C the tax treatment of benefits is often more

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C. The tax treatment of benefits is often more favorable for employees than that of wages and salaries; therefore, benefits are perceived as being of value. The marginal tax rate is the percentage of an additional dollar of earnings that goes to taxes. Employers realize tax advantages from certain benefits. For example, Social Security and Medicare taxes are paid on wages and salaries, but most benefits are taxfree. Also, for employees, pension plans accrue investment returns taxfree until retirement. D. There is a cost advantage in buying insurance in a group rather than as an individual.
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E. Organized labor, which grew from the 1930s to the 1950s, often had benefits as a key objective (in 1990’s, it is estimated that onehalf of striking employees were striking because of healthcare issues). Acquiring benefits represented a tangible success for unions and was often seen as more important than a small wage increase. F. Employers may differentiate themselves to become unique in the eyes of current or prospective employees. This way, employees can set themselves apart from the rest of the pack. II. Benefits programs usually fall into the following categories: social insurance, private group insurance, retirement, pay for time not worked, and family-friendly policies. A. Social Insurance (Legally Required) 1. Social Security includes provision for oldage insurance, unemployment insurance, survivors' insurance, disability insurance, hospital insurance, and supplementary medical insurance. Having begun with the Social Security Act of 1935, which only implemented the first two listed, the combined list is now the federal Old Age, Survivors, Disability, and Health Insurance (OASDHI) program. Over 90 percent of American workers are covered; exceptions are railroad and federal, state, and local government employees who often have their own plans.
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