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But as important as the size of government is its shape. It’s valid to insist that, before governments seek to raise more revenues from the taxpayer, they should first give evidence that existing revenues are well spent: new spending is best financed out of old.

But that is not the same as objecting to any and all tax changes, however much there may be to recommend them otherwise, merely because they happen to yield more revenue. The point is to reduce needless government intrusion in the economy; a failure to tax where a tax is warranted is as much a distortion as the imposition of one where it is not.

At base, the argument for taxing employee health benefits as income is simple: they are income. Like any benefit, they have a value that can be expressed in dollars. They are a part of the total compensation package unions negotiate on behalf of their members, the same as salary (or, for that matter, life insurance, which oddly enough is taxable).

Indeed, rather than purchase health insurance on your behalf, your employer might have paid you the same amount in cash, with which to purchase it yourself.

Had it paid you in cash, however, it would have been taxable to you, and so to provide you with the equivalent to your current health benefit, after-tax, your employer would have had to pay you an additional amount to cover the tax. The non-taxation of benefits, then, is as much a subsidy to employers as it is to employees, allowing companies to pay their workers more than they could otherwise, and charge the difference to the taxpayer: that is, to those in other workplaces, not so well favoured. Indeed, that’s a big part of why companies provide them.