Tax on Taxes

The Federal and State government have learned how to tax citizens indirectly through their health insurance premiums. Sometimes the tax is to fund the State’s high risk pool, or some other special program the State has created. The Federal government is promoting special taxes on the insurance companies. Of course, the insurance companies simply need to increase rates to cover the new tax. The problem is that the person that pays the tax indirectly is unaware of the tax payment. In the case of individual plans which are not tax deductible, these hidden taxes propose a preposterous situation where citizens are paying “tax on taxes”. If you are in the 30% tax bracket and are paying a $20 tax included in your premium, it costs you 26 dollars to pay the tax. This needs to be fixed, raising taxes inside a health insurance policy is not right and costs every citizen extra money in their health insurance premium. No one should pay tax on taxes.

The Health Insurance Guy