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In: Economics

In the United​ States, employee benefits in the form of health insurance are not taxed. How...

In the United​ States, employee benefits in the form of health insurance are not taxed. How does this affect the price of health insurance compared to goods that are purchased after income is​ taxed? How does the amount of health insurance consumed compare to the amount that would be consumed if the benefit was​ taxed

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Expert Solution

If an employee's health insurance is not taxed, then the cost of health insurance will be less than the product purchased by the employee, which is also taxed! so it is beneficial for employee because in US health insurance prices is very high and due to highr price not everyone can buy them.

If the employee is also taxed for purchasing health insurance, then the employee may not buy health insurance and use those money for any purchase to save it.

Rahul Sunny answered 1 year ago
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