Who Really Pays the Tax?

With ObamaCare taking full effect in 2014, employers who dont provide health insurance will be subject to an 8% payroll tax. Who will really pay that?

Suppose annual company payroll is $1 million. An 8% punishment tax comes out to $80,000. If the employer reduces payroll by 7.5% (sorry, times are tough and I just had no choice. If you dont like it, go find another job), he saves $75,000 and his punishment tax is $74,000. 

Employees benefit by reduced taxes too – a win win situation it seems.

So Uncle Sam gets $74,000. Employer makes $1,000. Employees get screwed but pay less taxes.

This is really nothing new – employees have been funding 100% of Social Security and Medicare all along. And, they have been funding 100% of employer sponsored health care too.

This makes perfect economic sense doesnt it?

Comments are closed.