Sunday, October 31, 2010

Why is employer paid health insurance not taxed as a part of wages?

Companies that provide health insurance deduct what they pay as an expense and their employees don't pay taxes on a huge benefit. That makes health care for those with employer paid health insurance almost free for them. Why shouldn't your employer pay for your auto insurance, too? Why is this fair to those that have to pay their own medical bills? What type of socialism is this? Cogent arguments only, please.
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when employer paid medical insurance started it was because employees were taxed on their wages and often giving them a pay raise resulted in changing the employees tax bracket and could result in less take home pay. so the unions and corporations began using fringe benefits instead of pay raises to compete for the best employees these included health ins. vacation pay and sick pay retirement plans vision care and dental care all paid for by the company. the employe got something that he could use without paying taxes on the money to buy it and the company deducted it as labor expense same as a wage increase.
Source

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