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Verizon: Obamacare to cost 970 million

cpwill

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Verizon Communications Inc., the second-largest U.S. phone company, became the latest company to record a cost related to the U.S. health-care overhaul, saying it will incur a $970 million expense.

..Verizon follows AT&T Inc., the biggest U.S. carrier, Deere & Co., Caterpillar Inc. and other companies in disclosing similar expenses after losing a tax benefit for retiree plans. The costs may reduce corporate profits by as much as $14 billion as companies account for the impact of the health-care reforms, according to benefits consulting firm Towers Watson.

...“This is having an impact on the bottom line and that can cut jobs,” said Chetan Sharma, an independent wireless analyst in Issaquah, Washington. “I am not sure the final story has been told on this” because most companies still don’t know exactly how the new law will affect them, he said.

Verizon had about 223,000 workers at the end of December, with about 35 percent represented by labor unions including the Communication Workers of America. About 58 percent of Dallas- based AT&T’s workforce has union representation.

In a note to employees after the law was passed, Verizon said that the law would make the federal subsidy to provide retiree benefits less valuable to employers and so “may have significant implications for both retirees and employers.”
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Many people may lose their jobs. But at least the ones that still got a job can go visit the doctor differently now right? Fewer people workin + overburdenign government healthcare > More people with jobs and letting capatilism do its work.
 
You guys realize that tax benefit they are losing amounted to nothing more than corporate welfare. The government provided them a subsidy for the company to provide drug coverage for retirees. The companies were still allowed to right off the expense even though it was taxpayer subsidized. What the Obama administration did was look at that and say why should a company be able to write off an expense when is taxpayer subsidized.

It would be like allowing a food stamp recipient to write off their grocery bills.
 
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Personally, I don't get why those who are so against gov't entitlement programs are so in favor of corp American continuing to get subsidized retiree health benefits. You can't have it both ways and still say that "government shouldn't be involved in 'my health care'" or insist that employee-sponsored health care should be done away with but get upset when a subsidized health benefit that is used by Corp American as a tax right-off is taken away.
 
You guys realize that tax benefit they are losing amounted to nothing more than corporate welfare. The government provided them a subsidy for the company to provide drug coverage for retirees. The companies were still allowed to right off the expense even though it was taxpayer subsidized. What the Obama administration did was look at that and say why should a company be able to write off an expense when is taxpayer subsidized.

It would be like allowing a food stamp recipient to write off their grocery bills.

well it took them a week, but it looks like they finally came out with their talking point answer to this.

so if everyone knew this was coming, and it's no big deal, just ceasing corporate welfare, so on and so forth, why was the original reaction by Waxman & Co. shock and fury?
 
You guys realize that tax benefit they are losing amounted to nothing more than corporate welfare. The government provided them a subsidy for the company to provide drug coverage for retirees. The companies were still allowed to right off the expense even though it was taxpayer subsidized. What the Obama administration did was look at that and say why should a company be able to write off an expense when is taxpayer subsidized.

It would be like allowing a food stamp recipient to write off their grocery bills.

I think this is misunderstanding what actually happens here. There are some retirees that have very good medical benefits from their former company. So they use their insurance, which the company pays for rather than use the federal medicare which may cost them more.

So if people get this benefit taken away by their companies which could happen, then the cost of this bill goes up once again as people that were not charging their medicine to the government will have to.

People would be better off when debating this stuff to think through the arguement before spouting how the other side is a crook. This is a weakness I see from both sides of this discussion.
 
well it took them a week, but it looks like they finally came out with their talking point answer to this.

so if everyone knew this was coming, and it's no big deal, just ceasing corporate welfare, so on and so forth, why was the original reaction by Waxman & Co. shock and fury?

This is not a "talking point" its a fact. These companies were previously able to write off an expense that was subsidized. Do you believe that companies or individuals should be able to write off expenses they incur that were subsidized by taxpayers?
 
I think this is misunderstanding what actually happens here. There are some retirees that have very good medical benefits from their former company. So they use their insurance, which the company pays for rather than use the federal medicare which may cost them more.

So if people get this benefit taken away by their companies which could happen, then the cost of this bill goes up once again as people that were not charging their medicine to the government will have to.

People would be better off when debating this stuff to think through the arguement before spouting how the other side is a crook. This is a weakness I see from both sides of this discussion.

I am sorry, but you are misunderstanding how this works. When Medicare Part D passed, there was a subsidy provided to large companies to help those companies to provide drug coverage to retirees. The problem is that they were still allowed to write off that expense, even though it was taxpayer subsidized. All that changed was the tax code was updated to not allow these companies to write off the subsidy as an expense. We did away with some corporate welfare and the right wingers are now screaming foul.

