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Fast-forward to the dawn of the Obamacare utopia. In one of a bazillion little clauses in a 2,000-page bill your legislators didn't bother reading (because, as Rep. John Conyers explained, he wouldn't understand it even if he did), Congress voted to subject the 28 percent tax benefit to the regular good ol' American-as-apple-pie corporate tax rate of 35 percent. For the purposes of comparison, Sweden's corporate tax rate is 26.3 percent, and Ireland's is 12.5 percent. But just because America already has the highest corporate tax in the Organization for Economic Co-operation and Development is no reason why we can't keep going until it's double Sweden's and quadruple Ireland's. I refer you to the decision last year by the donut chain Tim Hortons, a Delaware corporation, to reorganize itself as a Canadian corporation "in order to take advantage of Canadian tax rates." Hold that thought: "in order to take advantage of Canadian tax rates" - a phrase hitherto unknown to American English outside the most fantastical futuristic science fiction.
FYI, we have one of the highest nominal tax rates in the OECD, but with all the breaks, exceptions, credits, and allowances we give, we have one of the lower effective corporate tax rates. Just something to be aware of...
665/.28=2375x.35=831+665=1496.....Over your head, apparently...
The real numbers:
Quote:
In 2011, overall gross costs for prescription drug benefits are expected to be $2,701 on average per Medicare-eligible retiree with employment-based retiree health benefits (Figure 8). After factoring out the $665 MMA subsidy provided by the federal government and tax deduction that employers receive on the cost of retiree benefits as a business expense, the net cost to employers would be $1,090. If the proposed tax change takes effect, employers would pay an additional $233 in U.S. federal income taxes per retiree, resulting in a total cost of $1,323 per Medicare-eligible retiree after the impact of the proposed tax law were taken into account.
This increase in the cost of retiree drug benefits is certain to cause employers to re-evaluate taking the subsidy over other options available to them. Employers may choose to drop drug coverage for retirees and instead pay for Medicare Part D benefits. The average premium for Medicare Part D is expected to be $420 in 2011. After factoring out the tax deductibility of this expense, the real cost to employers would be $315. Moving from offering and paying for retiree drug coverage to simply paying for Medicare Part D premiums would save employers $775 per beneficiary under current law, and $1,008 under proposed law. Moving to Medicare Part D may become even more attractive to employers if the coverage gap is reduced and/or eliminated.
pages 9 and 12 here: http://www.ebri.org/pdf/briefspdf/EB...8_RetHlth1.pdf
Pay particular attention to figure 8 on page 9. Note that in both cases, the EMPLOYER is purchasing the coverage, but if the employer chooses to purchase a part D plan for their retirees, the cost to the government jumps from $665 per senior to $1,209.
So... the gov would rather spend $1209 per senior for prescription coverage than $665? That's exactly what the HCR bill incentivizes.
Dude, it isn't going to matter whose numbers you use so long as there is this gaping hole in your grasp of what are rather simple concepts. If you substiture the EBRI data for those in the popular press, the equation simply becomes...
Do you see the 945 in that table? I bolded it above and it appears in column 1, rows 3 and 8 of the EBRI table, right after the words, Tax deduction of employer cost as business expense. This is the value of the tax deduction that the employer gets to take as the result of paying for the benefit through a corporate plan.
If the employer dumps an employee into Part-D, he no longer has that expense, hence he no longer has that deduction, and federal tax receipts increase by $945. In addition of course, the government does not any longer provide the $665 subsidy payout for that employee, meaning that the government's cash balances are $1610 better off.
Then they'll have a perfectly good explanation of the $1 billion, and everyone will be happy.
With 310,000 employees, I'm pretty surprised its that low, while Congress, seems to be surprised its that high. If everyone will be happy, then explain to me why Congress is calling ATT to a hearing to discuss the "unintended consequences" of the legislation that everyone said existed, but Congress just ignored.
With 310,000 employees, I'm pretty surprised its that low, while Congress, seems to be surprised its that high. If everyone will be happy, then explain to me why Congress is calling ATT to a hearing to discuss the "unintended consequences" of the legislation that everyone said existed, but Congress just ignored.
Sag wants to hear nothing of that.
Waxman is bringing in the CEOs April 23 for "hearings" on how the Democratic Senate and Congress just handicapped our largest industries. It makes one wonder- if they were this carelss at reducing the competitiveness of our major manufacturers and increasing unemployment, what other "suprises" will pop up in this carelessly drafted bill.
Again, Sag-
1. The losses due to maintenance of the retirees is an annual cost
2. The corporations now have the option of-
a. dumping retirees exclusively to medicare (can't with union contracts)
b. laying off existing employees and or not hiring new employees due to increased cost
c. moving manufacturing facilities to other countries
Thanks Barry (the job killer). Saggy, how long does it take to clear out a congressional office with staff? Do they have a "service" that does this? It may be a good buisness come November and in 2012.
With 310,000 employees, I'm pretty surprised its that low, while Congress, seems to be surprised its that high. If everyone will be happy, then explain to me why Congress is calling ATT to a hearing to discuss the "unintended consequences" of the legislation that everyone said existed, but Congress just ignored.
How many of their employees are included in a plan that is affected by cutting out the double-dipping? Is there any difference in coverage that you know of between their union and non-union employees?
Right...a ten-year projection is an example of static analysis.
you mean like the projection back in 1965 on what medicare would cost???????
That year, Congressional actuaries (CBO wasn’t around then) expected Medicare to cost $3.1 billion in 1970. In 1969, that estimate was pushed to $5 billion, and it really came in at $6.8 billion. House Ways and Means analysts estimated in 1967 that Medicare would cost $12 billion in 1990. They were off by a factor of 10—actual spending was $110 billion.......
How many of their employees are included in a plan that is affected by cutting out the double-dipping?
Considering that ATT has a retirement plan for most of their employees, many of these will one day would have been included in such a plan..
Quote:
Originally Posted by saganista
Is there any difference in coverage that you know of between their union and non-union employees?
90,000 of the employees are unionized, so they are a minority of the workforce.. (CWA is the Union).. The difference in actual coverage between the union and non union employees I'm not sure.
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