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Tax Health Insurance Benefits?
In the USA, in contrast to the entire rest of the industrialized world on three continents, citizens are not guaranteed basic health care as a right of citizenship. Health care - which translates into longevity, quality of life and who gets to see their grandkids grow up - is related directly to the size of one's bank account. You either buy your own health insurance or you have the kind of high-end prestigious job where you are given health insurance coverage by your employer. The people who do some of the most important - but poorly paid, un-prestigious - jobs have no health insurance because they can't do the former and don't have the latter.
The Republican framework for thinking about this is simple: hard-working, morally-worthy people end up with pots of money and prestigious jobs. They have health insurance because they are godly. If you don't have money then ipso facto you are a lazy slob and you deserve to die young.
Too many people have provided too much evidence to the contrary for me to need to do so. It's absurd and if you know people who are working their hearts out (literally) with no health insurance, you know better from personal experience. If you don't, read studies by independent (really independent, not Fox) think tanks or universities.
Who gets hurt by this state of affairs? As our President has pointed out - everyone loses, except the insurance company execs and the overpaid doctors and hospitals. The everyone who loses?
** employees. Yes, your health insurance is free, but your company is burdened with health care costs. Your company can't compete in global markets, the entire US economy is flooded with imports, you lose your job. And your health insurance. The health care burden on US corporations is killing our country and taking your job overseas.
** entrepreneurs. I am a business/careers coach and I can quote dozens of great people who have thrown away their entrepreneurial dreams - and they would have grown into great companies, some of them! - because they could not fold personal and family health care coverage ($4K/Mo for one man) into their start-up plans. I am also an entrepreneur and I personally struggle with this one. Insurance costs are sky-rocketing. More and more of my income is being swallowed by health care costs. Knowing that most of it is going to bloated insurance company profits, instead of my own profits and the taxes that would nurture my community, really angers me.
** the whole community. Insurance companies have overhead of 27%. The Medicare program's overhead is 3%. And people whine about government waste!! The poorer and sicker we are, the less income we can make, the less taxes we can pay, the less community care we can undertake. Our country is built by all of us working hard, working together and caring about each other. Our country IS each other.
So - should employees start seeing their health insurance benefit appearing in the taxable income column?
First - why not? The primary reasons why we should not allow employer-paid health benfits to be a taxed asset are:
1) Hey, I'm struggling enough and
2) I don't need any MORE coming out of my pittance of a paycheck and
3) the heck with the rest of you.
Pretty powerful argument.
Now let's look at why we should tax them.
1) Tax revenues will help offset the costs of enrolling the folks who don't have insurance. Folks who don't have insurance are the folks who were unlucky enough to be in jobs (some of them requiring a college degree) that have been allowed to turn into contingent/contract labor gulags. These folks used to have benefits but their companies found a way to get rid of their benefits and their rights. You will be next. Yeah, you think you're immune, but you're not. The corporate beast has had almost two decades of unfettered time to cut costs everywhere but in the exec suites.
2) Taxing benefits helps the corporations by reducing their own tax burdens. This should help them compete and stay profitable and you will keep your job.
3) Taxing benefits is fair. Yeah, I know, some people don't give a damn about fair, but real patriots do. We can't go on with a two-tiered democracy. We need to all be in here together, as a national family, not a collection of back-stabbing strangers. Most people who get health insurance are in the upper half of US incomes. No, they're not rich, but they're doing better than the average; see #2 in the first list and realize that your paycheck is less of a pittance than most. [These days, if you have a roof over your head and are gainfully employed somewhere, you are doing better than average.] Those who are not paying full retail on the health marketplace are still doing much, much better than I and my fellow entrepreneurs are, bucko, so cut the welfare/lazy bums/etc nonsense. Be grateful. Realize that it's a result of luck, and in many cases helped out by having had middle-class parents that got you where you are. Be grateful. Be grateful. Be grateful.
The powerful interest groups are frantic to gut any chance we have as a nation to get out from under this medical cost octopus. I hope - for ALL our sakes - that they do not succeed. Email your senators and congresspeople. Make the right choice.