The health care overhaul takes back a lucrative tax break first offered in 2003 to entice companies to continue offering drug benefits. Companies were allowed to write-off a tax-free government subsidy of 28 cents for every dollar spent on their programs. Today, hundreds of companies take a tax deduction for the cost of their prescription drug benefits for retirees. The subsidized benefits kept many from having to rely on Medicare.
Under the new health care law, companies will continue to receive a 28 percent tax-free subsidy but they no longer get the double benefit of deducting the value of the subsidy. The government estimates this change will generate about $4.5 billion over the next decade to help pay for the health care overhaul.

Reform has firms rethinking benefits | - NJ.com

Health care reform is kind of pointless if we are not trying to get the best bang for the taxpayers buck.
 
I am sorry, but you are misunderstanding how this works. When Medicare Part D passed, there was a subsidy provided to large companies to help those companies to provide drug coverage to retirees. The problem is that they were still allowed to write off that expense, even though it was taxpayer subsidized. All that changed was the tax code was updated to not allow these companies to write off the subsidy as an expense. We did away with some corporate welfare and the right wingers are now screaming foul.



Reform has firms rethinking benefits | - NJ.com

Health care reform is kind of pointless if we are not trying to get the best bang for the taxpayers buck.

Thank you I stand corrected.
 
I am sorry, but you are misunderstanding how this works. When Medicare Part D passed, there was a subsidy provided to large companies to help those companies to provide drug coverage to retirees. The problem is that they were still allowed to write off that expense, even though it was taxpayer subsidized. All that changed was the tax code was updated to not allow these companies to write off the subsidy as an expense. We did away with some corporate welfare and the right wingers are now screaming foul.



Reform has firms rethinking benefits | - NJ.com

Health care reform is kind of pointless if we are not trying to get the best bang for the taxpayers buck.

Wait what? Waxman is a right winger???
 
This is not a "talking point" its a fact. These companies were previously able to write off an expense that was subsidized. Do you believe that companies or individuals should be able to write off expenses they incur that were subsidized by taxpayers?

i believe that this program was (falsely) sold under the claim that it would have no effect on the health insurance people had so long as they were happy with it. i believe that this program was (falsely) sold under the claim that it would be good for businesses. i believe this program was (falsely) sold under the claim that it would create jobs. I believe all these things were lies, and I believe that the evidence has begun and will continue to accumulate, and that this is merely one example of that trend.
 
well it took them a week, but it looks like they finally came out with their talking point answer to this.

so if everyone knew this was coming, and it's no big deal, just ceasing corporate welfare, so on and so forth, why was the original reaction by Waxman & Co. shock and fury?

Because their gravy train was ending. What is amusing is the Republicans who at the surface state they dislike government involvement are using these releases to attack the health care passage. Apparently ending welfare and preventing companies from expensing items they never paid for is bad to them. When it comes down to actual practice, neither party has any real understanding nor supports an actual market.
 
Wow, lets talk honestly here...

When Part D was being drafted, Congress rightly realized that should the federal government enact a retiree Rx program that corporations would likely reduce retiree Rx coverage and push retirees on to Part D. And why wouldn't they?

To motivate employers not to do this, Congress enacted a subsidy.

Now, how is this considered corporate welfare? The government was paying a subsidy to a corporation to induce a behavior the government would benefit from and that would be cheaper than enrolling new retirees into Medicare Part D.

Now, real corporate welfare is what Obama did in his health care bill...

Unions exempted from excise taxes on luxury plans.

Insurers like Kaiser Permanente and Tufts Health exempted from paying 100% of taxes on plans.

That, my friends, is corporate welfare.

How Southern Democrat or anyone else considers a subsidy to induce behavior favorable to the government as corporate welfare merely reveals that their argument is unserious.

Lastly, if, as Robert Gibbs tell us, is true, that the tax (which is levied at the corporate income tax rate of 35%) was really to address this alleged double dip or corporate welfare, why not repeal the subsidy or impose a 100% tax on it?

And, ~poof~ goes the talking point....
 
Because their gravy train was ending. What is amusing is the Republicans who at the surface state they dislike government involvement are using these releases to attack the health care passage. Apparently ending welfare and preventing companies from expensing items they never paid for is bad to them. When it comes down to actual practice, neither party has any real understanding nor supports an actual market.

Wow...

These firms are required by law to restate their earnings. Does this new corporate tax not affect their earnings?

