Comments on: Obama Encourages Corporate Malfeasance

By: Akston

Akston — Wed, 01 Apr 2009 02:48:52 +0000

There are always unintended consequences from actions like this by the government. Today, health insurance in America is most commonly linked to a person's employer, rather than purchased directly like other insurance. If you try to purchase health insurance directly, you're competing against employer group rates. This came about as an unintended consequence of wage freezes during World War II. Wages were frozen, but in 1942 the War Labor Board ruled that fringe benefits were exempt from the freeze. Employers shifted to competing for employees using fringe benefits like health insurance, and this arrangement became the normal expectation. This distortion of what should simply be another portable insurance option for the consumer (like auto insurance or home insurance) is indeed the kind of adaptation likely to arise.

By: tarran

tarran — Wed, 01 Apr 2009 00:15:43 +0000

During the era of a 95% top tax rate, many companies compensated employees by supplying them with vehicles, country club memberships etc. None of these perks were subject to the income tax.

The result, well, Grisham’s The Firm catches the spirit resulting corruption quite well.

By: John

John — Tue, 31 Mar 2009 21:05:11 +0000

FDR tried in 1942 when he tried to tax income over $25,000 at 100%. That’s like $300,000 today. He didn’t get that but he did get 94% and it stuck for a while.

By: Justin Bowen

Justin Bowen — Tue, 31 Mar 2009 18:09:46 +0000

Tarran,

Do you have any specific examples of when and where this was tried? I’d certainly like to read about it.