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The reason for the penalty is because people will use medical services, and it forces payment into the system. I'm actually surprised the Republicans were so against it, they despise freeloaders.
Wage earners without insurance are already subsidizing (through taxes) wage earners with employer-provided insurance.
Perhaps the latter should start paying their fair share of taxes.
e.g.
Worker A earns $20K cash (taxable) plus $10K health insurance (untaxed) = $30K total compensation
Worker B earns $25K cash (taxable) with zero benefits = $25K total compensation.
A receives greater total compensation than B, and pays less tax than B, who now gets hit with a tax penalty on top of his taxes already higher than A's.
Yep, my daughter got her meager refund decimated by the penalty. She makes minimim wage, works 28 hours a week and didn't qualify for any subsidy because *I* make too much money. She has to live at home because she cannot make enough to afford to live on her own. She is too old to claim as a dependent on mine. She used to take her refund and pay bills, buy some clothes. etc. Now she cries and cries. They won't give more hours to work no matter how much she begs them.
Thanks o for the fundamental transformation. Keep the change.
How does your income affect whether your daughter qualifies for a subsidy? Your daughter sounds like the kind of person Obamacare was designed to help. You need to ask yourself what is the reasoning behind preventing your daughter getting a subsidy. Remember all the back and forth negotiations to get Obamacare through congress?
My ex makes about 15K per year and pays $20/month for an awesome health insurance plan, way better than my employer sponsored plan. So there are some "success" stories.
Wage earners without insurance are already subsidizing (through taxes) wage earners with employer-provided insurance.
Perhaps the latter should start paying their fair share of taxes.
e.g.
Worker A earns $20K cash (taxable) plus $10K health insurance (untaxed) = $30K total compensation
Worker B earns $25K cash (taxable) with zero benefits = $25K total compensation.
A receives greater total compensation than B, and pays less tax than B, who now gets hit with a tax penalty on top of his taxes already higher than A's.
Yeah this one never made sense to me. Why are payments to employer sponsored plans tax deductible, but if an individual pays their own insurance, it is not deductible? (excepts as a Schedule A medical expense I believe)
Yep, my daughter got her meager refund decimated by the penalty. She makes minimim wage, works 28 hours a week and didn't qualify for any subsidy because *I* make too much money. She has to live at home because she cannot make enough to afford to live on her own. She is too old to claim as a dependent on mine. She used to take her refund and pay bills, buy some clothes. etc. Now she cries and cries. They won't give more hours to work no matter how much she begs them.
Thanks o for the fundamental transformation. Keep the change.
The solution is for her to manipulate her allowances/deductions so that she does not get a refund and instead has to pay a few dollars when filing her taxes. The penalty can only be extracted from any potential refund. If no refund is due, then the govt can't get its penalty. She will get more money in her weekly paycheck so that is better anyway.
Yeah this one never made sense to me. Why are payments to employer sponsored plans tax deductible, but if an individual pays their own insurance, it is not deductible? (excepts as a Schedule A medical expense I believe)
ACA originally required that luxury insurance plans to pay tax beyond certain amount, aka Cadillac tax. The law, which was set to be effective in 2017, is now delayed by 2 years.
My employer is self insured but our population is less healthy than the average. So would I pay $450/on health insurance premium with an annual family deductible of $6000. My question for the tax is: how can you set a number without considering the actual condition of the population?
In addition, the law itself is very murky. It seems like FSA will be considered part of the premium and subject to tax but HSA may or may not be included. This is why employers are pushing for the HSA plans in a big way.
Wage earners without insurance are already subsidizing (through taxes) wage earners with employer-provided insurance.
Perhaps the latter should start paying their fair share of taxes.
e.g.
Worker A earns $20K cash (taxable) plus $10K health insurance (untaxed) = $30K total compensation
Worker B earns $25K cash (taxable) with zero benefits = $25K total compensation.
A receives greater total compensation than B, and pays less tax than B, who now gets hit with a tax penalty on top of his taxes already higher than A's.
How it is worker A's fault that worker B did a poor job of negotiating their salary, assuming the jobs are the same?
How it is worker A's fault that worker B did a poor job of negotiating their salary, assuming the jobs are the same?
Government should not be using the tax code to favor some forms of compensation over others. Simple as that.
In the hands of government, one man's incentive is another man's penalty.
If government insists on imposing one of these penalties, it shouldn't impose the other, i.e. you could argue that uninsured workers should pay one tax penalty but not both.
In the minimum wage sector, it's take-it-or-leave it, nothing to negotiate.
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She will get more money in her weekly paycheck so that is better anyway.
