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Fun fact: in order to get around this, people were paid at least some of the difference in perks: (company cars, steak dinners, health insurance, etc.) The exc
by maxharris 7y ago
Fun fact: in order to get around this, people were paid at least some of the difference in perks: (company cars, steak dinners, health insurance, etc.)
The excessive taxes of the 40s and 50s were directly responsible for the linking of health care to employers (which is the direct cause of the current healthcare mess we're in):
"The idea that employers should provide health care benefits has a long, if checkered, history. Railroads and other rough-and-tumble firms experimented with 'industrial clinics' in the late 19th century, and Montgomery Ward, the mail-order giant, rolled out the first group health insurance early in the next one. But there was almost no indication for decades that employer-sponsored health insurance would spread from sea to shining sea.
World War II disrupted those trends. As demand for everything — particularly labor — climbed, Congress passed the Stabilization Act of 1942, which allowed the president to freeze wages and salaries for all the nation's workers. A day after its passage, President Franklin Roosevelt issued an executive order invoking these powers, which applied to 'all forms of direct or indirect remuneration to an employee,' including but not limited to salaries and wages, as well as 'bonuses, additional compensation, gifts, commissions, fees.'
But there was an exemption of massive proportions slipped into a fateful clause: 'insurance and pension benefits' could grow 'in a reasonable amount' during the freeze.
As companies struggled to deal with wartime labor shortages, the wage freeze left them in a serious bind: How could they retain workers if they couldn't give raises? If they didn't soon realize the allure of fringe benefits, insurance companies pressed that case through marketing campaigns, as historian Jennifer Klein has observed.
The Revenue Act of 1942 triggered another rush to enroll employees in health plans. By slapping corporations with tax rates of 80 or even up to 90 percent on any profits in excess of prewar revenue, Congress all but guaranteed a frenzied search for loopholes. Employee benefits, according to the new law, could be deducted from profits. As an anonymous employer observed in a study published on trends in health insurance, 'it was a case of paying the money for insurance for their employees or to Uncle Sam in taxes.'
In 1943, two rulings helped accelerate the movement toward employer-sponsored health insurance. The first was a directive by the Internal Revenue Service that employees did not have to pay taxes on premiums paid by their employers. The second was a decision by the National War Labor Board reaffirming the exemption of fringe benefits from the wage freeze.
After the war, a series of administrative and legal rulings kept these incentives in place, despite several attempts to reverse them. Meanwhile, the number of people enrolled in health insurance plans skyrocketed, with most of the growth driven by corporate group policies. In 1940, only 9.8 percent of Americans had some kind of medical insurance; by 1946, the number had grown to just under 30 percent."
That quote is from this article (note that I can't vouch for the rest of this article, the only part I read and know to be true is the part I quoted):
https://www.chicagotribune.com/opinion/commentary/ct-obamacare-health-care-employers-20170224-story.html https://www.chicagotribune.com/opinion/commentary/ct-obamaca...