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> The real scam is when things like health insurance premiums are deductible for a company but not for an individual. To be fair, that this "scam" is still ali

by gen220 6y ago

> The real scam is when things like health insurance premiums are deductible for a company but not for an individual. To be fair, that this "scam" is still alive today is mostly by accident. It stems from WWII times, when stateside laborers were uniquely low in supply and high in demand, and when labor had ridiculous bargaining power. Laborers couldn't really ask for higher wages, because that was politically impossible (appearing to be extorting wartime needs for money was/is a faux pas). So companies began competing on "benefits": health, accidental death and disability insurance among them. To help ease the burden on employers and employees, the IRS allowed businesses to "temporarily" deduct insurance premiums. (This relief came against the backdrop of unprecedented wartime tax hikes). Postwar, it was unfeasible to remove this measure, as the majority of Americans who had insurance got it through their employers: it would upset both businesses who have to pay more, and employees who lose insurance. Later, some government (I forget which...) signed this stopgap measure into the tax code, making it permanent. Regardless of the interesting history, I agree with you, it should be universally deductible.

koolba 6y ago
> Regardless of the interesting history, I agree with you, it should be universally deductible. I’m for it being universally not deductible. Or at least not deductible for corporations. The idea is that it forces everyone onto a common public individual market as there would be no tax or cost advantage of corporations to self-insure or provide insurance. Longer term this gives better mobility to workers and lowers costs of the individual market by bringing in 100M+ healthy people (which lowers the average risk weight cost of insurance).
- gen220 6y ago
  Interesting idea. If it were not deductible for anybody, fewer people would have health insurance. If you're in that pool, it's good for you, because it would probably be cheaper. But fewer people would be insured, so it's overall bad, right? Am I'm missing some part of your argument? The idea of making it universally deductible/subsidized for individuals seems to be the path that we're on right now. Case 1: If you purchase health insurance on the exchange, and are very poor, you can get fully-subsidized plans. (Not to mention if you qualify for medicare). Case 2: The most plausible proposals of "Medicare for All" are basically expanding the pool of people who qualify for zero-premium medicare advantage plans. This keeps insurance individualized and operated by private companies to maintain quality improvements driven by capitalistic-competition, although the government is the ultimate payer. Case 3: the government (yes, even the current administration) has taken several steps to encourage employers to subsidize the costs of employees purchasing insurance individually, rather than as a group [see https://www.takecommandhealth.com/ichra-guide https://www.takecommandhealth.com/ichra-guide].
juniper_strong 6y ago
>> Laborers couldn't really ask for higher wages, because that was politically impossible Not just politically impossible, illegal: >> 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." - https://www.chicagotribune.com/opinion/commentary/ct-obamacare-health-care-employers-20170224-story.html https://www.chicagotribune.com/opinion/commentary/ct-obamaca... And, relevant to today's discussion: >> 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. Also interesting to note that the change in question wasn't a switch from workers paying for their own health insurance to it being paid for by employers. Prior to WW2 less than 10% of Americans had any form of health insurance, by the end of the war it was close to 30%.

by gen220 6y ago

koolba 6y ago

> Regardless of the interesting history, I agree with you, it should be universally deductible. I’m for it being universally not deductible. Or at least not deductible for corporations. The idea is that it forces everyone onto a common public individual market as there would be no tax or cost advantage of corporations to self-insure or provide insurance. Longer term this gives better mobility to workers and lowers costs of the individual market by bringing in 100M+ healthy people (which lowers the average risk weight cost of insurance).

gen220 6y ago
Interesting idea. If it were not deductible for anybody, fewer people would have health insurance. If you're in that pool, it's good for you, because it would probably be cheaper. But fewer people would be insured, so it's overall bad, right? Am I'm missing some part of your argument? The idea of making it universally deductible/subsidized for individuals seems to be the path that we're on right now. Case 1: If you purchase health insurance on the exchange, and are very poor, you can get fully-subsidized plans. (Not to mention if you qualify for medicare). Case 2: The most plausible proposals of "Medicare for All" are basically expanding the pool of people who qualify for zero-premium medicare advantage plans. This keeps insurance individualized and operated by private companies to maintain quality improvements driven by capitalistic-competition, although the government is the ultimate payer. Case 3: the government (yes, even the current administration) has taken several steps to encourage employers to subsidize the costs of employees purchasing insurance individually, rather than as a group [see https://www.takecommandhealth.com/ichra-guide https://www.takecommandhealth.com/ichra-guide].

juniper_strong 6y ago

>> Laborers couldn't really ask for higher wages, because that was politically impossible Not just politically impossible, illegal: >> 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." - https://www.chicagotribune.com/opinion/commentary/ct-obamacare-health-care-employers-20170224-story.html https://www.chicagotribune.com/opinion/commentary/ct-obamaca... And, relevant to today's discussion: >> 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. Also interesting to note that the change in question wasn't a switch from workers paying for their own health insurance to it being paid for by employers. Prior to WW2 less than 10% of Americans had any form of health insurance, by the end of the war it was close to 30%.