Favorable tax treatment given to health insurance premiums

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During his 2008 Presidential campaign, Sen. John McCain argued for reforming health insurance system by ending the favorable tax treatment given to health insurance premiums, and instead providing everyone with a subsidy of up to $2500 to purchase health insurance. Illustrate the effect of this policy change on an employee's budget constraint. Be sure to label the intercepts and any other relevant points on this modified constraint. Let M represent the employee's income.

Reference no: EM131424827

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