 percent deduction that has enjoyed nearly a decade of strong 
bipartisan support.
  The availability of this deduction should not only be renewed, it 
should be adjusted equitably. Because businesses, on average, 
contribute--and fully deduct as an expense--80 percent of the total 
cost of employee health insurance premiums, my bill increases the 
percentage of premium costs which can be deducted by self-employed 
persons to 80 percent, effective with tax year 1995. This is similar to 
the provision thoughtfully considered and passed by the Ways and Means 
Committee of the 103rd Congress.
  With approximately 41 million medically uninsured persons in the 
United States currently, measures which encourage working people to 
provide for their health care coverage within the private sector are 
essential. The particular form of an individual's employment situation 
should not determine the tax treatment of health care costs incurred as 
part of the cost of doing business. Rather, as nearly as possible, 
parity of deductibility should be obtained within the tax code.
  In the interests of both fairness and sound health care policy, I 
urge my colleagues to join me in support of H.R. 691.


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