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Monday, June 15, 2009

A Tax on Health Benefits?

I just heard a news interview with Sen. John McCain. Everyone was talking in shocked tones about how people may get taxed on their health benefits in order to bring in enough funds to start a national healthcare program.

At first, I was shocked: How could they do such a thing? But this was a knee-jerk reaction. Then I started thinking about it.

Say your income is $30,000 on the books, but your benefits add another $5,000. You're really making $35,000, right? So why should you get $5,000 tax-free when your neighbor might be paying taxes on his $35,000 income and having to get his own healthcare, which adds to the expenses he's incurring?

A tax on health benefits seems fair.

9 comments:

Daniel Hoffmann-Gill said...

Obama has certainky impressed me with the scale of his vision, I have no idea yet whether it is overreach but to try and bring about a nationalised, universal healthcare system to America is a big step in the right direction.

I have no idea whether it is possible but I'll be watching with interest.

Angela said...

I guess I do not know enough about what is going on to be clear on this. What I do know is that my company pays for a portion of my health benefits and then I pay an additional $180/month for them. So what does that mean for me? I have to pay an even larger portion for my healthcare, how is that helping people out?

I think squeezing the people that have healthcare is not necessarily helping anyone out. If it is going to be a national healthcare, then it should be for everyone, so that would take health benefits out of the picture completely, correct?

I think everyone is squeezed tight enough as it is, targeting the middle class and making things even tougher at a time of such immense turmoil cannot be a good idea.

Ed Abbey said...

I'm against it simply for the fact that any government involvement in healthcare is unconstitutional.

Daniel Hoffmann-Gill said...

Ed, are you serious or taking the piddle?

Ed Abbey said...

No joke Daniel. Read up on the 9th Admendment to the Constitution. I think it is one of the often overlooked admendments these days.

Daniel Hoffmann-Gill said...

So government involvement in other areas of life is also unconstitutional?

Seems a bit weird to be to invoke the 9th, I don't buy it personally.

Especially as the 9th is so vague as to be used by everyone from Gun Rights peeps to people who support the right to abortion.

Saur♥Kraut said...

Carry on, everyone. Interesting discussion.

Ange, It would most likely mean that you'd be taxed on the portion you're getting from your employer. In other words, if they're paying $180 a month and so are you, you'd only pay on their portion as it's a benefit and you're paying the remainder with after tax dollars.

Angela said...

So with that thinking what else of my benefits should be taxed? My 401k benefits as well? Should I never have the opportunity to retire? I pay social security but we all know I will never see a cent of that.

As I see it, I already pay enough in taxes for the greater good. Don't tax my very necessary benefits that I work hard for.

daveawayfromhome said...

"I pay social security but we all know I will never see a cent of that."

And 401Ks have turned out to be a terrific investment, havent they? As nice as the money from a 401K may be, the main thing they've done is involve everyone in a need to keep the horserace that is Wall Street solvent, something which mostly benefits the high-rollers, but which we are now forced to do if we want to ever stop working before we die.

Personally, I dont think Wall Street will accomadate us anymore than Social Security will. My advice: be really nice to your kids, and, if they're young enough, start prepping them to take care of you when you're old.