Tax brackets have changed; an employee who made between $38,000 - $82,500 single filing or between $77,400 – $165,000 married joint-filing was formally in the 25% tax bracket but is now in the 22% tax bracket for 2018- 2025.

Union and Corporate are negotiating contract terms. Assume that the union members are in the 22% marginal tax bracket and that all benefits are provided on a nondiscriminatory basis. Write a letter to the Union members explaining the tax consequences of the options discussed below.

The company would eliminate the $250 deductible on medical insurance benefits. Most employees incur more than $250 each year in medical expenses.

Employees would get an additional paid holiday with the same annual income (the same pay but less work).

An employee who did not need health insurance (because the employee’s spouse works and receives family coverage) would be allowed to receive the cash value of the coverage.