will the 40% tax apply to those who make less than 250K?

[Ban Hammer 13,465]

http://www.irs.gov/govt/fslg/article/0,,id=112720,00.html

Currently many companies have a cafeteria plan. Meaning your premiums come out pre-tax.

rough math.....

$100 per week for a health insurance premium is not taxed so you will only pay about $70

With the 40% Obama tax $100 per week for a health insurance premium will become $140.

So you now pay $140 instead of $70 per week.

How's that hope and change working out?

[scandal 951]

Other than the hate issue you are cool with the 40% tax on 'high end' insurance plans?

Oh, sure. Since you obviously haven't got a clue what the tax is actually all about. See below.

And I take it that you're still comfortable with your statement that the President hates his own country?

http://www.irs.gov/govt/fslg/article/0,,id=112720,00.html

Currently many companies have a cafeteria plan. Meaning your premiums come out pre-tax.

rough math.....

$100 per week for a health insurance premium is not taxed so you will only pay about $70

With the 40% Obama tax $100 per week for a health insurance premium will become $140.

So you now pay $140 instead of $70 per week.

How's that hope and change working out?

Remind me to never, ever, EVER hire you to do my taxes. Or even make change for a dollar.

Obviously numerical reasoning is not one of your strong suits.

First off, please go find me a citation for your 40% figure. It's not in the Yahoo/AP article you quoted in the OP. And I'm not finding any reference to it anywhere else. Very nice - first you make up a stat, then you use it in your figurin'.

Second, the tax is applied to the EXCESS amount of high-cost (aka "Cadillac" plans) that exceed the threshold.

In the health bill passed by the Senate, a high-premium health plan is defined as costing more than $8,500 for an individual or $23,000 for a family.

(Source: http://www.kaiserhealthnews.org/Stories/20...ainer-npr.aspx)

In your "rough math" example, your $100 weekly pre-tax payroll contribution comes to $5200 yearly. That's below both the individual and family thresholds, meaning NO NEW TAX. So your $5200 remains pre-tax - no change whatsoever.

Ok, let's look at an example where the new tax would kick in.

Let's say you have an individual plan costing $200 weekly, which is $10,400 yearly.

Now the excess amount is 10,400 - 8,500 = $1900.

That means you still benefit from $8,500 of untaxed benefit.

The remaining $1900 is subject to the new tax ... but... not 40%, and not on your paycheck, and not by first putting that $1900 in your after-tax earnings before a second whallop (as you 'calculated' it).

Rather, the new tax is levied upon the INSURANCE CARRIER. They will likely pass on those costs in some fashion (they are a business after all):

"Although the Senate tax is to be imposed on insurers, the effects are likely to trickle down to consumers. Insurers or employers might tinker with benefits, for example, by increasing deductibles to reduce premium costs to below the threshold."

So how this gets passed on to an actual consumer is likely to vary. It may result in higher deductibles, or higher payroll contributions. There is no one "right" answer. Let's say at worst case that you pick up the entire tax at your marginal federal tax rate and you're in the highest possible bracket (35%): you're looking at an additional cost of 35% * $1900 = $665 yearly. Again, that's $665 in new tax for someone making TWICE ($200) the weekly healthcare payment in your example. A single person, btw. A family would still be comfortably under the limit and pay no new tax until their weekly payment hit $23,000/52 = $442 weekly.

My hope and change is working out just fine. Thanks for asking.

[mawilson 2,133]

Second, the tax is applied to the EXCESS amount of high-cost (aka "Cadillac" plans) that exceed the threshold.

In the health bill passed by the Senate, a high-premium health plan is defined as costing more than $8,500 for an individual or $23,000 for a family.

(Source: http://www.kaiserhealthnews.org/Stories/20...ainer-npr.aspx)

In your "rough math" example, your $100 weekly pre-tax payroll contribution comes to $5200 yearly. That's below both the individual and family thresholds, meaning NO NEW TAX. So your $5200 remains pre-tax - no change whatsoever.

