Health tax hits hard ?

Re: Health tax hits hard ?

Postby kgcayenne » Mar 8th, 2018, 2:25 pm

I had to go as straight-line as possible because of how complicated an organization can be. Some companies have employees who are paid in line with many different categories/rates. Throw a scenario out here, I'll see if I have the time to plug it in.
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Re: Health tax hits hard ?

Postby Jlabute » Mar 8th, 2018, 2:54 pm

Am I imagining things or did all the fast food joints just raise their prices by about 10%? My big mac meal today was over $9. My work buddy said his fast food went up by about a dollar at Latin Fiesta.
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Re: Health tax hits hard ?

Postby youjustcomplain » Mar 8th, 2018, 3:05 pm

Jlabute wrote:Am I imaging things or did all the fast food joints just raise their prices by about 10%? My big mac meal today was over $9. My work buddy said his fast food went up by about a dollar at Latin Fiesta.


Crazy right? Fast food is no longer the same as cheap food.
Prices at McD's will only get worse once they have to start paying staff closer to $15 per hour. Everything will get more expensive.

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Re: Health tax hits hard ?

Postby Glacier » Mar 8th, 2018, 3:18 pm

kgcayenne wrote:Whassssaproblemopeople?

I'm not an NDP fan myself, but I don't see the problem here either. They are basically forcing every employer to cover the cost of a medical benefit only 17% of employers covered before.
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Re: Health tax hits hard ?

Postby rustled » Mar 9th, 2018, 9:47 am

The numbers are still bothering me. Here's a graphic GF posted in the BC thread on this topic:

Image
There's no definition of "old cost" (pre-50 percent discount or with?), and "new" may be 2019's double-bam year or 2020 onward. But what this tells me is that they paid only some of their employees' MSP, or that the salaries they pay are high enough that now these individuals' salaries mean the employer is paying four times as much for their individual MSP premiums, or a combination of the two.

If we felt it was wrong for people who earned more to pay the same for their MSP as the base rate individuals, why are we okay with employers who pay their employees well paying far more for those employees' MSP? (In effect, this penalizes employers who pay better than minimum wage. Surely there's no proof these people are using more of the services.)

As GF points out, the cost for governments and government services comes from somewhere. It will inevitably be built into the purchases we make and the services we use, becoming another hidden cost is borne by the taxpayer, including many people who previously didn't pay any MSP because their family income was below threshold. I doubt most of these people worked where the premiums were paid by an employer (who, it has been suggested, could now pay the employee directly since it was part of their packet).

I agree with those who have said this could put more of the burden, not less, on those who can least afford it.

It will be interesting to see whether or not people feel they're any further ahead once the tax is "hidden" in the rest of their day-to-day costs. There's no real way to measure whether or not people are any further ahead when this happens.

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Re: Health tax hits hard ?

Postby Glacier » Mar 9th, 2018, 10:26 am

I get what you're saying, but understand that the MSP was a REGRESSIVE tax. The more you make, the less tax you pay. The new tax is not PROGRESSIVE in that you pay more if you make as income taxes are. Rather, it's PROPORTIONAL in that everyone pays the same rate. I think that's a fair compromise.
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Re: Health tax hits hard ?

Postby rustled » Mar 9th, 2018, 10:37 am

Glacier wrote:I get what you're saying, but understand that the MSP was a REGRESSIVE tax. The more you make, the less tax you pay. The new tax is not PROGRESSIVE in that you pay more if you make as income taxes are. Rather, it's PROPORTIONAL in that everyone pays the same rate. I think that's a fair compromise.


Now it's a HIDDEN tax. That's not an improvement.

I'm not sure it makes any sense for an employer to pay three times as much MSP for an employee they're paying $90,000, as they pay for an employee they're paying $30,000 a year.

I think it's likely there's a better solution. This one seems to me to have been selected on the fly as the solution that would endanger the fewest NDP votes.

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Re: Health tax hits hard ?

Postby CapitalB » Mar 9th, 2018, 10:47 am

rustled wrote:
Now it's a HIDDEN tax. That's not an improvement.

I'm not sure it makes any sense for an employer to pay three times as much MSP for an employee they're paying $90,000, as they pay for an employee they're paying $30,000 a year.

I think it's likely there's a better solution. This one seems to me to have been selected on the fly as the solution that would endanger the fewest NDP votes.


What if instead of charging it through to the company they charged it through on those employee's income tax? Then the person making 80k would be paying that increase themselves. Would that be better than the company paying for it? Even though then its targeting the middle class instead of the upper class.
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Re: Health tax hits hard ?

Postby Glacier » Mar 9th, 2018, 10:49 am

rustled wrote:Now it's a HIDDEN tax. That's not an improvement.

Well it's an improvement, but not much of one (in my opinion). Full disclosure, the company I work for is small, so we will not be hit with this, and in fact, I'll be better off because my employer does not pay mine now, so yes, I'm tainted by my own benefit.

Hidden taxes are bad, but politically speaking, they're great... look how many stoopid morons voted to get rid of the HST because they'd rather have a more hidden PST. Speaking of which, I'd rather see a bump in the PST than a truly hidden tax. Better yet would be to bring back the HST.

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Re: Health tax hits hard ?

Postby gman313 » Mar 9th, 2018, 11:30 am

kgcayenne wrote:I had to go as straight-line as possible because of how complicated an organization can be. Some companies have employees who are paid in line with many different categories/rates. Throw a scenario out here, I'll see if I have the time to plug it in.


