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LostInParadise's avatar

Why should employee benefits not be taxed?

Asked by LostInParadise (30060points) April 17th, 2011

It seems pretty simple to me. Employee benefits of whatever kind are a form of payment and therefore should be subject to taxes. Why should Walmart employees have to pay for their own insurance while other workers do not pay taxes on employer contributions. It does not seem fair.

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6 Answers

marinelife's avatar

You are volunteering to pay more taxes? How noble of you. I am sure the government would want to tax yours if you offered.

But don’t volunteer mine, thanks!

john65pennington's avatar

This has been my contention, concerning benefits from my police department and double taxation.

During our active work years, taxes are taken out on benefits.

When we retire, the same benefits are taxed again.

Sounds like double taxation to me.

Cruiser's avatar

I don’t agree with this policy as it puts further weight and burden on the employer to find ways to reward and or assist their employees. There are enough taxes levied against earned income as it is. Teaching the Government how to better manage these dollars would be a better use of time.

@john65pennington get a 401K plan….all contributions are pre-tax dollars.

All youngin Jellies here should look into opening a Roth….taxed deposits that never get taxed again!

SavoirFaire's avatar

@john65pennington First, “double taxation” happens all the time. Any time you buy anything, you’re paying sales tax on income that has already been taxed (or will be). Second, you will have to be more specific about how your benefits are being taxed. If you are talking about a pension, then someone is doing a terrible job managing those funds if they are taxed twice. If you are talking about insurance, like mentioned in the question details, then I don’t see double taxation. You just continue to be taxed as long as you continue to receive the benefit.

dabbler's avatar

there’s benefits and there’s benefits.
Supporting benefits such as health care and social security (which pay for themselves in their current incarnations if you don’t steal their reserves) makes total sense even for the most selfish person. The smart selfish person will realize they don’t want to live a place where the poorest all around you have tuberculosis and all sorts of other ugly ailments that you could catch and die from? It’s just unpleasant for one thing.
Imagining ‘common good’ is nebulous or some hippy-trippy leftie concept is ignorant.
I like my water supply mutual and not controlled by corporate interests thanks !
On the other hand ‘benefits’ that are just fancy means of adding compensation.
The only reason it might seem unfair that some folks get health coverage at work and don’t get taxed on that while some folks don’t have that benefit is because we don’t all get health coverage one way or another. That’s what should be fixed for the common good.

YARNLADY's avatar

Many companies consider the benefits to be part of the overall employee compensation. I would like to see more taxes levied on the corporation income, rather than the employees, but it would probably just get passed along in higher prices.

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