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State of the Union: Health insurance, tax breaks & Social Security

On Tuesday, during the President’s State of the Union address, President Bush is going to be discussing, among other things, three items that relate to some of the issues often discussed on personal finance blogs. Just wanted to give a heads up in case you were planning on watching the State of the Union and wanted a score card.

Health insurance deduction

In an attempt to help more Americans obtain health insurance, the President will propose a plan in which each citizen will be able to deduct $7,500 ($15,000 for families) from their taxes and employer paid medical insurance will become taxable. What this means is that everyone who doesn’t get insurance help from their employer will get that help from the government and everyone who does will now pay taxes (if their benefit exceeds the deduction) on what is now a tax-free benefit. Personally, while I may find myself owing a little more in taxes, I think it’s better for the country as a whole to have more individuals covered by medical insurance.

Making tax breaks permanent

President Bush would like to make permanent those tax breaks currently set to expire in 2010 such as the lower rates on income tax, capital gains, and dividends. I think that some of those breaks unnecessarily benefit the wealthy (not many low income earners find themselves investing in stocks, they’re investing more in groceries).

Social security shortfall… your poor ugly stepsister/brother

While there were no hints as to what they were going to do, apparently the President will ask Congress to work with him to try to solve the shortfall issue – though Democrats have called his individual accounts plan a “non-starter.”

Source: CNN Money [3]