How many are there?
Well, believe it or not, there are 31 different Codes in Box #12 of your W-2. This is where they are.
In my two most recent US Debt Reduction Sequester Solutions, I already focused on two of them: #18 dealt with Tax Free Employer Provided Health Insurance, which is Code D in your W-2 and #19 dealt with Tax Deferred Elective Wage Deferrals, which is Code DD in your W-2. And both of these are gigantic Tax Loopholes.
In this Tax Loophole Closer, I am focusing on some of the other Box 12 Tax Free Compensation items.
Frankly, I think it would be wise for the US Government to very visibly disclose to the US public the detailed W-2's of say 100 highly-paid executives working for 100 different large US corporations.
To be fair, I would want to have all of the executive names and corporate names redacted out.
But I think it would be clearly eye-opening to US taxpayers as to the extent of the number of employer-provided other employee benefits to these highly-paid executives, as well as the dollar amount of each of these employee benefits included in the numerous Codes in the Box 12 of their W-2s.
Armed with this key information, I think the public will be in a much better position to decide what is the best way to fund US Deficit reduction.
In this post, I will address Other Employee Benefits received by highly-paid employees which also are tax free. I only will be covering a small handful of them. To get to the true extent of how many there are, you need the US Government to disclose that to the public.....that is being financially transparent.....salient information the public needs to properly make an informed assessment as how best to fund a US Deficit reduction.
So anyway, here goes a handful of these 2012 Tax Free employee benefits received by highly-compensated executives:
1) Health Savings Accounts.....this one is huge
2) Archer Medical Savings Accounts
3) Accident and Health Insurance
4) Child and Dependent Care Services.....up to $5,000 per year
5) Disability Coverage
6) Group-term Life Insurance.....a portion is now taxable
7) Adoption Assistance Programs
8) Cafeteria Plans
9) Flexible Spending Arrangements
10) Qualified Retirement Planning Services
11) Employee Educational Expenses.....up to $5,250 per year
12) Health Reimbursement Arrangements
13) Post-Retirement Health Care and Other Benefits.....this one is huge
And there are so many others. When you add up the total dollar amount here of Employee Compensation Other Employee Benefits Tax Free Income, it is really incredibly huge.
The above Employee Benefit tax loopholes is nothing short of welfare to the rich....both to the highly-paid executive and to the corporation. It is another case of the US Congress, on both sides of the aisle, continuing to legislate only on behalf of the wealthy, thereby further expanding the economic gap between the very wealthy and everyone else.
And all of the above tax loopholes for the wealthy executives and the rich corporations do absolutely nothing to create US jobs.
The above Other Employee Benefit Tax Loopholes here overwhelming favor the very wealthy employees.....they are the ones taking the maximum benefit from them and at a tax benefit rate that is substantially higher than the tax rate that would apply to regular employees.
Thus, the focus of sound, fair US governance should be to address the most egregious element here, and that clearly is the substantially higher tax largesse received by an employee having a very high Adjusted Gross Income.
But to be totally fair, I would scale in the elimination of these Other Employee Benefit Tax Loopholes, and thus the amount of this tax loophole elimination would increase as Adjusted Gross Income above $250,000 increases, but for sure, anyone with Adjusted Gross Income above $1 million would get the entire amount of these Other Employee Benefit Tax Loopholes eliminated for US federal income tax purposes starting in 2013.
