[Congressional Record Volume 144, Number 40 (Wednesday, April 1, 1998)]
[Senate]
[Page S2982]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. BOXER:
  S. 1902. A bill to amend the Internal Revenue Code of 1986 to allow 
the first $2,000 of health insurance premiums to be fully deductible; 
to the Committee on Finance.


                  THE HEALTH INSURANCE TAX RELIEF ACT

  Mrs. BOXER. Mr. President, today I am introducing legislation to 
allow individuals to deduct up to $2,000 a year for the costs of health 
insurance (for themselves and their dependents). If health insurance 
costs are shared by an individual and an employer, the individual could 
deduct the amount of his or her share. If an individual pays the full 
cost of health insurance, the entire amount could be deducted, subject 
to the $2,000 annual limit.
  The Joint Tax Committee has estimated that my bill would reduce 
revenues to the federal government by approximately $11 billion per 
year.


                        Why This Bill is Needed

  Every year, as employers continue to roll back health benefits, and 
as the costs of those benefits keep rising, the number of uninsured 
Americans increases. There are now 41 million Americans lack health 
insurance. That number increases by one million each year. An estimated 
eighty percent of the uninsured are workers or the dependents of 
workers.
  Under the current tax code, corporations can deduct the cost of 
providing health insurance for their employees. The Taxpayer Relief Act 
of 1997 also expanded the deductibility of health insurance for the 
self-employed. Health insurance-related tax deductions for corporations 
and the self-employed are now taken to the tune of about $50 billion 
annually.
  But for the 16 million Americans who purchase health insurance for 
themselves and their dependents, the current tax code is much less 
generous. They may deduct only the cost of health insurance if their 
total health care expenditures exceed 7.5 percent of adjusted gross 
income--a threshold few Americans meet.


                     How the Boxer Bill would Help

  My bill would create an ``above the line'' deduction, which would be 
listed on all tax returns. Taxpayers need not itemize in order to 
receive ``above the line'' deductions.
  The benefit to an individual taxpayer will depend on the amount of 
health insurance expense claimed and on the individual's tax bracket. 
Those claiming the full $2000 deduction could save $300 or more.
  For example, if Jane Doe makes $30,000 a year, has no investment 
income, and pays for her own health insurance, she currently pays, 
$3,476 in federal income taxes. Under my bill, assuming Ms. Doe takes 
the full $2,000 deduction, she would pay only $3,176, a savings of 
$300, or nearly 10 percent of her tax bill.
  Another example is Joe and Sally Smith, a married couple who file 
jointly, have two children, and have a total income of $75,000 a year. 
They purchase an insurance policy that covers the entire family. 
Currently, they pay $10,751 in federal income taxes. Under my bill, 
assuming they take the entire $2,000 deduction, they would pay only 
$10,191, a savings of $560 off their tax bill.
  I hope that senators will join with me to help expand opportunities 
for all Americans to acquire health insurance by cosponsoring this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1902

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Health Insurance Tax Relief 
     Act''.

     SEC. 2. FIRST $2,000 OF HEALTH INSURANCE PREMIUMS FULLY 
                   DEDUCTIBLE.

       (a) In General.--Subsection (a) of section 213 of the 
     Internal Revenue Code of 1986 (relating to medical, dental, 
     etc., expenses) is amended to read as follows:
       ``(a) Allowance of Deduction.--There shall be allowed as a 
     deduction the following amounts not compensated for by 
     insurance or otherwise--
       ``(1) the amount by which the amount of expenses paid 
     during the taxable year (reduced by the amount deductible 
     under paragraph (2)) for medical care of the taxpayer, the 
     taxpayer's spouse, and the taxpayer's dependents (as defined 
     in section 152) exceeds 7.5 percent of adjusted gross income, 
     plus
       ``(2) so much of the expenses paid during the taxable year 
     for insurance which constitutes medical care under subsection 
     (d)(1)(D) (other than for a qualified long-term care 
     insurance contract) for such taxpayer, spouse, and dependents 
     as does not exceed $2,000.''
       (b) Deduction Allowed Whether or Not Taxpayer Itemizes 
     Deduction.--Section 62(a) of the Internal Revenue Code of 
     1986 (defining adjusted gross income) is amended by inserting 
     after paragraph (17) the following new paragraph:
       ``(18) Health insurance premiums.--The deduction allowed by 
     section 213(a)(2).''
       (c) Conforming Amendment.--Section 162(l)(1)(A) of the 
     Internal Revenue Code of 1986 (relating to special rules for 
     health insurance costs of self-employed individuals) is 
     amended to read as follows:
       ``(A) In general.--In the case of an individual who is an 
     employee within the meaning of section 401(c)(1), there shall 
     be allowed as a deduction under this section an amount equal 
     to the sum of--
       ``(i) so much of the amount paid during the taxable year 
     for insurance which constitutes medical care for the 
     taxpayer, his spouse, and dependents as does not exceed 
     $2,000, plus
       ``(ii) the applicable percentage of the amount so paid in 
     excess of $2,000.''
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.
                                 ______