Sorry, I have to disagree. It is not a tax subsidy for people (or companies) to keep their own money. It never was the government’s money to start with.
Why is it okay to give companies tax subsidies to offer health care?
After all, if you believe health care is a luxury and not a right, then let’s take the employer-based health care insurance premiums off the table. Companies will then have to compete for those qualified workers on their own merits and not the enticement carrot of good health insurance hanging from some stick.
And then those companies will be ‘keeping’ all their money and being taxed on the entire amount of money. I’m sure then we will be hearing their wailing and gnashing of their teeth.
Where is it written that companies should be coddled?
Simply stated, there is no logical reason to exclude the cost of employer provided medical insurance from taxable income (compensation). There would be, imo, something good which could arise from this, namely the realization in monetary terms of the costs of the insurance and the economic benefit thereof to those who are covered by an employer plan.
While I understand itolduso’s argument about tax subsidy, the companies are not “keeping their own money” as such. Instead, the companies are parting with the money to purchase the insurance. Absent a 100% tax rate applicable to income, the deduction claimed therefor does not equal the amount paid in premiums, just as the case would be if the insurance costs were paid out directly as compensation, and thus both the benefit to the companies and the covered employees from an income tax perspective are indirectly “subsidized” due to the current treatment of the premiums under current law.
The main point of the piece, as I read it, was that the idea of there being something fundamentally good about employer provided medical insurance and thus should be mandated (under some “reform” proposals) or otherwise encouraged is a recent development historically, and should be looked at critically to determine if this model, which (again, imo) appears to be broken should be retained. The other points provided were the author’s supporting evidence to buttress his opinion that perhaps it would be better to not retain it and look at something different.
Yep, lilac, I well know. It makes me wonder whether there will ever be any change to the status quo ante whenever I get the laugh.
I fully appreciate the underwriting criteria involved with pre-existing conditions, and understand the insurance risk involved. That said, it is incomprehensible to me that the current system exists in the U.S. given its effect on international competitiveness.
Yeah, I spent a day trying to find insurance for my wife and I.
Most as you said just chuckled and said no way.
Those that would at least discuss it, said the premium would be so high for insurance that would not cover anything less than decapitation. Then there would be a 15 thousand dollar yearly deductible!
Did mention the 500 thousand life time cap too?
While we are talking about subsidies – I would like to see all taxpayer-funded subsidies to companies be stopped.
I’m tired of seeing cities, state and federal government hand over millions of taxpayer dollars to companies to build new plants, expand or whatever the company says they want the money for and then watch as that same company outsource most of the jobs overseas.
Where is the company’s loyalty or gratefulness to the taxpayers? No where to be found.
But you know what, I have yet to see any of those companies refuse to take taxpayer-funded money! They are all there for the handout but they show their true colors when it comes to the bottom line. After all, they need those extra millions to pay their underpaid CEO. The poor thing – he only makes $20 million a year!
So, these companies can keep all their money and they can be taxed on all their money just like the rest of us. If they don’t like that set up, they are always free to take their company to those overseas countries where they sent all the jobs. But, I never see any of them do that either.
Why should they? Then they would not be able to get all the free taxpayer-funded money, now could they?
“The main point of the piece, as I read it, was that the idea of there being something fundamentally good about employer provided medical insurance”
At the risk of going all Blue Jay on you…
The only reason employer provided medical insurance is deemed “good ” is that it keeps so many people on the payroll, as in “under the thumb” of da man.
I have long held that the single best way to encourage entrepreneurship and business (and job) creation would be to make health insurance both affordable and portable.
If everyone was honest, there are tons of people who keep their day jobs only for the insurance.
Oh, yeah, and employer provided insurance is good for the insurance company too. It gives the actuaries the opportunity to say the pool, and hence the risk, is more favorable to the “house”.
‘Cause you know the insurance marketplace is nothin’ but a big damn casino where the house either wins or picks up its marbles and goes home….
PrairiePopulistsAndProgressives.net 
http://www.huffingtonpost.com/d-brad-wright/the-paradox-of-employer-b_b_477917.html
It says it all, succinctly and (imo) accurately.
I agree 100%.
Sorry, I have to disagree. It is not a tax subsidy for people (or companies) to keep their own money. It never was the government’s money to start with.
Why is it okay to give companies tax subsidies to offer health care?
After all, if you believe health care is a luxury and not a right, then let’s take the employer-based health care insurance premiums off the table. Companies will then have to compete for those qualified workers on their own merits and not the enticement carrot of good health insurance hanging from some stick.
And then those companies will be ‘keeping’ all their money and being taxed on the entire amount of money. I’m sure then we will be hearing their wailing and gnashing of their teeth.
Where is it written that companies should be coddled?
Simply stated, there is no logical reason to exclude the cost of employer provided medical insurance from taxable income (compensation). There would be, imo, something good which could arise from this, namely the realization in monetary terms of the costs of the insurance and the economic benefit thereof to those who are covered by an employer plan.
