As expected, the National Commission on Fiscal Responsibility has approved a program of tax- and spending-related deficit-reduction measures, but not by a margin large enough to require Congress to act on the plan. Nonetheless, elements of the proposal – including eliminating the special tax status of life insurance products – could appear in future legislative proposals, according to the Investment News.
In a previous blog post, NAIFA President Terry Headley, LUTCF, LIC, FSS, explains why “the incentives built into the tax code encourage and incent people to ‘do the right thing’” when it comes to protecting their families’ financial futures by purchasing life insurance and annuity products.
Further recommendations in the Commission report call for government to reduce, freeze, and eventually eliminate the tax exclusion for employer-provided health benefits. This could have serious consequences for the vast majority of Americans who receive health benefits through their employers. We feel the preservation of the current federal employer deduction and employee exclusions is critical to ensure that families don't lose access to needed benefits.
So while the entire plan won't be coming up for aproval, we’ll have plenty of things to keep an eye on when the new Congress convenes in January.
Addional Resources
- This "MarketPlace" report quotes NAIFA President Terry Headley on the aftermath of the Commission's vote.
- This National Underwriter article discusses some of the implications for health care.