Are you sure about that? That $8,500 only applies to the employee portion of the premium?

If the employee contributes $100 and the employer contributes $100 pre-tax, the total

yearly contribution comes to $10,400 - which is definitely above the threshold.

[scandal 951]

Are you sure about that? That $8,500 only applies to the employee portion of the premium?

If the employee contributes $100 and the employer contributes $100 pre-tax, the total

yearly contribution comes to $10,400 - which is definitely above the threshold.

מטומטם

And I should reply to you, or take any notice of you, .... why?

[mawilson 2,133]

And I should reply to you, or take any notice of you, .... why?

What's up scandal? You have some kind of a problem with me all of a sudden?

[Ban Hammer 13,465]

What's up scandal? You have some kind of a problem with me all of a sudden?

he doesn't like cute lizards, they scare away the sheep.

[mawilson 2,133]

he doesn't like cute lizards, they scare away the sheep.

[mawilson 2,133]

I think he's still mad at me because he tried to send me a PM once and my PM box is permanently full.

[Ban Hammer 13,465]

I think he's still mad at me because he tried to send me a PM once and my PM box is permanently full.

probably all those moderator warnings you get

[scandal 951]

What's up scandal? You have some kind of a problem with me all of a sudden?

Who said anything about all of a sudden?

[Hilarious Clinton 452]

Are you sure about that? That $8,500 only applies to the employee portion of the premium?

If the employee contributes $100 and the employer contributes $100 pre-tax, the total

yearly contribution comes to $10,400 - which is definitely above the threshold.

Scandal.... PWNED!!

[scandal 951]

Scandal.... PWNED!!

Ah, no. Not really, dearie. But thanks for drooling at the thought, it really is so precious.

The suggestion made by the gecko is that the $100 weekly contribution is matched by an equivalent employer contribution of $100, thereby making it $200 weekly or $10,400 monthly. That was not your stated assumption in your fuzzy math post, which my post accurately rebutted. However, just for kicks, let's run with the Gecko's scenario.

Let's return to my post above, which obviously was beyond your comprehension. Here's the relevant bit:

So how this gets passed on to an actual consumer is likely to vary. It may result in higher deductibles, or higher payroll contributions. There is no one "right" answer. Let's say at worst case that you pick up the entire tax at your marginal federal tax rate and you're in the highest possible bracket (35%): you're looking at an additional cost of 35% * $1900 = $665 yearly. Again, that's $665 in new tax for someone making TWICE ($200) the weekly healthcare payment in your example. A single person, btw. A family would still be comfortably under the limit and pay no new tax until their weekly payment hit $23,000/52 = $442 weekly.

As it happens, you can see that I already considered what the effect of a doubled contribution would be, resulting in a trigger of the new tax. In worst case (35% marginal federal bracket, all attributable to the employee), it comes to $665 yearly. That's a WHOPPING $12.79 weekly.

In other words, today you pay $100 and your employer pays $100 weekly.

In this worst case scenario, your payment now increases to $112.79 and your employer stays at $100.

Oh, and what is this worst case scenario? You are a single person in the 35% tax bracket, meaning you are grossing over $372,951, well over that $250K limit y'all are so worried about. And, you are paying this new tax not just on your own $100, but also on your employer's portion (unlikely).

Holy shocking unbearable obamanomic health plan, batman! Ya gotz the scandal pwned!

NOT.

[Pinocchio Liberal 268]

What's up scandal? You have some kind of a problem with me all of a sudden?

Compasses are hard to find these days! He must be lookin for an article he can live by.

Edited January 12, 2010 by ={Rogue}=

[scandal 951]

Compasses are hard to find these days!

Holiday is season is over Marc. You can drop the Santa outfit now.

[Pinocchio Liberal 268]

Holiday is season is over Marc. You can drop the Santa outfit now.

I aint the one playin santa! You recognize a bad guy in a santa suit? Dont vote next time!