@Linkat,
Linkat wrote:Of course it does not include what the insurance company pays for you. But this is so dependent on the individual and a company would not nor would we want an employer to know what this amount is. This is personal information - not corporate.
So if you are self-employed or if you have a job that doesn't provide health care, and you pay for medical expenses out-of-pocket, you do pay income tax on the money used to cover your health expenses.
If, however, an insurance company pays for the same expenses, you don't pay income tax on that money because it never goes through your account the way it does if you don't have insurance. So, in a way, insurance is a way of avoiding taxes.
In terms of health care markets, that translates into health care providers and industries being able to charge higher prices because individuals and companies are shifting the payment responsibility to insurance, so that they don't have to report the money as income before spending it on health care.
Quote:I also would disagree that you include needed medical insurance coverage as income? Why would you if employer insurance coverage is deemed to not be taxed? Why would the health insurance itself be taxed?
If you work for minimum wage or thereabouts, your standard deduction covers all your tax liabilities. That means if you have any deductible health expenses, you can't claim them as deductions. You also don't have health benefits covered by your employer, so if you buy health insurance, you're paying out-of-pocket using income that may not be taxed because your standard deduction causes all your tax to be refunded, but you can't afford health care or insurance because all your other costs of living, such as rent and food are high due to all the businesses and employees that are paying for their own health care via (untaxed) insurance, which drives up the amount providers can charge.
Quote:This is also counter any sort of insurance. You are not taxed on the insurance coverage as a result of a automobile accident. The idea of insurance is to cover you when something of a large financial burden unexpectedly occurs. It is not income - it is to cover some sort of loss.
Maybe or maybe not, but that doesn't change the fact that health care businesses are able to charge more because the funds they get paid from are not taxed.
Let's say you get paid $30k plus benefits and your insurance is paying for your health care and so it's like you are making $50k and spending $20k on health care. If you reported the whole $50k and received a standard deduction that resulted in you not paying taxes or paying less than $20k in taxes, then you would be paying your health expenses out of money you also paid taxes on, at which point you would work harder to lower your health expenses because you were actually paying for them yourself instead of deducting them from taxes you'd be paying anyway.
If health care expenses were subject to fiscal discipline because people and businesses weren't just deducting them from taxes, that would bring down costs for the uninsured and the poor who don't make enough money to pay taxes beyond the standard deduction.
