@okie,
A comment on my previous post, which mentions "tax-subsidized employer spending on health care." That point is an excellent point which has often been overlooked. For example, if the government began to subsidize employer spending on homeowners insurance or auto insurance for its employees, what would happen to those industries as well? I believe the answer should be obvious. I believe it would cause an unprecedented rise in costs for those types of insurance, along with additional problems and nuances arising within those industries that would complicate their availability and quality, along with the price. Or what if employers subsidized lawn care for their employees, and the government provided tax breaks? Let your imagination be your guide in terms of how screwy things would become simply to get your lawn mowed from then on.
I think that John McCain did in fact propose making employer benefits like paying for health insurance a taxable item, and even conservatives attacked him for that, but it made sense to me at the time as a simple suggestion to make the policy more fair. After all, if an employee is compensated, it is income, whether it is in cash or a subsidization of something else, it should make no difference, it is still compensation, which is income, which should be taxed by the income tax system.