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  • Gift to the Mega-Rich?

    I know it's all just political posturing and I shouldn't let it bother me, but the media conversation the last few days about health care changes is starting to grate on me. I mean, I don't think the Republican plans are super, just like I didn't think the Democratic plan was super. And neither of them do anything to solve the real issue anyway. I wish those knuckleheads would sit down together in a closed room and come up with some sort of compromise so they can work on reducing costs- the real issue.

    So this isn't particularly partisan for me, but headlines like:

    Senate Health Bill Gives Mega-Rich a $250K Gift

    are really painful to read. The $250K is the estimate of the average savings on PPACA taxes (the 0.9% on earned income and 3.8% on investment income) that the top 0.1% won't pay if those new taxes are repealed. Remember, these are taxes that were brand new for the 2013 tax year, so we're really only talking 3-4 years here.

    https://www.whitecoatinvestor.com/2013-tax-report-and-the-new-obamacare-taxes/

    For 2013, I paid about $1300 in those taxes and as my income has risen, so has my tax bill. If those two taxes are repealed, I'm not going to save anywhere near $250K, but it could be enough money to take the family to Europe for a nice vacation. Or buy a 2 or 3 year old sedan. It's an amount about equal to my health insurance premiums for which I obviously do not qualify for a subsidy. So I basically pay for health care for my family and one other family.

    But it bothers me that this is has now become a "gift" to give somebody back money that they earned and which they didn't have to pay in taxes just 4 years ago. Nobody in 2013 was talking about how the mega-rich were giving a gift to poor people. Or just how many families' health care the average CEO or business owner was paying for.

    I guess I'd just like to see the rich get a little credit for what they're doing. "Hey, thanks for working hard and paying your taxes so we can offer all these great societal safeguards and benefits. If we get a chance to cut taxes, we will and since you're the ones paying the most, you'll obviously get the largest cut. You guys are the best and thanks for creating all these jobs and earning so much and paying so much in taxes. I know you don't have to keep working, earning, and paying these taxes so thank you."

    Of course in a progressive tax system when taxes are cut they're going to be cut the most on those who pay the most. Should someone who pays $10,000 a year in taxes get a $250K tax cut or should the guy who pays $10M in taxes get the $250K tax cut? The knee-jerk reaction is to "soak the rich" but when I ask someone what percentage of their income they think a rich person should pay in taxes, the answer I get back is usually a number smaller than that person is paying already! When your effective rate is pushing 40% and your marginal rate is pushing 50%, I think that's probably enough and so do most people when you ask them.

    At any rate, I know a lot of readers of this site pay a lot of money in taxes. So today, I just want to say "Thank you" for doing that, because I think it's time somebody did. People who earn a lot of money providing useful goods and services to society shouldn't be villified for their income.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

  • #2
    Your welcome.  I have paid my fair share of taxes in the last 30 years but no one has ever thanked me.

    Comment


    • #3
      WCI,

      Thanks for encapsulating a lot of misinformation and class-warfare-driven political talking points that drive me crazy as well.  Most of the media contributes to it by publishing misleading and ominous sounding headlines like the one you mentioned.

      In a progressive income tax system like we have, by bipartisan consent for a long time, it is impossible to craft any sort of broad tax cut without disproportionate benefits going to "the rich" (ie, high-income earners).  That's because HIEs pay most of the total federal tax bill, both in absolute dollar terms and even in share of national income terms.  Yet the myth that "the rich aren't paying their fair share" persists in the minds of many class-warriors, despite the fact that it is easily and completely refutable by stats published by the federal government itself.  It's virtually impossible to cut taxes for the "bottom" because the bottom 50% of households by income pay only a tiny percentage of the total tax bill.

      I too hate when some describe a tax reduction as a "gift" or a "give-away".  It's their money in the first place because they earned it in the first place!  The same goes for when someone tries to reign in federal spending even just in a trivial or symbolic way.  Such proposals are usually demagogued as "draconian cuts" even when they do nothing beyond slightly reduce the rate of growth in a certain program(s).

       

       

      Comment


      • #4
        I agree. All of the media hype about the "huge wealth transfer from the poor to the rich blah, blah, blah..." is simply the rollback of a tax that went into effect a few years ago and nothing more. That said, where else are we going to get the money to pay for medical care for the lower income family? I can accept that these taxes are here to stay but only wish the media were more honest about it (he says while tilting at windmills).

        Comment


        • #5
          I'm quite politically liberal (bernie bro) but discussion of taxes makes me want to puke.

          2014 was an interesting year for me b/c I

          • was a high earner but all of it wages (no options, stock, etc)

          • paid state income tax

          • did not own a home

          • made massive student loan payments but couldn't deduct interest

          • paid some capital gains taxes

          • wasn't able to take any big special deductions


          No fun to get screwed in all those ways. When the argument is "well you have plenty left over" that's not even really an argument. By that logic if someone made $10M a year and you taxed them $9.5 you could still say they were doing well.

          Comment


          • #6
            Amen.   It too bothered me greatly on that CNN headline.

