Corporate America, however, would gleefully advertise that they were providing employees with free life insurance. But instead of stating they the policy was worth $300,000 (or so) they would only provide a relatively small amount (usually between $15-25,000) upon said employees death. If the employee left the firm there might not be any payout at all.
In a few words, corporate America essentially got money for nothing because Congress gave them a tax gift that allowed them to profit on death. This is one part of a system that makes it profitable to bank on death ...
I bring this up because Ryan Grimm is pointing to another, similar, corporate scam in the making. Though it doesn't involve death, corporate America - with their Republican friends in Congress - are starting to complain that some of their corporate subsidies will disappear under the new health care reform bill. Here's how it's happening according to Grimm:
Under the previous system, major corporations were subsidized by the government to provide prescription drug coverage to their retired employees. At the same time, corporations could claim on their tax returns that it was they -- not the taxpayers -- who paid for the drug coverage, and could write the expense off as a tax deduction.
Health care reform cuts out that fat. The corporations still get taxpayer money to help pay for their drug coverage, but they can no longer continue the fiction that they're using their own money to do it.
Got that? As was the case with Dead Peasant Insurance, corporate America gets a taxpayer funded subsidy to purchase something for employees. Corporate America claims credit for providing the product when it's actually taxpayer funded. Then corporate America gets a payout. In the case of Dead Peasant Insurance the payout was at the time of death. For corporate America and their prescription drug plan, the payout comes at the end of the year.
Either way, the American taxpayer funded the payout.
What's interesting is that instead of hailing the health care bill as an instrument for weeding out unwarranted, market skewing, corporate subsidies like this, Republicans and corporate America are doing their level best to muddy the waters, and make unsubstantiated claims about the bill. In this case, they're claiming that the health care reform law is a "jobs-killer."
In their world, by removing taxpayer funded subsidies, their bottom line is adversely affected. Ergo, they won't have enough money to hire new people, which makes the health care reform bill a jobs-killer.
My concern is that there are people actually stupid enough to believe this tripe. Sigh ...