A tax break that only affects a portion of the population can be easily construed as 'welfare' for those affected by said tax break.
Agreed and from a purely free market perspective, it can be seen as a market intervention which skews the market place by using the State to create a false monopoly as opposed to one that naturally arises from product or service supremacy that benefits the consume of. Such actions by the State on behalf of market actors shift the true costs away from the actual consumers of said service or product and place it on the back of the larger collective.
In the case of employer healthcare tax deduction, American Enterprise Institute Resident Fellow Tom Miller in
a piece for National Review Online argued the 1940's IRS ruling that employer provided health beenies were not taxable income, later codified in the 1954' Tax Code skewed the health insurance marketplace which in one unintended consequence covered up the transparency of market pricing too the negative. Miller argues for the termination of the employer healthcare exemption (I agree) and I would also add in the real estate interest deduction which IMO helped to artificially inflate real estate prices. Even the marriage exemption which has helped to fuel the great marriage debate, (Marriage definition) may have never needed to be debated in the first place had it never existed, the tax exemption that is. Economic and State planners however understood the end product of marriage was more little taxpayers so like a good farmer, actions were taken to produce more yield.
Maybe the Matrix scenario isn't as far off the mark in fantasy as we think!
End the state privileges and the arguments disappear and then the debate comes down to just what we want gov't to do and what does that cost us. Many ills in society IMO are the effects from market interventions on behalf of others done so by the State.
I believe in zero costs but that's just me!
Continuing, Miller points out this effect (tax exemption) makes health insurance cost higher which affects the poor or low end of society's pay scale and it raises the true costs for all of us over time. If healthcare costs weren't ever increasing as they are even now thus raising employer costs for health beenies, there might be more money for wage increases which itself helps the working poor.
From this one could pose the question seems to me, does this insurance system (employer paid health insurance) create a kind of price floor support on behalf of ever rising healthcare costs (I think it does) which the uninsured who could on some level at one time pay out of pocket for some basic healthcare now are forced to either forego care or to access care where they can on the terms of others whatever that may be? Some of that might be forcing others to pay for them so to speak but not always.
The previous system prior to ACA was broken, badly broken as a matter of fact and its been broken for a very long time, very long. I would argue on some level it began with Abraham Flexner so when I say long time I mean long time. Question remains open if the recent fix just created another set of unintended consequences or not and the same forces who benefited previous will still benefit going forward to the harm for the rest of us. Even with ACA as noble as the intent might have been, the same market forces who've always benefited from market intervention will still do so thus I remain extremely skeptical long term.