            All I have to say is that Democrats did this to themselves by doing it 'easy way' and using taxation and justification of the mandate as a tax law instead of doing the right bi-partisan rules.  It setup the whole issue once Republicans gained the majority for exactly what we see now -- a taxation reversal that funded an expansion that didn't have any legs to stand on by itself in any respect.

            The Republicans are just rolling back the taxes and hence the funding mechanisms for the medicaid expansion.

            It'll be very interesting to see how affordable the new tiered tax breaks will be with the dumbed down requirements and whether that's sustainable in its current form since most of the taxation funding this is nowhere to be found that I can see.

            With these new plans, there's going to be an explosion of High Deductible Plans or variations of this as states opt out and scale back mandated coverages to make them affordable to for healthy folk.  This MAY work, but I do see a fair amount of deferred health maintenance will result from this compared to Obamacare health that we've done for the past years (with variable success).

            At the end of the day, as a primary care internist who saw a great deal of the medicaid expansion folk being in the UC system, I don't think it really moved the value based care needle all that much.  It certainly helped private medicaid insurance companies and health systems balance their ED book ledgers; but it didn't really improve the basics all that much IMHO in the healthy young generation.

            Comment


            • #7




              I’m quite politically liberal (bernie bro) but discussion of taxes makes me want to puke.

              2014 was an interesting year for me b/c I

              • was a high earner but all of it wages (no options, stock, etc)

              • paid state income tax

              • did not own a home

              • made massive student loan payments but couldn’t deduct interest

              • paid some capital gains taxes

              • wasn’t able to take any big special deductions


              No fun to get screwed in all those ways. When the argument is “well you have plenty left over” that’s not even really an argument. By that logic if someone made $10M a year and you taxed them $9.5 you could still say they were doing well.
              Click to expand...


              HOW CAN YOU BE A BERNIE BRO, BRO??   

              I encounter a lot of Bernie supporters who are very pro-civil liberties and individual rights but hate paying taxes.  Seems ridiculous with Bernie running on the socialist ticket, but the sad part is that so many are lured in since the Republican party is so abysmal on just about anything other than taxes (and even then, they're not great).

              It's a shame that the Republican party has made such a living trying to limit personal freedoms.  If they were truly the freedom party, and not just freedom from taxes and the right to buy a gun, they'd have a lot more appeal.

              Comment


              • #8







                I’m quite politically liberal (bernie bro) but discussion of taxes makes me want to puke.

                2014 was an interesting year for me b/c I

                • was a high earner but all of it wages (no options, stock, etc)

                • paid state income tax

                • did not own a home

                • made massive student loan payments but couldn’t deduct interest

                • paid some capital gains taxes

                • wasn’t able to take any big special deductions


                No fun to get screwed in all those ways. When the argument is “well you have plenty left over” that’s not even really an argument. By that logic if someone made $10M a year and you taxed them $9.5 you could still say they were doing well.
                Click to expand…


                HOW CAN YOU BE A BERNIE BRO, BRO??   I encounter a lot of Bernie supporters who are very pro-civil liberties and individual rights but hate paying taxes.  Seems ridiculous with Bernie running on the socialist ticket, but the sad part is that so many are lured in since the Republican party is so abysmal on just about anything other than taxes (and even then, they’re not great).

                It’s a shame that the Republican party has made such a living trying to limit personal freedoms.  If they were truly the freedom party, and not just freedom from taxes and the right to buy a gun, they’d have a lot more appeal.
                Click to expand...


                yeah i know, it doesn't always make perfect sense.

                have never been opposed to paying taxes, it just bothers me to be treated like a CEO by the tax code.

                i think he and Warren are basically spot on with respect to the "game" being "rigged."

                i'm guessing no one wants us to turn this into a Bernie thread.

                Comment


                • #9










                  I’m quite politically liberal (bernie bro) but discussion of taxes makes me want to puke.

                  2014 was an interesting year for me b/c I

                  • was a high earner but all of it wages (no options, stock, etc)

                  • paid state income tax

                  • did not own a home

                  • made massive student loan payments but couldn’t deduct interest

                  • paid some capital gains taxes

                  • wasn’t able to take any big special deductions


                  No fun to get screwed in all those ways. When the argument is “well you have plenty left over” that’s not even really an argument. By that logic if someone made $10M a year and you taxed them $9.5 you could still say they were doing well.
                  Click to expand…


                  HOW CAN YOU BE A BERNIE BRO, BRO??   I encounter a lot of Bernie supporters who are very pro-civil liberties and individual rights but hate paying taxes.  Seems ridiculous with Bernie running on the socialist ticket, but the sad part is that so many are lured in since the Republican party is so abysmal on just about anything other than taxes (and even then, they’re not great).

                  It’s a shame that the Republican party has made such a living trying to limit personal freedoms.  If they were truly the freedom party, and not just freedom from taxes and the right to buy a gun, they’d have a lot more appeal.
                  Click to expand…


                  yeah i know, it doesn’t always make perfect sense.

                  have never been opposed to paying taxes, it just bothers me to be treated like a CEO by the tax code.

                  i think he and Warren are basically spot on with respect to the “game” being “rigged.”

                  i’m guessing no one wants us to turn this into a Bernie thread.
                  Click to expand...