While I understand itolduso’s argument about tax subsidy, the companies are not “keeping their own money” as such. Instead, the companies are parting with the money to purchase the insurance. Absent a 100% tax rate applicable to income, the deduction claimed therefor does not equal the amount paid in premiums, just as the case would be if the insurance costs were paid out directly as compensation, and thus both the benefit to the companies and the covered employees from an income tax perspective are indirectly “subsidized” due to the current treatment of the premiums under current law.
The main point of the piece, as I read it, was that the idea of there being something fundamentally good about employer provided medical insurance and thus should be mandated (under some “reform” proposals) or otherwise encouraged is a recent development historically, and should be looked at critically to determine if this model, which (again, imo) appears to be broken should be retained. The other points provided were the author’s supporting evidence to buttress his opinion that perhaps it would be better to not retain it and look at something different.
But more and more companies are not offering health insurance – so that leaves out alot of people to go get their own health insurance.
And there is the problem. Try purchasing health care insurance when you have a pre-existing condition. You literally get laughed at over the phone!
Yep, lilac, I well know. It makes me wonder whether there will ever be any change to the status quo ante whenever I get the laugh.
I fully appreciate the underwriting criteria involved with pre-existing conditions, and understand the insurance risk involved. That said, it is incomprehensible to me that the current system exists in the U.S. given its effect on international competitiveness.
Yeah, I spent a day trying to find insurance for my wife and I.
Most as you said just chuckled and said no way.
Those that would at least discuss it, said the premium would be so high for insurance that would not cover anything less than decapitation. Then there would be a 15 thousand dollar yearly deductible!
Did mention the 500 thousand life time cap too?
While we are talking about subsidies – I would like to see all taxpayer-funded subsidies to companies be stopped.
I’m tired of seeing cities, state and federal government hand over millions of taxpayer dollars to companies to build new plants, expand or whatever the company says they want the money for and then watch as that same company outsource most of the jobs overseas.
Where is the company’s loyalty or gratefulness to the taxpayers? No where to be found.
But you know what, I have yet to see any of those companies refuse to take taxpayer-funded money! They are all there for the handout but they show their true colors when it comes to the bottom line. After all, they need those extra millions to pay their underpaid CEO. The poor thing – he only makes $20 million a year!
So, these companies can keep all their money and they can be taxed on all their money just like the rest of us. If they don’t like that set up, they are always free to take their company to those overseas countries where they sent all the jobs. But, I never see any of them do that either.
Why should they? Then they would not be able to get all the free taxpayer-funded money, now could they?
It was one of the most memorable conversations I have had.
Mike was a school board member and I had known him for years before.
As an employee of the school district I was given an option of either $160 going toward the monthly premium or the money added to my wages.
since taking the insurance would mean my monthly take home would be about $260 the choice was clear.
Then the board voted to resend the cash option, which meant a dollar and a half an hour cut in pay.
When I again see Mike I confronted him about it:
“it was never meant to be considered to be part of your wages”.
“Mike I sure wished you would have informed the IRS because they have been taxing me on it!”.
“Well Classified got the largest raise a whole 3 percent. (this was adding 20 cents and taking away 1.50)
“ you took a dollar and a half and gave me 20 cents, Mike I hated math and even I know that is a pay cut!”
“Well it was never meant to be considered to be part of your wages!”.
“Mike you throw a drowning man a rope, he is not going to take the time to consider your motivation.
Your intent may have been to hang him with it, but he is still going to be glad you threw the rope!”.
Taxing people for income that they do not see or can not pay bills or buy food with is the same as taxing them for their neighbor’s income.
Or taxing them for the money they might have made but did not.
Taxing for the thinking that there is an entitlement of the Government is wrong.
It makes as much sense as if they included taxing human flatulence under cap and trade.
I met omawarisan today — he is a soft spoken, quick witted man who is interesting and fun — I very much enjoyed meeting sans keyboards!
I’m enjoying my visit and seeing this new (to me) place.
Glad you made it out here, enjoyed it very much! Bring heat next time, it isn’t supposed to be this cold here. Have a safe trip back!
“The main point of the piece, as I read it, was that the idea of there being something fundamentally good about employer provided medical insurance”
At the risk of going all Blue Jay on you…
The only reason employer provided medical insurance is deemed “good ” is that it keeps so many people on the payroll, as in “under the thumb” of da man.
I have long held that the single best way to encourage entrepreneurship and business (and job) creation would be to make health insurance both affordable and portable.
If everyone was honest, there are tons of people who keep their day jobs only for the insurance.
Oh, yeah, and employer provided insurance is good for the insurance company too. It gives the actuaries the opportunity to say the pool, and hence the risk, is more favorable to the “house”.
‘Cause you know the insurance marketplace is nothin’ but a big damn casino where the house either wins or picks up its marbles and goes home….
Oh and JR, if you are reading here, that wasnt meant as a shot at you. I agree with the sentiment!