Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: lucysmom
The employer gets a tax break for the portion of health insurance he provides, and the employee does not pay tax on that portion of the benefit. Under the FairTax, would employer provided and paid for health insurance be a business expense and tax free, even though the benificary is the individual?
From FairTax.org:
"The purchase of insurance by a business for its employees is taxable. The business owes the tax."
So, yes, employers will pay the FairTax on their employee's health insurance..


Would the portion of insurance paid for by the employee be subject to the 30% tax?
Yes.


What happens when the insurance provider pays for health services? Is the payment a business expense and therefore not subject to the tax?
Yes. There is no tax charged. If the insured pays for the health service, they are charged the tax and they get a credit through the insurer.
64 posted on 08/28/2007 7:33:31 PM PDT by Your Nightmare
[ Post Reply | Private Reply | To 55 | View Replies ]


To: Your Nightmare
Thanks, I appreciate your response.

While, business gets a tax break for providing insurance to it employees now, it would loose that tax advantage and, to use FairTax terminology, would be punished by the FairTax for providing that benefit.

72 posted on 08/28/2007 8:55:09 PM PDT by lucysmom
[ Post Reply | Private Reply | To 64 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson