By NextBestFitNo employer tax: fund from households directly
Employers pay nothing; they must pass former premium spending into wages.
Draft decision:RejectedConfidence: medium · not yet reviewed
Requires household-only financing; the model keeps an employer tax.
Review ledgerHow this path connects
This path
No employer tax: fund from households directly
Requires:
Progressive income tax (including capital income)Replacing premiums with taxesRejectedConcrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Fund health from households only
- Require wage pass-through for a transition period
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Employer health taxes can lower wages at firms that never offered coverage
Funding care directly from households removes employer taxes, avoids wage loss at firms that did not offer coverage, and simplifies employers’ role.
What it creates or worsens
- Requires difficult enforcement
Requiring employers to pass former premium spending into wages is hard to enforce; the cited precedent describes such mandates as untested.
- Replacing premiums with taxes
Replacing employer payments with direct household funding requires higher household taxes.
Who's affected
Who gains
- Low- and middle-income households
- Employer health taxes can lower wages at firms that never offered coverage: New employer health taxes tend to reduce wages at firms that previously offered no coverage.
- Replacing premiums with taxes: Income-based taxes replace flat premiums that took a large share of their pay.
- Employers
- Employer health taxes can lower wages at firms that never offered coverage: Small businesses that offered no coverage face a new payroll cost.
Who loses
- People with employer coverage
- Employer health taxes can lower wages at firms that never offered coverage: Savings at firms that offered expensive coverage can raise workers’ wages.
- Low- and middle-income households
- Requires difficult enforcement: Requiring employers to pass former premium spending into wages is hard to enforce; the cited precedent describes such mandates as untested.
- High earners
- Replacing premiums with taxes: They pay more under income-based taxes than they did in flat premiums.
- Employers
- Replacing premiums with taxes: Businesses that never offered coverage start paying toward it.
Where it has been tried
- N/A: Wage pass-through mandates are untested.