Dead Peasants Insurance: a clarification

So anyone who's seen Capitalism: A Love Story or (like me), knew about this before probably knows about Dead Peasants insurance. You know, when a company secretly takes out a life insurance policy on an employee and gets a payout of between $500,000-$10,000 when the employee dies. The original purpose of this was to supposedly provide remuneration to the company because they would possibly have to pay benefits to the deceased's family and pay to hire and train a new employee. That purpose has been completely perverted.

Unfortunately, the devil is in the details and the movie didn't delve into just how sinister the practice is. In fact, it's a tax shelter and a mechanism of redistribution of wealth from the public to the rich.
See, unless the company owns the life insurance company, any and all premiums are tax write-offs and because a loophole doesn't define life insurance premium payments as "income", provider companies don't have to pay taxes on any loans that they receive. Oh, and the payouts to the beneficiary are 100% tax free so every time:
* ADAC Laboratories
* Advanced Telecommunication Corp.
* Aeroquip Vickers Inc.
* Alabama Power Co.
* Alfa Corp.
* Allegheny Technologies Inc.
* Allergan Inc.
* Allfirst Financial Inc.
* Amegy Bank, N.A.
* American Business Products, Inc.
* American Electric Power
* American Express Co.
* American Greetings Corp.
* American Management Systems Inc.
* American Seafoods Group LLC
* Ameritech Corp.
* Amerus Group Co.
* Anadarko Petroleum Corporation
* Appalachian Power Co.
* Arch Chemical
* Aristech Chemical Corp.
* AT&T Communications
* Atlantic Richfield Co.
* Avery Dennison Corp
* Avon Products Inc.
* B. F. Goodrich Company
* Ball Corporation
* Bank Boston
* Bank Of America
* Bank One Corp.
* Barnett Banks Inc.
* Bassett Furniture Industries Inc.
* Be Aerospace Inc.
* Bear Stearns Companies
* Bellsouth Corporation
* Boise Cascade Corp.
* Boston Company
* Boston Federal
* Bristol-Myers Squibb Company
* Camelot Music, Inc.
* Carolina Power & Light Co.
* Carpenter Technology Corp.
* Catskill Financial Corp.
* Central Power & Light Co.
* Ch2m Hill Companies Ltd.
* Charming Shoppes, Inc.
* Checkfree Corp.
* Chemical Banking Corporation
* Citibank, N.A.
* Citizens Bank
* Clark Inc.
* Clorox Company
* CNF Inc.
* Coca-Cola Company
* Columbus Southern Power Co.
* Commercial Intertech Corp.
* Compass Bank (Florida & Alabama)
* Computer Technology Associates Inc.
* Consolidated Natural Gas Co.
* Consolidated Rail Corporation
* Cox Enterprises, Inc.
* CTA Inc.
* Cymer Inc.
* Diamond Shamrock Inc.
* Diebold Inc.
* Dime Bancorp Inc.
* Dow Chemical
* Earle M. Jorgensen Co.
* Eastman Kodak Company
* Eaton Corp.
* ECC Capital Corp.
* Enserch Corp.
* F&M Bancorp
* FiberMark Inc.
* Figgie International Inc.
* Fina Oil & Chemical Company
* First Bank System Inc.
* First Commonwealth
* First Midwest Bancorp Inc.
* Fleet Bank
* FleetBoston Financial Corp.
* Flightsafety International Inc.
* Frontier Bank
* Fulton Financial Corp.
* GATX Corporation
* Georgia Power Co.
* GNC Corp.
* Great Plains Energy Inc.
* GTE Corporation
* Gulf Power Co.
* HCR Manor Care Inc
* Hechinger Company
* Heritage Commerce Corp.
* Herman Miller Inc.
* Hershey Foods Corporation
* Hillenbrand Industries, Inc.
* Hosiery Corporation of America
* Houghton Mifflin
* Household Finance
* Hovnanian Enterprises Inc.
* Hughes Supply Inc
* ICI Americas, Inc.
* Idaho Power Company
* IKON Office Solutions Inc.
* Indiana Michigan Power Co.
* Integra Bank Corp.
* Intermark Inc.
* Iowa First Bancshares Corp.
* Iroquois Bancorp Inc.
* J Jill Group Inc.
* JP Morgan Chase & Co.
* Kansas City Power & Light
* Kansas Gas & Electric Co.
* Keithley Instruments Inc.
* Kentucky Power Co.
* Keycorp Ohio
* Kimberly Clark
* Korn Ferry International
* Laser Master Int’l. Inc.
* Linens N Things Inc.
* LKQ Corp.
* Louisiana Pacific Corp.
* Manor Care Inc.
* Marriott International Inc.
* McDonnell Douglas Corp.
* Media General Inc.
* Medicalcontrol Inc.
* Menasha Corporation
* MidAmerican Energy Co.
* Miix Group Inc.
* Mississippi Power Co.
* MNC Financial Inc.
* Mueller Industries Inc.
* National City Corporation
* NationsBank
* Nestle Enterprises
* Norfolk Southern Corp.
* Norfolk Southern Railway Co.
* Northern States Power Co.
* Ohio Power Co.
* Old National
* Olin Corporation
* Owens & Minor Inc.
* PacifiCorp
* Panera Bread Co.
* Panhandle Eastern Pipe Line Company
* Parker Hannifin Corp.
* Penn Treaty American Corp.
* Penns Woods Bancorp Inc.
* Phibro Animal Health Corp.
* Philipp Brothers Chemicals Inc.
* Phoenix Companies Inc.
* Pinnacle Financial Services Inc.
* Portland General Electric
* Potlatch Corporation
* PPG Industries
* Procter & Gamble Company
* PSS World Medical Inc.
* Public Service Co. of New Mexico
* Public Service Co. of Oklahoma
* Public Service Enterprise Group
* Questech Inc.
* R. R. Donnelley & Sons Company
* Ruddick Corp.
* Ryder System Inc.
* Sallie Mae (Stud Ln Mktg Assoc.)
* Savannah Electric & Power Co.
* Sequa Corp.
* Service Merchandise Co., Inc.
* Shearson Mortgage
* Sherwin-Williams
* Sky Chefs
* Smart & Final Inc.
* Smith Barney
* Sonoco Products Co.
* Southwest Bank
* Southwest Water Co.
* Southwestern Bell Corp.
* Southwestern Electric Power Co.
* Southwestern Public Service Co.
* Star Banc Corp.
* Stauffer Management Company
* Steelcase Inc.
* Sturgis Bancorp Inc.
* Summit Bank of N.J.
* Swank, Inc.
* Tellabs Inc.
* Tenet Healthcare Corp.
* Texas Eastern Transmission Corp.
* Tompkins Trustco Inc.
* TXU Corp.
* TYCO International
* UniFirst Corp.
* Union Bank
* United National Bancorp
* Urocor Inc.
* Vineyard National Bancorp
* W. R. Grace & Company
* Wachovia Corporation
* Walgreen Company
* Wal-Mart Stores
* Walt Disney
* Wang’s International, Inc.
* Wells Fargo, N.A.
* West Coast Bancorp
* West Texas Utilities Co.
* Westar Energy Inc.
* Western Aire Chef Inc
* Western Resources, Inc.
* Westpoint Pepperell
* Winn Dixie
* Winnebago Industries Inc.
* Woolworth Corporation
* Xcel Energy Inc.
* York Water Co.
* Zale Corp.
and many other companies (disclosing the existence of the policies is voluntary) has a dead employee, the American tax payer gives them a gift of at least a million bucks.

