The White House sent out another trial balloon yesterday, to test their latest idea of how to shift the tax burden from the Investment Class onto the backs of Labor.
At least it will not increase the deficit!
The proposed rule change would protect more captial gains and interest income from being taxed, while eliminating the write-off businesses can take for the health care insurance they may provide for their employees. What does this mean for the average wage earner?
Working men and women enjoy many benefits that are not directly reflected in their cash salary or wages. Employers are responsible for paying about half of the FICA tax for example (social security tax), and many are still able to provide some health care coverage. Businesses deduct these payments as expenses, reducing their profits, and so reducing the tax they pay.
By eliminating the deduction that may be taken for health care insurance premiums, many businesses will simply stop providing this benefit. Furthermore, they will likely not increase the pay of their employees by transfering what had been 'hidden' wages into thier paychecks (which would still qualify for a deduction).
While it is true that wage earners could deduct their out-of-pocket payments for health insurance on their Schedule A, how many of them are going to be able to afford to pay the premiums?
This obvious give-away to the already wealthy is just simply ridiculous, and beyond the additional financial hardship placed on wage earners, it will certainly result in more of our nation's citizens joining the 43 million that already do not have any health care insurance.
We can head this off while it is still a trial balloon. Get our yer pea shooter and bug your Congressmen and Senators.