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Well...something has to be done. I don't necessarily agree with his plans in their entirety, but I applaud him for having the balls to put something out there. Kicking the can further and further down the road is far less admirable, IMO.
An easier sell? Possibly. A better plan? Not IMO. FICA taxes are already over 15% and, yes, even the lowest income people are paying them.
That is the thing you don't raise the rates on FICA. The easy thing to do first is abolish the S-Corp loophole, which Republicans are staunchly against (probably because they want to abolish SS and Medicare anyway). What the S-Corp loophole is is basically say you are a fairly successful sole practicing attorney who can bring in $600,000 a year. Even though your labor efforts are making the $600,000 you pay your self a reasonable salary (employment income) of $250,000 and take the $350,000 as business income.
You pay SS up to the limit and medicare on only the $250,000 and get the $350,000 medicare tax free. If you simply eliminate this and say employment income = actual employment income then you can rake in a bunch more in medicare taxes.
The other rule is that SS is capped at a certain amount meaning as a matter of course you pay a lower rate the more you make above the cap. Simply remove the cap and combined with the elimination of the S-Corp rule you don't even need to raise rates to rake in a bunch of money.
Finally, though I think this is far less desirable, expand SS and Medicare tax to dividend income.
All of this can be done without raising rates or monkeying with capital gains.
P.S. not to mention the bonanza you could get by simply removing the carried interest rule and classifying that as employment income (which is what it actually is).
Oh, you won't be pushed off a cliff...
You are exempt because you are 67 and love "Eddy Munster"
How generous of you
I'm against an individual mandate.... but don't you and "Eddy" have to tell me why
you need a hip transplant when you turn 97 Coughing up a bigger co-pay grandpa
or do we just push your wheel chair "off that cliff"
A single payer system really IS the ONLY answer to what ails America's medical insurance problem and needs of ALL it's citizens.
Not just for the elderly, non productive ones....
I don't think anyone ever suggested having any "death panels" and I am anything but an Obama supporter. I believe it's a fear tactic that's just as bad as the allegations by the Democrats that Republicans' plans will "push seniors off a cliff."
Having said that, my dad is your age but he is not taking SS yet. He's still working (by choice, because he enjoys what he does). He is already on Medicare though. He laughs at the Democrats' absurd assertions about how the Republicans' plans will "push seniors off a cliff" and the like. He is in the "evil" top 2% (not the 1%), so he could handle changes better than most seniors (not that changes are being proposed for current seniors), but he still needs and will need Medicare.
That is the thing you don't raise the rates on FICA. The easy thing to do first is abolish the S-Corp loophole, which Republicans are staunchly against (probably because they want to abolish SS and Medicare anyway). What the S-Corp loophole is is basically say you are a fairly successful sole practicing attorney who can bring in $600,000 a year. Even though your labor efforts are making the $600,000 you pay your self a reasonable salary (employment income) of $250,000 and take the $350,000 as business income.
You pay SS up to the limit and medicare on only the $250,000 and get the $350,000 medicare tax free. If you simply eliminate this and say employment income = actual employment income then you can rake in a bunch more in medicare taxes.
Have any figures on how much this would bring in?
Quote:
Originally Posted by Randomstudent
The other rule is that SS is capped at a certain amount meaning as a matter of course you pay a lower rate the more you make above the cap. Simply remove the cap and combined with the elimination of the S-Corp rule you don't even need to raise rates to rake in a bunch of money.
It's capped - off the top of my head, I believe it's at about $106,000 this year - because it corresponds with the amount you can receive when you are eligible. It's not meant to be a welfare program; it's meant to be a program where you get an amount that relates to what you put in.
Quote:
Originally Posted by Randomstudent
Finally, though I think this is far less desirable, expand SS and Medicare tax to dividend income.
All of this can be done without raising rates or monkeying with capital gains.
P.S. not to mention the bonanza you could get by simply removing the carried interest rule and classifying that as employment income (which is what it actually is).
Again...how much would this bring in? I think the system has far too many problems to solve by simply slightly (and it would be very slightly) expanding the tax base.
And so will productive workers need affordable health care premiums; the ones who pay taxes now and will continue to pay taxes to support your father, once he is no longer productive -
which by the way, will be a given....down the road.
The largest amount of medical expense costs are incurred by the elderly during the last 6 months of their life.
And so will productive workers need affordable health care premiums; the ones who pay taxes now and will continue to pay taxes to support your father, once he is no longer productive -
which by the way, will be a given....down the road.
I know that, but that's really for a different thread.
