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Baal-zebub · Site Admin Joined: 01 Jan 1970 Posts: 124

<p>You may already be painfully aware that smaller businesses today are at a tax disadvantage when it comes to providing health insurance to their employees. <a href="http://money.cnn.com/magazines/fsb/fsb_archive/2006/05/01/8376215/index.htm">This article in Fortune Small Business points out the tax imbalance</a>: </p>

<blockquote>"Even if small businesses try to compete by offering higher salaries so employees can buy health insurance on their own, they are still at a disadvantage thanks to the tax break employees get on their health benefits. For instance: An employee who earns $40,000 a year and receives a $10,000 family policy from his employer is essentially paid $50,000--$10,000 of it tax-free. But one who is paid a $50,000 salary and purchases his own policy will owe about $1,330 more in income and payroll taxes, based on his higher taxable income. The small business must pay payroll taxes on this amount as well, a penalty of $765. Eliminating the tax break for job-based insurance would remove this inequity."</blockquote>

<p>A number of voices are speaking up to change the current set of laws and insurance practices. We shall see what happens.</p>

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