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Not sure if you're suggesting that they will tax those benefits specially or if they'll raise general taxes to cover for the tax-avoidance of those benefits. E
by bmelton 13y ago
Not sure if you're suggesting that they will tax those benefits specially or if they'll raise general taxes to cover for the tax-avoidance of those benefits.
Either way, health care is the precedent here. Wage freezes in WWII resulted from FDR's Executive Order 9328[1] left employers in a lurch. The government had control of all wages, earnings, etc., and those wages were (basically) frozen by position. A tax man made $x, while an ad man made $y, no matter where they worked.
This put employers in a tough spot because, so long as incomes were the same everywhere, hiring was difficult because they couldn't raise wages to attract candidates, so they petitioned the government for an exemption on health care benefits, as a way of attracting new hires and competing in the market place. In competitive industries, as these benefits were given in lieu of free market wages, benefits became fairly lavish, and for competitive positions, health care benefits became the norm even after the wage freezes were eliminated, but the net result was that health care as a benefit grew 700% in a 20 year span.
The sum of all that of course is the system we have now, where health care is so broken as a system that we're going to 'fix it' with more of the same, but that's another discussion.
[1] - http://www.archives.gov/federal-register/executive-orders/1943.html#9328 http://www.archives.gov/federal-register/executive-orders/19...
- walshemj 13y agoI know its one of the reasons the USA didn't end up with a German style insurance based health system in the late 40's early 50's. Taxing the benefits is the fairest way to do it. You could handle this by moving to a system similar to the UK PAYE - any benefits in kind are identified to the Tax man by your employer (via the P60 form) woudl simplify the federal tax system.