Friday, November 20, 2009

health insurance tax raises wages

Ezra Klein links to and discusses latest from Jon Gruber describing how the Senate tax on health insurance increases wages. The point of the tax on health insurance is for people to avoid it by choosing lower levels of health insurance. They have incentive to do this because no longer are all premiums paid by employers tax free income...and if the marginal amounts of premiums (above $23k for familes, 8.5k for individuals) are taxable there will be incentive to have less insurance and more wages. This reduces the amount of insurance, lowering health care costs while increasing taxable wages. Gruber estimates net wages rise by $234 Billion from 2013-2019, or about $700 per year per worker.

1 comment:

  1. Veeeeerrrry Baaaaaaad news, This will directly impact peoples...
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