The most frustrating thing is that these policies are at least 55 years old and have always been controversial but people are reacting as if this is something new that's just been discovered! Oh, and I highly doubt it takes a million bucks to retrain a cashier at Wal-Mart.

Some more information-

Companies can borrow against the policies but interest is not tax free. According to at least one source (possibly dated), US Corporations invest around $8 Billion (all written off or subsidized) per year on Dead Peasants Insurance and then profit to the tune of $9 Billion annually. So that's $17 Billion in handouts from the American tax payers plus subsidies paid to the insurance companies, PLUS the US bailout of AIG which (being a monopoly) owns the majority of such companies means that this is one of the most heinous example of Plutocratic (some would say Kleptocratic) wealth redistribution since the Bush II and Reagan "tax cuts".

second correction, $10,000 in the first post should have said $10,000,000. Also, certain state laws force companies to disclose these policies but those are few and far between.

Originally posted by Darth Jello
sclosing the existence of the policies is voluntary) has a dead employee, the American tax payer gives them a gift of at least a million bucks.

I don't get how that is calculated.

Ah okay if it is 10 000 000 I guess you got a point. But it could be less, no?

Michael Moore is the liberal Rush Limbaugh.

Originally posted by Bardock42
I don't get how that is calculated.

Ah okay if it is 10 000 000 I guess you got a point. But it could be less, no?

It depends on age and gender. Basically young healthy women have the highest payout because they have the highest longevity. There's also been issues involving companies taking out multiple policies on a single person and abusing the system that way.

Typically payouts are in the high tens or hundreds of thousands of dollars on the low end and up to ten million on the high end.

And shaky, Jesus, go to the ****ing optometrist and then take some time at a dart board or a firing range because your talent at missing the point is astounding! Maybe after a months' practice, you can work your way down to being able to hit the side of a barn.

Originally posted by Darth Jello
...And shaky, Jesus, go to the ****ing optometrist and then take some time at a dart board or a firing range because your talent at missing the point is astounding! Maybe after a months' practice, you can work your way down to being able to hit the side of a barn.

I don't understand why you don't get my point.

Do you really take this seriously?

Dead Peasants insurance has been a contentious topic WAAAAYYYY before Michael Moore was making movies. It just took his movie to actually make the debate somewhat mainstream (sort of). You just enjoy having parallel arguments and conversations. I'm beginning to wonder how many people on this board choose to ignore your comments because I'm considering doing the same.

Originally posted by Darth Jello
Dead Peasants insurance has been a contentious topic WAAAAYYYY before Michael Moore was making movies. It just took his movie to actually make the debate somewhat mainstream (sort of). You just enjoy having parallel arguments and conversations. I'm beginning to wonder how many people on this board choose to ignore your comments because I'm considering doing the same.