And, seriously, does the imposition of a 35% corporate tax on the subsidy really spell the end of a gravy train???

Really? :spin:
 
Mmmmm... gravy train.
 
Wow, lets talk honestly here...

When Part D was being drafted, Congress rightly realized that should the federal government enact a retiree Rx program that corporations would likely reduce retiree Rx coverage and push retirees on to Part D. And why wouldn't they?

To motivate employers not to do this, Congress enacted a subsidy.

Now, how is this considered corporate welfare? The government was paying a subsidy to a corporation to induce a behavior the government would benefit from and that would be cheaper than enrolling new retirees into Medicare Part D.

The subsidy is not what I or anyone else is calling corporate welfare. It was allowing companies to write off the subsidy as an expense that is corporate welfare.
 
Wow...

These firms are required by law to restate their earnings. Does this new corporate tax not affect their earnings?

And, seriously, does the imposition of a 35% corporate tax on the subsidy really spell the end of a gravy train???

Really? :spin:

Perhaps you should reread what you wrote.

Giving corporations a subsidy to pay for health care and then allowing them to write off the entire expense is in fact welfare.

As SD nicely put it, it is like giving you food stamps and then letting you expense all of your groceries, even though you did not pay for all of them.

So not only are they getting the benefit of what amounts to income, they also get a benefit of reduction in taxes. And on top of that, money they would have used to pay for the health costs that was covered by the subsidy can be used elsewhere.

So tell me, how is that not a gravy train?

I give you cash to cover a cost which I then allow you to take the entire amount as an expense thereby reducing your taxes and letting you allocate money towards something else.

Watch:

Really? :spin:

And you are somewhat correct that a 35% tax doesn't end the gravy train. A 100% tax would as it would disallow taking subsidy money as an expense. Basically, this is reverse Worldcom. Rather then book expenses as income, they are booking income as expenses.
 
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Giving corporations a subsidy to pay for health care and then allowing them to write off the entire expense is in fact welfare.

The subsidy existed not because corporations lobbied for them, but precisely because the Congress rightly recognized that Part D would incentivize dropping retiree Rx coverage and dumping retirees on to the public dole. The government paid to induce a certain behavior.

BTW - employers could expense health care benefits long before Part D became law.

As SD nicely put it, it is like giving you food stamps and then letting you expense all of your groceries, even though you did not pay for all of them.

Perhaps SD failed to account for the fact that you could expense your groceries all along...think about it.

So not only are they getting the benefit of what amounts to income, they also get a benefit of reduction in taxes. And on top of that, money they would have used to pay for the health costs that was covered by the subsidy can be used elsewhere.

Do you know what "expensing" means?

And you are somewhat correct that a 35% tax doesn't end the gravy train. A 100% tax would as it would disallow taking subsidy money as an expense. Basically, this is reverse Worldcom. Rather then book expenses as income, they are booking income as expenses.

Bwah...the employers are following the law. The law requires a restatement of earnigns.

Democrats are hauling them before Congress to hammer them for...following the law.

That's the bottom line here. And it shows Democrats to be two-bit shysters...which is how they passed this mess in the first place.
 
BTW - employers could expense health care benefits long before Part D became law.

Which is not what we are talking about.

Perhaps SD failed to account for the fact that you could expense your groceries all along...think about it.

One must wonder if you can read.

It is a gravy train because the SUBSIDY PORTION is allowed as an expense. Why you can't figure that one is beyond me.

Again, SD said this:

"The subsidy is not what I or anyone else is calling corporate welfare. It was allowing companies to write off the subsidy as an expense that is corporate welfare."

Do you know what "expensing" means?

Way to fail. We aren't discussing the fact that you can expense such costs. The problem is expensing what amounts as income. I know what expensing means. I also know that you should not be allowed to expense items you did not pay for. Which is what is happening now. And why I call it welfare.

Bwah...the employers are following the law. The law requires a restatement of earnigns.

Doesn't change what we are talking about.

Democrats are hauling them before Congress to hammer them for...following the law.

And the law is welfare.

That's the bottom line here. And it shows Democrats to be two-bit shysters...which is how they passed this mess in the first place.

Okay..more ranting.

I see you have utterly failed to show how this isn't a gravy train.

Not surprising. Those who typically make their handle to broadcast their ideology are weak debaters.

The fact that you cannot refute the notion that this is reverse Worldcom suggests you know you are wrong. They are booking what amounts to as income as an expense. The US taxpayer is paying their expenses which they get to take. Tell me how that's not a gravy train. The government is paying their costs and they are reducing their taxable income at the same time.
 
