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View Diary: Health Reform Capitulation Will End SCHIP? (178 comments)

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  •  What tax subsidy? (0+ / 0-)

    You must have left something out. Pretend we just met and you're actually trying to convince me. I don't see how not being taxed on my health care benefits equates to my receiving a tax subsidy.

    History will not forgive us if we do not try and convict the neocoms for their crimes, every last one of them...

    by Jesterfox on Wed Jul 29, 2009 at 12:15:52 PM PDT

    [ Parent ]

    •  Okay (0+ / 0-)

      Any item that receives preferrential tax treatment for consuming a particular good or service over all other goods and services is a tax subsidy.  The child tax credit is a tax subsidy to purchase child care.  The mortgage deduction, which President Obama proposed reducing in order to pay for universal health insurance, is a subsidy to purchase a home; those who rent don't get this tax subsidy.  The charitable deduction, which President Obama also proposed reducing, is a subsidy to give to charity.  All these items give tax preference over doing something like ... buying groceries or renting an apartment.  So they are subsidies through the tax code.

      The employer exclusion is a tax subsidy for employers to buy health insurance through their employees.  You don't get this tax subsidy if, for example, you work at 7-Eleven, and your employer doesn't offer you health insurance, and you purchase health insurance through the individual market.  In other words, because of the employer exclusion, someone who earns $40,000/yr., and gets their $15,000 health plan through their employer has a higher after-tax income than someone who earns $55,000/yr., and purchases the $15,000 policy on their own; hence, the employer exclusion is a tax subsidy.

      Does this make sense to you?

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