What is meant by the tax subsidy of employer-paid health insurance? Explain why the subsidy very likely increases health care spending and thus the cost of such insurance. Give an example as to why a $5,000 health insurance benefit provides a greater mon- etary benefit to someone in the 33 percent marginal tax bracket than someone in the 15 percent marginal tax bracket.

What is meant by the tax subsidy of employer-paid health insurance? Explain why the subsidy very likely increases health care spending and thus the cost of such insurance. Give an example as to why a $5,000 health insurance benefit provides a greater mon- etary benefit to someone in the 33 percent marginal tax bracket than someone in the 15 percent marginal tax bracket.

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Design Of The Tax System

Section: Chapter Questions

Problem 3CQQ

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