Accession Number : ADA290716

Title :   TAX POLICY: Effects of Changing the Tax Treatment of Fringe Benefits.

Corporate Author : GENERAL ACCOUNTING OFFICE WASHINGTON DC GENERAL GOVERNMENT DIV

PDF Url : ADA290716

Report Date : APR 1992

Pagination or Media Count : 113

Abstract : This year the Department of the Treasury is expected to forgo about $91 biffion in tax revenues because employer-provided fringe benefits are excluded from taxable income. The size of these tax expenditures as well as the uneven coverage of employer-provided fringe benefits across the workforce have prompted proposals to change their tax treatment in an effort to either (1) restrict the extent of subsidized benefits to reduce the deficit or lower income tax rates or (2) expand benefit coverage. Before attempts are made to change the current tax treatment, GAO believes that an evaluation of the current system of fringe benefit tax subsidies would be beneficial. For this review, GAO focused on (1) the history and background of the tax-preferred status of these benefits, (2) the percentage of workers receiving benefits and the types of benefits received, (3) estimated taxes forgone for these benefits, and (4) how changes in employee benefits tax policy might affect tax equity among different groups and the level of benefits provided. This report describes selected fringe benefits and contains statistical information about employers who provide them and employees who receive them. In this report, GAO also discusses implications of changing the tax treatment of fringe benefits, focusing particularly on some representative types of proposals that proponents say will achieve particular equity and efficiency goals. However, GAO does not take a position on whether changes in fringe benefit tax policies should be adopted.

Descriptors :   *STATISTICAL DATA, *TAXES, *FRINGE BENEFITS, POLICIES, EMPLOYMENT, ESTIMATES, PERSONNEL, WORK, BENEFITS, LOW RATE, INCOME.

Subject Categories : Government and Political Science
      Economics and Cost Analysis

Distribution Statement : APPROVED FOR PUBLIC RELEASE