No, this is laughable. This is exactly how conspiracies are constructed. That is why I ask, do you really take this seriously? Wake up dude, this is nutty.

It's absolutely true. No nuttiness to this. Do a little bit of homework. Hell, I'm suprised ABC News "Just discovered" this. Next thing you know they'll be running a story that says "New discovery!! A new use has been discovered for the human ass other than sitting and sex and it's called pooping!!! details at 9!"

Originally posted by Darth Jello
It's absolutely true. No nuttiness to this. Do a little bit of homework. Hell, I'm suprised ABC News "Just discovered" this. Next thing you know they'll be running a story that says "New discovery!! A new use has been discovered for the human ass other than sitting and sex and it's called pooping!!! details at 9!"

😆 Whatever dude.

Make sure your aluminum foil hat is well secured. jk 😉

I'm sorry dude, but seeing that your posts have no basis in reality and are typically just argumentative crap, I'm ignoring you.

When you decide to get a clue, look up dead peasants insurance and if you don't think it could exist in this society, why don't you actually find out what a hedge fund is and what credit default swaps and short selling are. Then find an etymology book and look up cannibalism among insects.

Originally posted by Darth Jello
I'm sorry dude, but seeing that your posts have no basis in reality and are typically just argumentative crap, I'm ignoring you.

When you decide to get a clue, look up dead peasants insurance and if you don't think it could exist in this society, why don't you actually find out what a hedge fund is and what credit default swaps and short selling are. Then find an etymology book and look up cannibalism among insects.

Hey man, I always thought you were joking when you made these kind of threads. I didn't know you were a true believer. I'm sorry, it must be miserable living in your world. 😄

I fail to see why a company wanting to pay less tax is somehow evil and corrupt. It's not evil and corrupt when a person does it on an individual level is it...Putting money into tax free savings accounts...Many "buy as you earn" share schemes take money off gross income and so is tax free if shares are kept for more than 5 years.

What's the big deal?...If you owned your own company then no doubt you'd look into paying less tax by hiring an accountant to manage your money.

Or is it only evil when a company gets to a certain size?

Dead "Peasants".

lol. the hell..?

They could've at leaset been meaner..

Originally posted by jaden101
I fail to see why a company wanting to pay less tax is somehow evil and corrupt. It's not evil and corrupt when a person does it on an individual level is it...Putting money into tax free savings accounts...Many "buy as you earn" share schemes take money off gross income and so is tax free if shares are kept for more than 5 years.

What's the big deal?...If you owned your own company then no doubt you'd look into paying less tax by hiring an accountant to manage your money.

Or is it only evil when a company gets to a certain size?

Ok let me explain again. A company takes out a life insurance policy on an employee naming ITSELF as the beneficiary. The life insurance premiums are payed by the taxpayers. When the employee dies, the company receives a hefty chunk of cash, tax free, from the insurance company which is itself very often heavily subsidized. In other words, it's like you taking out fire insurance on your neighbors house, using welfare checks to pay the premiums, and then getting 10 times more money than your neighbor when his house burns down.

Originally posted by Darth Jello
Ok let me explain again. A company takes out a life insurance policy on an employee naming ITSELF as the beneficiary. The life insurance premiums are payed by the taxpayers. When the employee dies, the company receives a hefty chunk of cash, tax free, from the insurance company which is itself very often heavily subsidized. In other words, it's like you taking out fire insurance on your neighbors house, using welfare checks to pay the premiums, and then getting 10 times more money than your neighbor when his house burns down.

What if his house never burns down?

Are you saying that when their employees don't die, they kill them? 😕

Originally posted by Darth Jello
Ok let me explain again. A company takes out a life insurance policy on an employee naming ITSELF as the beneficiary. The life insurance premiums are payed by the taxpayers. When the employee dies, the company receives a hefty chunk of cash, tax free, from the insurance company which is itself very often heavily subsidized. In other words, it's like you taking out fire insurance on your neighbors house, using welfare checks to pay the premiums, and then getting 10 times more money than your neighbor when his house burns down.

The problem still isn't with the company though is it? The problem is with the legislation. So long as a company's tax avoidance is legal then it's not doing anything bad. Blame the legislators.

If you found a loophole that allowed you to do the latter then you'd probably do it if it was legal. So would I.

Originally posted by Shakyamunison
Are you saying that when their employees don't die, they kill them? 😕

If they're not, they should.

Originally posted by jaden101
So long as a company's tax avoidance is legal then it's not doing anything bad.

Just because someone isn't breaking the law doesn't mean that they're not doing something bad.

No, I'm saying that the company gets payed regardless as long as you are still an employee, even if you're killed off the job. The scheme has statistically very lucrative returns. Aside from one case, I can't think of a company murdering an employee to collect on a policy. The horrifying thing is the principle of the matter and the fact that it is robbery of the tax payers. Also, kind of puts a new perspective on the issues of consumer safety, health reform, labor safety considering that companies are directly profiting off of death to the tune of billions annually.