Apparently Senator Cruz has been bragging that he’s not on the federal dole for health insurance as part of his Senate benefits package. Posturing some sort of moral and fiscal high ground that gives him the right to rail against the ACA health insurance taxpayer paid subsidies because health insurance for his family doesn’t cost the taxpayers a dime. Just one little wrinkle in that “doesn’t cost the taxpayers a dime” claim and a whole lot of wrinkles in his honesty. Honesty first:
“Ted is on my health care plan,” Heidi Nelson Cruz, a Houston-based managing director for Wall Street firm Goldman Sachs, told the newspaper.
A spokeswoman for the Texas senator confirmed the coverage to the Times, which was worth at least $20,000 a year, according to Goldman.
…
Sen. Dick Durbin (D-IL) had tried to draw that information out of Cruz during his 21-hour floor speech on defunding Obamacare back in September. When Durbin asked him to explain whether his family was covered by the congressional health plan, the Texas senator’s response was vague.
Not sure how that “I get my $20,000 a year health insurance from Goldman Sachs” will go down with his teabaggers, but as he didn’t want to disclose that fact, his guess is the answer is not well.
But let’s consider what his minimum and hidden taxpayer subsidy is for his family’s diamond studded, platinum health insurance. Assume that the $20,000 benefit figure doesn’t include Goldman Sachs’ employer break on payroll taxes and Heidi’s salary is more than $115,500 and less than $300,000.
The employer and employee Medicare tax break on $20,000 is only $580/year. Not so much but multiplied by the millions of Americans that get their tax free employer health insurance, it adds up, and partly explains why the Medicare Part A trust fund isn’t as robust as the original model would have projected.
The larger taxpayer subsidy for Cruz’s health insurance is the income taxes he avoids. Their taxable income over $223,050 (and less than $398,350) is in the 33% tax bracket. $20,000 x 33% = $6,600.
Cruz family minimum total health insurance tax subsidy = $7,190.
As the Cruz’s $20,000/per year health insurance premium is off by 100%, their taxpayer subsidy is also twice as large.
Lost me on that one, what tax break? As far I can see from my W-2, my taxable income includes the Medicare tax and SS tax. It only excludes my 401K contribution and my health insurance premiums.
The Medicare tax is 1.45% for both the employee and employer – total 2.9% (SSDI rate is 6.2%). $20,000 x 0.029 = $580.
I see the tax break for the employer. He gets to deduct the tax he paid. But he doesn’t deduct the tax the employee paid. He already deducted that as wages paid.
You’re missing the point that paying that $20,000 as a health insurance benefit instead of salary avoids the employer’s payroll tax. Now for employees earning below the SSDI cap that avoids 7.65% for the employer and employee, but in Ms. Cruz’s case as she earns above the cap, that $20,000 non-salary benefit avoids on 1.45% for the employee and employer because there is no salary cap to Medicare payroll taxes.
That’s pretty remote to be considered a tax break.
Remote? I’m sure that tax break has nothing to do with GS decision to purchase that health insurance policy for their employees like Cruz. But it’s still a tax subsidy and that $290 multiplied by 60,000 employees is over $17 million.
That explains much and confirms my guess that all that grandstanding was market manipulation to get the Muppets to sell low to GS. If you recall, I recommended going all in to a broadly based ETF instead of selling. Personally, I made 6.8% on that advice.
Wouldn’t know — above my pay grade.
The Corp’s have forced us to play the market. They’ve taken all other avenues of savings away.
The average person cannot ever be expected to be investor savvy enough to risk their money in the market. Plus the professional advisers are generally no better than a monkey throwing darts. The complexity of all this only makes it easy for the haves to steal from the have nots, not that don’t already do well selling unneeded crap to the masses.
They have to study instead of playing video games.