Another Obamacare tax
We have posted about this before, but, a caller to Jim’s show on Thursday, prompts another look.
The caller explained that his W-2 (as does everyone else who has employer provided health insurance) now includes a line for insurance benefits paid by his employer on his behalf. The caller wondered why this was. I doubt he will like the answer.
Those in Congress whose stated purpose is to tax and spend have always been very annoyed that some employers provide insurance to their employees, but, the employee doesn’t pay taxes on the value of that benefit. Look at the gusher of revenue to the federal government were those payments taxable. Obamacare fixes all that in a two step process.
Beginning in 2018, if you have employer provided insurance where the benefits exceed $10,200 as an individual, or $27,500 for a family, you will pay an excise tax on all benefits in excess of those minimums. This is what they have fondly called the “cadillac insurance tax”.
The other thing that needs to happen is that lots of folks need to be subjected to this tax to generate the tax revenue gusher. The second step in Obamacare to insure this “windfall” is to make sure that employer provided insurance becomes “pricey”. This is accomplished by mandating that all kinds of coverage (like it or not) be included in insurance coverage to avoid the tax for failing to have government mandated coverage.
Voila…the government mandates all kinds of coverage, thus driving the price up, and then the government taxes you for having pricey insurance once that price is driven up…by the government. Here are some examples:
- A business employee on a family plan would owe $86,905 in additional taxes from 2018-2028
- A police officer on a family plan would owe $53,907 in additional taxes from 2018-2028
- A teacher on an individual plan would owe $20,807 in additional taxes from 2018-2028
I certainly can’t vouch for the validity of those numbers, but, I hope you get the picture.
If you don’t have perfectly perfect insurance coverage as demanded by the government, you pay a tax for failing to do so. But, if you do, and your insurance is provided by your employer, you may end up paying a tax for complying with government demands.
Can anyone say Catch 22?
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