There has been a movement to repeal the Health Insurance Tax (HIT) on fully-insured premiums, and now comes a new bi-partisan effort in Congress. An effort last year failed.
The part that confuses me is why you would tax premiums in the first place. Besides the current tax write off, in 2014 most premiums would be subsidized. So the government wrote a bill to subsidize premiums and then will tax those same premiums on the back end. Why not just do nothing; or if that doesn't generate enough subsidy, just reduce the subsidy by the amount of the HIT tax?
Besides creating more work for CPAs and greater opportunity for fraud, the subsidy/tax combination accomplishes nothing. Giving someone a dollar then taxing them a dollar is just wasting time.
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