Casey is in the 12% marginal tax bracket, and Mei is in the 35% marginal tax bracket. Their employer is experiencing financial difficulties and cannot continue to pay for the company's health insurance plan. The annual premiums are approximately $8,000 per employee. The employer has proposed to either (1) require the employee to pay the premiums or (2) reduce each employee's pay by $10,000 per year with the employer paying the premium. Which option is less objectionable to Casey, and which is less objectionable to Mei? Casey would find the less objectionable since she would be "better off" by $fill in the blank 2. Mei would find the less objectionable since she would be"better off" $fill in the blank 4.
Casey is in the 12% marginal tax bracket, and Mei is in the 35% marginal tax bracket. Their employer is experiencing financial difficulties and cannot continue to pay for the company's health insurance plan. The annual premiums are approximately $8,000 per employee. The employer has proposed to either (1) require the employee to pay the premiums or (2) reduce each employee's pay by $10,000 per year with the employer paying the premium.
Which option is less objectionable to Casey, and which is less objectionable to Mei?
Casey would find the
less objectionable since she would be "better off" by $fill in the blank 2. Mei would find the
less objectionable since she would be"better off" $fill in the blank 4.
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