Posted on 06/09/2008 1:22:26 PM PDT by Southack
Gov. Bob Riley is scheduled to sign a law Tuesday that provides tax incentives to help small businesses afford health insurance for employees.
The incentive is part of the governor's Plan 2010 agenda that was passed by the Alabama Legislature during the special session in May.
Under the legislation, owners of small businesses with fewer than 25 employees will be able to deduct 150 percent of the amount they pay for health insurance premiums from their state income taxes. Employees of these small businesses who earn less than $50,000 a year will also be able to deduct 150 percent of the amount they contribute toward their health insurance plans from their income taxes.
The proposal will help small businesses lower their health care costs and also encourage more small firms to offer health coverage to their workers, a news release said.
subsidies are socialism, socialism are subsidies.
Wait! Isn’t this the same governor’s office that, MS(Most Slanted)NBC says, Karl Rove schemed and cheated to get into Republican hands? And they’re actually accomplishing things? Imagine that!
-Wm Tate,
http://www.atimelikethis.us/
...and ideological purity is a fool’s errand.
*so back at ya!
I don't pay taxes on my employer-provided health care benefit. Is that a subsidy?
“subsidy?”
They’re actually being paid MORE than the cost of the premium by the gubmint. I can think of worse uses for tax money but yes, it’s a subsidy.
All this is going to lead to is higher insurance premiums because the taxpayer is picking up the cost. Like college and housing, anything the government subsidies will lead to a run up in the price.
Health Insurance Rates for Small Business Rise 50%
The only people cheering will be insurance company executives, and their bought-and-paid-for RINO political TOOLS.
Cost of premium = $100 (for instructional purposes)
Deduction = $150
Very nice enticement for businesses to move to that state and to provide coverage for their employees, but still very much a subsidy.
It sounds like it on the surface, but a 150% *deduction* of taxable income base from your 4% state income tax amounts to a fraction of the actual cost of health insurance.
$100,000.00 taxable income base
* 4% income tax (might just be 2%, I forget)
=
$4,000 taxes owed to state under old tax code
Cost of health care = $100
Alabama health deduction = 1.5 * $100 = $150
Means
$100,000 taxable income
- $150
=
$99,850 taxable base income
*.04
equals $3,994 owed to state under new Alabama tax plan
*hypothetical example and numbers, but the math is real and demonstrates that no subsidy is directly involved
Some people can’t do math.
See posts #14 and 15.
See post #14.
I understand purists who know that they are simply a type of compensation, like 401k’s etc. However, in the world of health insurance, there are many advantages to group purchasing.
The agent's commission alone on a “group” plan of just two employees drops from 20% for individual coverage, to just 7%.
However, even at a third of the commission, I would gladly write group plans all day since I don't have to put my clients through the lengthy, intrusive process of individual medical underwriting and its uncertainties. Insurance looks socialistic because groups and companies come together to "pool risk". However, it is simply the way that insurance works. Insurance means working with law of averages and "large numbers", by necessity.
so what it really means is that it will have no impact at all for the employers and employees. Just more political hot air.
No, it means that your business will pay slightly less taxes if you cover healthcare costs for your employees.
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