With health care costs climbing even higher during this enrollment season, more employers are adopting a tiered system to pass on the bulk of those costs to their employees by assigning bigger contributions to workers in top salary brackets and offering some relief to workers who make less money.
A progressive tax structure is not a new idea; prominent economists for centuries including Adam Smith in The Wealth of Nations (first published 1776) have written on the merits of a progressive structure. Now, given that a worker’s share of a family policy is approaching $4,000 a year on average, employers are having to explore more creative ways to allocate expenses including through a progressive model, as noted in this article in The New York Times article.
Carol Brewer says
While it may seem logical to some that people who make more money should pay a greater percentage of the cost for health care or any other commodity, is it really fair? Where are we going to draw the line? The more a person earns, the more federal taxes they pay. A person earning $20,000 a year pays only one quarter of what a person earning $80,000 a year pays. In addition, the person earning the $80,000 will be in a higher tax bracket and will additionally pay a greater percentage of their wages to the federal government. At some point, making more money means keeping less of it than if your salary was actually lower. The mindset seems to be if you make more you should pay more for almost everything. Many complain that you are punished for striving to be successful, and the more successful you become, the more you pay for that success. Why try so hard when you can work for less and someone else pays for you? Perhaps, we should really do something about the high costs of medical care and medications
Abu Yahya says
At some point, making more money means keeping less of it than if your salary was actually lower.
That point never arises. Basic math.
Why try so hard when you can work for less and someone else pays for you?
There are two rejoinders to this:
(a) because if your gross pay is higher, your after-tax pay is also higher;
(b) because the entire economic system, or any segment of it, is not a meritocracy. Many things determine pay rate; ability or hard work are only two, and they’re not necessary the most important two.