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View Diary: Response to Meteor Blades -- Progressive Health Care Lines in the Sand (32 comments)

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  •  Except (1+ / 0-)
    Recommended by:
    714day

    Should an administrative assistant earning $40,000/yr. who purchases individual health insurance because her employer doesn't offer her health insurance have to pay taxes on her health insurance while the senior manager at a mid-size to larger firm earning $250,000/yr. get his employer-provided health benefits tax free?  That doesn't see fair and just to me.

    •  Exactly. (3+ / 0-)
      Recommended by:
      714day, jim bow, tardis10

      The system we have is deeply unfair.

      But it's politically extremely difficult to remove a benefit once it's given. Try explaining to the administrative assistant earning $40,000/yr who does have employer health coverage that their take-home pay is going down because their benefits will be taxed.

      Maybe we should replace the tax exemption on employer contributions with a non-refundable tax credit that phases out above a certain earnings level. That seems fairer to me.

      In America, 60% of bankruptcies are because of medical bills, and 80% of those people had health insurance

      by sullivanst on Tue Aug 11, 2009 at 12:43:19 PM PDT

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      •  Oh, and... (2+ / 0-)
        Recommended by:
        714day, tardis10

        make the credit applicable not just to employer contributions but say 80% of the total premium, so that way those poor souls who are adrift with the sharks in the individual market also get some relief.

        In America, 60% of bankruptcies are because of medical bills, and 80% of those people had health insurance

        by sullivanst on Tue Aug 11, 2009 at 12:45:04 PM PDT

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    •  So give the admin the same tax benefit (0+ / 0-)

      that the senior manager is getting, and raise the senior manager's marginal tax rate to make up the difference.  Better that than taxing employer-provided health benefits - most people who get that tax benefit aren't making $250k a year.

      -7.12, -7.54 / "Health care reform will never take place until Rahm Emanuel is strangled with the entrails of Frank Luntz." - Diderot

      by Big Tex on Tue Aug 11, 2009 at 06:50:42 PM PDT

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      •  That doesn't work since ... (0+ / 0-)

        ... the amount of a person's premium which taxpayers subsidize is equal to the person's marginal tax rate.  The higher the marginal tax rate -- the greater percentage the taxpayers subsidize.

        And if you give everyone a tax deduction to purchase private insurance, then employers will just drop coverage, and you'll have to start subsidizing people who get their health insurance through their employer.  The cost would be so enormous that the well of people earning above $350,000 would be enough to tax.

        •  Re: extending the tax deduction (0+ / 0-)

          That doesn't work since the amount of a person's premium which taxpayers subsidize is equal to the person's marginal tax rate.  The higher the marginal tax rate -- the greater percentage the taxpayers subsidize.

          Let me rephrase what I said above - what I mean is, we should give the admin the same access to the tax benefit that the senior manager has.  Obviously the amount of the tax benefit is going to be lower for people who pay less in taxes, but the idea is to make things more fair and just without taxing employer benefits.

          And if you give everyone a tax deduction to purchase private insurance, then employers will just drop coverage, and you'll have to start subsidizing people who get their health insurance through their employer.  The cost would be so enormous that the well of people earning above $350,000 would be enough to tax.

          I don't see where you're getting that employers would drop their health coverage if we extended the tax deduction to people in the individual market.  It doesn't seem like doing that would have any effect on their bottom line, so I don't see what their motivation would be for doing so.

          -7.12, -7.54 / "Health care reform will never take place until Rahm Emanuel is strangled with the entrails of Frank Luntz." - Diderot

          by Big Tex on Tue Aug 11, 2009 at 07:18:36 PM PDT

          [ Parent ]

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