You guys realize that tax benefit they are losing amounted to nothing more than corporate welfare. The government provided them a subsidy for the company to provide drug coverage for retirees. The companies were still allowed to right off the expense even though it was taxpayer subsidized. What the Obama administration did was look at that and say why should a company be able to write off an expense when is taxpayer subsidized.
It would be like allowing a food stamp recipient to write off their grocery bills.
You guys realize that tax benefit they are losing amounted to nothing more than corporate welfare. The government provided them a subsidy for the company to provide drug coverage for retirees. The companies were still allowed to right off the expense even though it was taxpayer subsidized. What the Obama administration did was look at that and say why should a company be able to write off an expense when is taxpayer subsidized.
It would be like allowing a food stamp recipient to write off their grocery bills.
well it took them a week, but it looks like they finally came out with their talking point answer to this.
so if everyone knew this was coming, and it's no big deal, just ceasing corporate welfare, so on and so forth, why was the original reaction by Waxman & Co. shock and fury?
I think this is misunderstanding what actually happens here. There are some retirees that have very good medical benefits from their former company. So they use their insurance, which the company pays for rather than use the federal medicare which may cost them more.
So if people get this benefit taken away by their companies which could happen, then the cost of this bill goes up once again as people that were not charging their medicine to the government will have to.
People would be better off when debating this stuff to think through the arguement before spouting how the other side is a crook. This is a weakness I see from both sides of this discussion.
The health care overhaul takes back a lucrative tax break first offered in 2003 to entice companies to continue offering drug benefits. Companies were allowed to write-off a tax-free government subsidy of 28 cents for every dollar spent on their programs. Today, hundreds of companies take a tax deduction for the cost of their prescription drug benefits for retirees. The subsidized benefits kept many from having to rely on Medicare.
Under the new health care law, companies will continue to receive a 28 percent tax-free subsidy but they no longer get the double benefit of deducting the value of the subsidy. The government estimates this change will generate about $4.5 billion over the next decade to help pay for the health care overhaul.
I am sorry, but you are misunderstanding how this works. When Medicare Part D passed, there was a subsidy provided to large companies to help those companies to provide drug coverage to retirees. The problem is that they were still allowed to write off that expense, even though it was taxpayer subsidized. All that changed was the tax code was updated to not allow these companies to write off the subsidy as an expense. We did away with some corporate welfare and the right wingers are now screaming foul.
Reform has firms rethinking benefits | - NJ.com
Health care reform is kind of pointless if we are not trying to get the best bang for the taxpayers buck.
I am sorry, but you are misunderstanding how this works. When Medicare Part D passed, there was a subsidy provided to large companies to help those companies to provide drug coverage to retirees. The problem is that they were still allowed to write off that expense, even though it was taxpayer subsidized. All that changed was the tax code was updated to not allow these companies to write off the subsidy as an expense. We did away with some corporate welfare and the right wingers are now screaming foul.
Reform has firms rethinking benefits | - NJ.com
Health care reform is kind of pointless if we are not trying to get the best bang for the taxpayers buck.
This is not a "talking point" its a fact. These companies were previously able to write off an expense that was subsidized. Do you believe that companies or individuals should be able to write off expenses they incur that were subsidized by taxpayers?
well it took them a week, but it looks like they finally came out with their talking point answer to this.
so if everyone knew this was coming, and it's no big deal, just ceasing corporate welfare, so on and so forth, why was the original reaction by Waxman & Co. shock and fury?
Because their gravy train was ending. What is amusing is the Republicans who at the surface state they dislike government involvement are using these releases to attack the health care passage. Apparently ending welfare and preventing companies from expensing items they never paid for is bad to them. When it comes down to actual practice, neither party has any real understanding nor supports an actual market.
Wow, lets talk honestly here...
When Part D was being drafted, Congress rightly realized that should the federal government enact a retiree Rx program that corporations would likely reduce retiree Rx coverage and push retirees on to Part D. And why wouldn't they?
To motivate employers not to do this, Congress enacted a subsidy.
Now, how is this considered corporate welfare? The government was paying a subsidy to a corporation to induce a behavior the government would benefit from and that would be cheaper than enrolling new retirees into Medicare Part D.
Wow...
These firms are required by law to restate their earnings. Does this new corporate tax not affect their earnings?
And, seriously, does the imposition of a 35% corporate tax on the subsidy really spell the end of a gravy train???
Really? :spin:
Giving corporations a subsidy to pay for health care and then allowing them to write off the entire expense is in fact welfare.
As SD nicely put it, it is like giving you food stamps and then letting you expense all of your groceries, even though you did not pay for all of them.
So not only are they getting the benefit of what amounts to income, they also get a benefit of reduction in taxes. And on top of that, money they would have used to pay for the health costs that was covered by the subsidy can be used elsewhere.
And you are somewhat correct that a 35% tax doesn't end the gravy train. A 100% tax would as it would disallow taking subsidy money as an expense. Basically, this is reverse Worldcom. Rather then book expenses as income, they are booking income as expenses.
BTW - employers could expense health care benefits long before Part D became law.
Perhaps SD failed to account for the fact that you could expense your groceries all along...think about it.
Do you know what "expensing" means?
Bwah...the employers are following the law. The law requires a restatement of earnigns.
Democrats are hauling them before Congress to hammer them for...following the law.
That's the bottom line here. And it shows Democrats to be two-bit shysters...which is how they passed this mess in the first place.
Certainly seems to be the case. I don't see anyone disagreeing with that.In a note to employees after the law was passed, Verizon said that the law would make the federal subsidy to provide retiree benefits less valuable to employers and so “may have significant implications for both retirees and employers.”
The health care overhaul takes back a lucrative tax break first offered in 2003 to entice companies to continue offering drug benefits
In a note to employees after the law was passed, Verizon said that the law would make the federal subsidy to provide retiree benefits less valuable to employers and so “may have significant implications for both retirees and employers.”
It was allowing companies to write off the subsidy as an expense that is corporate welfare
How Southern Democrat or anyone else considers a subsidy to induce behavior favorable to the government as corporate welfare merely reveals that their argument is unserious.
This doesn't make any sense and you both keep pointing to it as though it does. Expense a subsidy? Really?
Rather, what was really happening is that corporations were deducting against income that portion of their prescription plans that were subsidized in addition to the unsubsidized benefit.
It makes perfect sense. And your question suggests you have no idea how financing works (or accounting). They are taking subsidy money, using it to pay expenses and then claiming the entire expense. Thus, they are expensing a subsidy. The government is not only paying for their costs but the firm is allowed to deduct costs it never paid. That is welfare.
I was going to reply to this, but SouthernDemocrat already said the same thing I would have said anyway in post #16, so here he is again. Don't really see what's so difficult to understand....:shrug:cpwill said:it's welfare to stay off a governemnt entitlement?
SouthernDemocrat said:The subsidy is not what I or anyone else is calling corporate welfare. It was allowing companies to write off the subsidy as an expense that is corporate welfare.
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