Tax Policy as Social Policy: Cafeteria Plans, 1978–1985
- 1 August 1987
- journal article
- Published by Duke University Press in Journal of Health Politics, Policy and Law
- Vol. 12 (4) , 609-664
- https://doi.org/10.1215/03616878-12-4-609
Abstract
Since the passage of Section 125 of the Internal Revenue Code in 1978, cafeteria plans have offered employees a choice of tax-free fringe benefits. Although these plans have been popular with employers and employees, Treasury Department officials and many tax lawyers soon came to regard Section 125 as a mistake. The Treasury has tried to reclaim through regulation the revenue and the fundamental principles of tax law it had asked Congress to give away in 1978. This paper is a history of Section 125 that emphasizes its relationship to health policy. On the basis of interviews and printed primary sources, the paper argues that Treasury officials made a less than rigorous assessment of the impact of cafeteria plans because they were preoccupied with a larger agenda of making tax-free benefits more equitable. Moreover, they saw no reason to collaborate with the health policy community to plan this agenda; they saw themselves as implementing a social policy already in the Internal Revenue Code.Keywords
This publication has 3 references indexed in Scilit:
- Altering the Tax Treatment of Employment-Based Health PlansThe Milbank Memorial Fund Quarterly. Health and Society, 1981
- Federal Income Taxation of Employee Fringe BenefitsHarvard Law Review, 1976
- Pathways to Tax ReformPublished by Harvard University Press ,1973