Quote:
Originally Posted by pollyrobin
The largest amount of medical expense costs are incurred by the elderly during the last 6 months of their life.
Yes. That's a different issue though. This is why I think we need a different system for people in their 60's and even 70's (especially early 70's) who are still relatively healthy...because we are talking about two entirely different groups.
It's capped - off the top of my head, I believe it's at about $106,000 this year - because it corresponds with the amount you can receive when you retire. It's not meant to be a welfare program; it's meant to be a program where you get an amount that relates to what you put in.
Again...how much would this bring in? I think the system has far too many problems to solve by simply slightly (and it would be very slightly) expanding the tax base.
It would bring in more then you would expect, because Medicare taxes are not capped and a very small, but very wealthy base has the potential to bring in a lot. E.g. the estate tax has only about 4,000 returns a year but that yields 22-24 billion dollars.
Though combined the closure of the two loopholes would bring in about 32 billion over 10 years furthermore if you throw in the Stock options loophole (again a case where compensation isn't taxed as compesation) that is another 25 billion most likely all to medicare. I expect they would be much much higher though if you removed the SS cap. A purely basic math guestimate, since most of those folks would be already tapped out on SS income which is taxed at slightly more 4X the rate of Medicare, would bring upwards of 200 billion + into SS without raising rates.
Honestly if you are worried about the deficit the big thing (which I avoided for simplicity, and in part because I don't necessarily think it is a good idea, but it might be. It would also trigger a giant on the one hand on the other hand discussion sake would be the capital gains loophole).
Last edited by Randomstudent; 06-24-2012 at 10:48 AM..
This is why I think we need a different system for people in their 60's and even 70's (especially early 70's) who are still relatively healthy...because we are talking about two entirely different groups.
There is no difference in what should be "affordable" for the non productive *a non working
semi healthy 70 year old, and what should be an "affordable" insurance premium for the working productive tax payer. An old person's life/health is no more valuable than any one else. Neither is a disabled
child's/adult from that of a healthy one. We don't need a "different system for folks in their 60's or folks in their 70's or folks in their 20's or folks in their 40's. We need one system - one pool - one payer.
If you want to "emotionalize" an insurance payment, that's one thing, but if you want to be fiscally
responsible/sound, then a single payer system is the only solution.
There is NO ONE that can prove a single payer system would cost America more than what we
have now. If you love Ryan so much... prove to me, why anyone should subsidize
your father or anyone else for that matter. Cause guess what, no one on that list, is more special than another. Not a damn one of um....
There is no difference in what should be "affordable" for the non productive *a non working
semi healthy 70 year old, and what should be an "affordable" insurance premium for the working productive tax payer. An old person's life/health is no more valuable than any one else. Neither is a disabled
child's/adult from that of a healthy one. We don't need a "different system for folks in their 60's or folks in their 70's or folks in their 20's or folks in their 40's. We need one system - one pool - one payer.
If you want to "emotionalize" an insurance payment, that's one thing, but if you want to be fiscally
responsible/sound, then a single payer system is the only solution.
There is NO ONE that can prove a single payer system would cost America more than what we
have now. If you love Ryan so much... prove to me, why anyone should subsidize
your father or anyone else for that matter. Cause guess what, no one on that list, is more special than another. Not a damn one of um....
It would bring in more then you would expect, because Medicare taxes are not capped and a very small, but very wealthy base has the potential to bring in a lot. E.g. the estate tax has only about 4,000 returns a year but that yields 22-24 billion dollars.
Though combined the closure of the two loopholes would bring in about 32 billion over 10 years furthermore if you throw in the Stock options loophole (again a case where compensation isn't taxed as compesation) that is another 25 billion most likely all to medicare. I expect they would be much much higher though if you removed the SS cap. A purely basic math guestimate, since most of those folks would be already tapped out on SS income which is taxed at slightly more 4X the rate of Medicare, would bring upwards of 200 billion + into SS without raising rates.
Thanks for the link. I agree some loopholes need to be closed, but I don't agree with eliminating the SS cap unless we also eliminate the cap on benefits.
For the record, I am much less inclined to support privatization of Medicare than privatization of SS.
Quote:
Originally Posted by Randomstudent
Honestly if you are worried about the deficit the big thing (which I avoided for simplicity, and in part because I don't necessarily think it is a good idea, but it might be. It would also trigger a giant on the one hand on the other hand discussion sake would be the capital gains loophole).
I don't consider having separate capital gains taxes and capital gains not being subject to FICA taxes to be a "loophole." But, it seems you at least (may) agree with me.
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Coughing up a bigger co-pay grandpa