                  I guess you could be described as a fiscally conservative socially progressive individual maybe? That is what I think of myself...well, sort of...then I pick sides with whomever I align with the most, but it is a very imperfect fit.

                  Comment


                  • #10













                    I’m quite politically liberal (bernie bro) but discussion of taxes makes me want to puke.

                    2014 was an interesting year for me b/c I

                    • was a high earner but all of it wages (no options, stock, etc)

                    • paid state income tax

                    • did not own a home

                    • made massive student loan payments but couldn’t deduct interest

                    • paid some capital gains taxes

                    • wasn’t able to take any big special deductions


                    No fun to get screwed in all those ways. When the argument is “well you have plenty left over” that’s not even really an argument. By that logic if someone made $10M a year and you taxed them $9.5 you could still say they were doing well.
                    Click to expand…


                    HOW CAN YOU BE A BERNIE BRO, BRO??   I encounter a lot of Bernie supporters who are very pro-civil liberties and individual rights but hate paying taxes.  Seems ridiculous with Bernie running on the socialist ticket, but the sad part is that so many are lured in since the Republican party is so abysmal on just about anything other than taxes (and even then, they’re not great).

                    It’s a shame that the Republican party has made such a living trying to limit personal freedoms.  If they were truly the freedom party, and not just freedom from taxes and the right to buy a gun, they’d have a lot more appeal.
                    Click to expand…


                    yeah i know, it doesn’t always make perfect sense.

                    have never been opposed to paying taxes, it just bothers me to be treated like a CEO by the tax code.

                    i think he and Warren are basically spot on with respect to the “game” being “rigged.”

                    i’m guessing no one wants us to turn this into a Bernie thread.
                    Click to expand…


                    I guess you could be described as a fiscally conservative socially progressive individual maybe? That is what I think of myself…well, sort of…then I pick sides with whomever I align with the most, but it is a very imperfect fit.
                    Click to expand...


                    A fiscally conservative social liberal should be a libertarian, but the party on offer seems to be full of wingnuts.
                    Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

                    Comment


                    • #11
                      Yes, Libertarian in concept -- the party is totally different unfortunately (didn't stop me from voting for them in California despite Aleppo).

                      I hoped for a tweaking of the plan to repeal the medicaid expansion and reappropriate the tax funds to a more meaningful alignment of health care that would buoy health systems/providers that don't go back to uncompensated care model of pre-obamacare.  most reasonable well to do folk don't mind taxation if reasonable taxed and good stewards to it.

                      I would say due to the complete lack of bipartisan creation and implementation has led to the equally lack of bipartisan to correct the initial creation.  --shaking my head----where's that Gang of Eight???

                      Comment


                      • #12
                        This bill sucks for a lot of reasons, but I would love hsa contribution limits to double.

                        Comment


                        • #13
                          Libertarianism is a cute idea, but it seems to be a facade for something far more dark in reality.

                           

                          I wasnt and am not a big fan of the ACA, but to act as if this bill was anything other than a huge targeted tax break is to act wholly ignorant. I dont mean whats in this bill itself, rather in order to enact any of the other tax cuts they want in the future they need the breathing room this bill gives them. That is the 100% already admitted only driver of this bill in reality.

                          Sure, there may be some terrible articles/headlines/takes (I have not read them, basically over the media zoo lately), but thats the literal admission from the folks writing the bill, so not sure what the fuss is about.

                          Comment


                          • #14
                            Not sure how you can be fiscally conservative and socially progressive in the Bernie sense.  That's the opposite of fiscal conservatism.  You can be fiscally conservative and socially progressive to the extent that you support equal treatments, rights, etc.  Indeed that is libertarian.  But once you go down the dark path of deeming everything a "right" it lends support to new programs paid for by someone else's money, subject to the whimsical notion of fairness (which doesn't seem to ever bear resemblance to a stable integer).  And since our government is the least efficient segment of our economy, furthering wasteful spending with new programs, it defies logic that Bernie's brand can overlap with fiscal conservatism.

                            I disagree that the current repeal bill is solely a tax break.  True, there is that.  But since it will be saving us hundreds of billions over a decade it must also be judged as an attempt to reign in entitlement spending, which has been a talking point by the GOP since the dawn of man (rightly so IMO given our nation's poor fiscal health).

                            Anyhow, as for the original post:

                             

                            Comment


                            • #15
                              @ENT - true, this piece is more than a simple tax cut.  It caps Federal spending on Medicaid and moves administration to the State level.  That's HUGE.  A cautionary tale on cap and indexing that we all here can attest --  the medicare spending caps of 1990s that resulted in the yearly 'doc fix' until finally remedied.   We shouldn't recreate that on a larger scale with the medicaid 'cap'

                              IMHO - medicaid expansion was a very inefficient and expensive way to cover healthy folk (a whole other Oprah show than current topic), and my HOPE is that the fruit borne from this Republican experiment allows for some right sizing of insurance for the each segment instead of single size fits all.  The State level exclusions are somewhat concerning, but it's true that State tends to reflect its population more correctly than the Federal level --- usually.

                              Comment

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