2 million dollar payroll, assume 40 employees, all paid the same wage. half are single, half are family

The company did NOT pay MSP but had an extensive extended benefits program. The extended benefits program is fully paid by the employer, with the exception of LTD which is paid for by the employee for preferential tax treatment at time of claim.

Cost for the extended medical portion of the benefits plan is 75/month for single employees, and 145/month for couples/families. No health care spending account so the employees cannot use any of their extended benefits to pay for their MSP premiums.
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Re: Health tax hits hard ?

Postby rustled » Mar 9th, 2018, 11:49 am

CapitalB wrote:
rustled wrote:
Now it's a HIDDEN tax. That's not an improvement.

I'm not sure it makes any sense for an employer to pay three times as much MSP for an employee they're paying $90,000, as they pay for an employee they're paying $30,000 a year.

I think it's likely there's a better solution. This one seems to me to have been selected on the fly as the solution that would endanger the fewest NDP votes.


What if instead of charging it through to the company they charged it through on those employee's income tax? Then the person making 80k would be paying that increase themselves. Would that be better than the company paying for it? Even though then its targeting the middle class instead of the upper class.

Stick it to the wealthy or stick it to the middle class? LOL. :1422:

Everyone pays hidden taxes. All classes. They're rolled into the costs of everything we pay for every day. Often, those who make and spend more will pay a higher proportion of any given hidden tax. But as pointed out in my previous post, those who under the previous system had low enough family income they were exempt from paying MSP will now pay the hidden tax. So the wealthiest will pay a greater share of the MSP, and now the poorest will pay, too.

Again: I think it's likely there's a better solution. This one seems to me to have been selected on the fly as the solution that would endanger the fewest NDP votes.
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Re: Health tax hits hard ?

Postby animal lover1 » Mar 9th, 2018, 12:13 pm

Glacier wrote:I get what you're saying, but understand that the MSP was a REGRESSIVE tax. The more you make, the less tax you pay. The new tax is not PROGRESSIVE in that you pay more if you make as income taxes are. Rather, it's PROPORTIONAL in that everyone pays the same rate. I think that's a fair compromise.


"Everyone" does NOT pay the same. Only payrolls OVER $500k (meaning roughly 10 staff members) pay. I am not a fan of any tax, and I was not a fan of everyone paying MSP. That said, why should it NOT be a straight payroll tax for ALL? Everyone uses the system, not just all those "big businesses" with payroll over $500k. Great incentive to keep your payroll under $500k I guess.

This is an NDP business killing tax that we should have seen coming.

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Re: Health tax hits hard ?

Postby kgcayenne » Mar 9th, 2018, 12:39 pm

gman313 wrote:
kgcayenne wrote:I had to go as straight-line as possible because of how complicated an organization can be. Some companies have employees who are paid in line with many different categories/rates. Throw a scenario out here, I'll see if I have the time to plug it in.


2 million dollar payroll, assume 40 employees, all paid the same wage. half are single, half are family

The company did NOT pay MSP but had an extensive extended benefits program. The extended benefits program is fully paid by the employer, with the exception of LTD which is paid for by the employee for preferential tax treatment at time of claim.

Cost for the extended medical portion of the benefits plan is 75/month for single employees, and 145/month for couples/families. No health care spending account so the employees cannot use any of their extended benefits to pay for their MSP premiums.

[icon_lol2.gif]

Every company I've known of with an extensive benefits program, as you describe here, covers the MSP.

Mind you, I do not actually own a company here, I'm only speaking from the position of having generous access to the knowledge of a number of accounting firms doing payroll, full-cycle accounting, and corporate income taxes. [/sarcasm off ]

Edited to add: 1. I distinctly remember at the outset of the Provincial government's MSP cessation discussion that their aim was to basically penalize the employers who were unwilling to provide MSP coverage. I recall someone even using the term 'bad employers' at the time. Therefore, there must be large companies who are cheaping-out.

2. The majority of companies in the Okanagan cheap-out, the ones who do not cheap out are the aforementioned ones who cover MSP and contract-out their accounting.
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Re: Health tax hits hard ?

Postby gman313 » Mar 9th, 2018, 1:44 pm

Well in the Okanagan every company with an extensive benefit program does not pay MSP. Less than half do actually

yes extensive is subjective

I would actually rather pay my MSP myself and have my employer enhance the extended medical. 75 in premium on an extended plan can add quite a bit

better overall total coverage for the employee that way.

But now in my example they have just about got to eliminate one position to pay for the tax, or reduce extended benefits, or increase price

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Re: Health tax hits hard ?

Postby kgcayenne » Mar 9th, 2018, 2:08 pm

gman313 wrote:But now in my example they have just about got to eliminate one position to pay for the tax, or reduce extended benefits, or increase price


I quit buying into that type of statement a long time ago. Companies will do that anyway for a number of different reasons, not exclusively to this particular change.

Do you think larger companies may split-off division companies in order to keep their payroll threshold at a lower health tax rate? I am thinking this is not going to be as disastrous as people would like us to think. After all, if a company with $2M payroll where their staff are earning $50k ea is fiscally impoverished with a $39,000/year expense, they're operating on the edge anyway.

Now, if this company is paying their employees $50k each, and I were a policy maker, I'd sure like to implement some sort of tax benefit that would reward such a company for providing that level of compensation. However, I sure like the idea of the health tax penalizing companies for their inequities of keeping a majority of their employees at or below poverty level (not needing to cover MSP due to premium assistance). I'm totally into that.
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