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In a note to employees after the law was passed, Verizon said that the law would make the federal subsidy to provide retiree benefits less valuable to employers and so “may have significant implications for both retirees and employers.”
Certainly seems to be the case. I don't see anyone disagreeing with that.

And I really don't understand obvious Child's argument as being relevant because of what CSword wrote, that's also in the article linked:

http://www.nj.com/business/index.ssf/2010/03/reform_has_firms_rethinking_be.html
The health care overhaul takes back a lucrative tax break first offered in 2003 to entice companies to continue offering drug benefits

So Obvious Child, according to the article, why was the lucrative tax break given by the government, in the first place?
According to this, because they wanted to encourage corporations to maintain employee benefits as they are, which was perceived by the government to be better for the employees.

While you may try to use a negative label like "Coroprate Welfare", it looks actually to be, aside from more evidence that the government is ham-handed in attempting to do this sort of thing...that they negotiated with taxpayer money, to entice employers to keep employees on their presumably better benefits. It looks to have been a benefit intended for employees (or at the least better for the government), with the cost being also benefiting corporations.

Now, the OP is simply stating that since the government has now reversed its early position on this, it is likely to then have the earlier predicted outcome. Which was this:
In a note to employees after the law was passed, Verizon said that the law would make the federal subsidy to provide retiree benefits less valuable to employers and so “may have significant implications for both retirees and employers.”

So you disagree with this?
 
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It was allowing companies to write off the subsidy as an expense that is corporate welfare

This doesn't make any sense and you both keep pointing to it as though it does. Expense a subsidy? Really?

Rather, what was really happening is that corporations were deducting against income that portion of their prescription plans that were subsidized in addition to the unsubsidized benefit. Obamacare ends that 2012.

When the Medicare Part D prescription-drug entitlement in 2003, they decided to build in a subsidy for private employers to keep them from dumping their retirees into the Part D program.

For companies offering retiree drug coverage, the government agreed to pay 28 percent of the cost. It also agreed not to count the subsidy against an existing tax deduction for retiree drug benefits. The logic behind this was also simple: Prior to the subsidy, companies were paying the whole cost of offering the benefit, and taking the whole tax deduction.

Companies were always able to deduct the cost of Rx benefits. Part D didn't change that. It wasn't coporate welfare and it ain't double dipping. Congress was paying companies to do something we wanted done.

Now, actual corporate welfare...like Kaiser Permanente's exemption from 50% of the excise tax on health plans, well, common sense says that's wholly different from paying a company to do something that saves the government money as it did when it provided a subsidy to companies to not have them dump retiress into Medicare and have taxpayers pick up the tab.
 
How Southern Democrat or anyone else considers a subsidy to induce behavior favorable to the government as corporate welfare merely reveals that their argument is unserious.

precisely. this "subsidy" served to shift costs from government to employers. and employers were willing to do it up until now. good job, dems.
 
This doesn't make any sense and you both keep pointing to it as though it does. Expense a subsidy? Really?

It makes perfect sense. And your question suggests you have no idea how financing works (or accounting). They are taking subsidy money, using it to pay expenses and then claiming the entire expense. Thus, they are expensing a subsidy. The government is not only paying for their costs but the firm is allowed to deduct costs it never paid. That is welfare.

Rather, what was really happening is that corporations were deducting against income that portion of their prescription plans that were subsidized in addition to the unsubsidized benefit.

LOL. You say I'm wrong...and then go and say what I was saying. The corporations are taking expenses THEY NEVER PAID FOR against income.

Again, how is that not a gravy train? Not only is someone else paying for your costs, but you get to take the expense against your income you never paid for.

The logic is irrelevant here. And you are clearly trying to change the subject away from how you are 100% dead wrong here.

I still see nothing on your part showing how this isn't a gravy train.
 
It makes perfect sense. And your question suggests you have no idea how financing works (or accounting). They are taking subsidy money, using it to pay expenses and then claiming the entire expense. Thus, they are expensing a subsidy. The government is not only paying for their costs but the firm is allowed to deduct costs it never paid. That is welfare.

it's welfare to stay off a governemnt entitlement? wow, war is peace slavery is freedom and socialism really is wealth, huh? :)
 
cpwill said:
it's welfare to stay off a governemnt entitlement?
I was going to reply to this, but SouthernDemocrat already said the same thing I would have said anyway in post #16, so here he is again. Don't really see what's so difficult to understand....:shrug:
SouthernDemocrat said:
The subsidy is not what I or anyone else is calling corporate welfare. It was allowing companies to write off the subsidy as an expense that is corporate welfare.
 
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