Sunday, October 13, 2013

The Problem with Obamacare

I have stated my views on health care in previous posts (August 2009).  The real problem is that it costs too much.  The Affordable Care Act does not reduce health costs; even its authors stated that was not their intent.  Instead, it uses the time-worn socialist solution which is to subsidize the costs with taxpayer money.

In my previous posts, I stated that more than 30 cents out of every health care dollar goes to insurance companies.  The Affordable Care Act mandates that everyone buy health insurance.  It does nothing to reduce the amount physicians pay for malpractice insurance.  And it does nothing to reduce the excessive costs of prescription drugs.  Instead, the act places taxes on the sale of individual homes, fishing gear, and other things to subsidize the ridiculous charges of the insurance policies.  And it used taxpayers' money to hire hundreds of people to administer the program.

A letter to the editor in the October 13th Los Angeles times offers one example to illustrate the problem:

  The real question concern­ing U.S. medical care is not whether Obamacare allows people who could not buy in­surance the ability to buy in­surance or whether a 26 year old can stay on his or her par­ent's policy; it is why a routine appendicitis bill is $59,000.

  The Wall Street Journal published an article about a man who needed a hernia op­eration. Because of his high-deductible insurance policy, he was responsible for $20,000 of the estimated $23,000 for the operation, and the hospital wanted the $20,000 upfront.

However, after bypassing in­surance and working with his doctor, they negotiated a cash price and got his surgery done for around $3,000 saving him $17,000. This scenario appears to be all too common with most medical procedures paid by third-party insurance pay­ments where there is no price transparency.

The ACA will not solve this price problem, but will simply hide it in a massive income-transfer scheme that will do little to reduce costs or make the delivery of medical ser­vices more cost efficient.

Eventually, unlimited de­mand and expanded third-party, medical-care payments that insulate consumers from paying for services rendered will cause an unsustainable rise in overall medical costs, which will lead to price con­trols, and when they fail (and they will), to rationing of med­ical care (death panels).
    Richard Walborn
      Anaheim
 
 
 
My readers know that I am not a Tea Party fanatic.  In fact, I see some merit in a single-payer approach to health care.  But the only way to make health care truly affordable is to outlaw the cost excesses currently imposed by insurance companies, pharmaceutical companies, and other wealthy contributors to the campaigns of our elected Congressmen.  I don't think that will ever happen.

Friday, August 10, 2012

Tax the Rich

President Obama and Governor Brown of California want us to increase the Federal and State taxes on the rich people, so that they "pay their fair share."

I have written in the past about the real unfairness of the tax code.  [Taxes, Taxes, Taxes, July 18,  2011] 

For a while, though, I found the "pay their fair share" mantra extremely seductive.  It's easy and attractive to go after the 1%.  It's so attractive that the supporters who ride the "tax the rich bandwagon" either don't bother to check the math, or they don't believe the facts, or they don't want to hear the facts.  If taxing the rich does not solve our governments' debt problems, we will have to come up with more complex and painful solutions.

First, to increase the taxes on the rich will not solve the problem. If we tax the top 1% of our income earners at a rate of 100%, it will not solve our problem.  There are not enough people in the top 1%, and their total annual income would not significantly reduce the debt.

Second, the rich people (with a few notable exceptions) are already paying more than their fair share of taxes:
  • The top 20% of taxpayers earned 51% of the nation's personal income, but in 2009 they paid 68% of the total federal taxes.  That's more than their fair share.
  • The top 1% of taxpayers earned 13% of the income, but paid 29% of all federal taxes.  That's more than twice their fair share.
  • The bottom 20% of taxpayers earned only 5% of the income, but paid only 0.3% of all federal taxes.  That's not a fair share, but most of us concede that the very poorest should not have to bear a tax burden.
Some simple arithmetic shows that the middle 60% of filers earn 44% of the income and pay slightly less than 32% of the taxes.  That's certainly not a fair share, but our politicians are wooing this middle 60% for their votes. 

Remember, too, that 46% of tax filers pay no federal taxes at all.   That's not just poor people.  Almost 7,000 people in the top 1% pay no federal taxes.   Many more of that middle 60% also pay no federal tax as well, but a lot of people are falling hook, line and sinker for the "tax the rich" slogan.

Some people consider taxes just to be a fee for the services the government provides.  If that is the case, then 46% of our people are gettting all those govenment services free of charge, while the rest of us are over-paying for them.

Reducing government spending by itself will not reduce the nation's annual deficit.  Some tax increases will be necessary.  But, like it or not, some of the freeloading 41% will have to chip in, including some of that middle 60% who are not paying their fair share.
 
Our Congressmen don't want to tell us that.  They do not want to propose specific, realistic debt reduction plans.  If they do, we the people won't re-elect them.  So instead, they throw us the "make the rich people pay their fair share" slogan.   Don't fall for it.

Sunday, January 01, 2012

The Top 1%--More Things to Consider

My friends will tell you that I was critical of the top 1% for decades before the Occupiers started their demonstrations.  My previous posts on income taxation discussed the issues to some extent.  We need, however, to observe some facts about how taxation relates to income at the federal level.
  • In The Week magazine I read that people in the top 1% of income earners earned 20.3% of the nation's total income and paid 21% of the nation's income tax.
That would make it seem that the top 1% are paying their "fair share," wouldn't it?  But consider the following:
  • The "income" discussed is reported, adjusted gross income.  We should be aware that the top 1% do not report all of their income, much of which is sheltered in off-shore accounts and received in unreported cash transactions.  In addition, the top 1% find that more of the "adjustments" apply to them than to people whose entire income comes from weekly paychecks.
  • Statistics on income reveal that roughly 7,000 of the top 1% payed no federal income tax at all, even though they received sufficient income to place them in the top 1%.
One of my best friends eases the pain of paying taxes by considering them as "fees for services received."  This approach does not work for me, and here is why:
  • Each of those 7,000 of the top 1% who paid no income tax probably used about the same amount of Federal services as I did, but they got the services free while I had to pay.
  • Each of the 47% of wage earners who paid no income tax used more Federal services than I did.  They collected welfare, food stamps, unempoyment benefits, and medical care, but did not pay for any of the Federal services they received.
  • Count up the taxes:  the top 1% pay 21% of the taxes; the bottom 47% pay 0% of the taxes.  That means the remaining 52% of wage earners are paying 79% of the taxes.  That same remaining 52% do not consume even half of all the Federal services.
So, the people who take the beating are the middle 52% of wage earners.  I am a 52-percenter.  Chances are better than 50-50 that you are a 52 percenter.

Consider, too, that the 435 persons in Washington, D.C. who write and administer our laws are part of the 1%.  They carefully craft and enforce our tax code so that the bottom 47% get a free ride (in return for their votes).  And a good share of the embattled 52%, who are either too uninformed or too busy to figure it out, continue to vote for the politicians who are robbing them blind.

Some relatively simple changes to the tax code could reduce or eliminate these inequities.  Don't count on the representatives we elected in the last few years to do that.  They are too busy feathering their own nests at our expense.

If all of us in the 52% could organize into a political party, we would have a majority of the votes.  We could elect some folks who are willing to make the needed changes.

Saturday, July 23, 2011

Raise the Debt Ceiling

It's all up to Boehner and Obama. The right answer is in the middle: a lot of spending cuts and a few "tax increases." In other words everyone will have to accept some burdens he will not especially like.
Obama mus appease the far left by getting as many "tax increases" as he can, and Boehner must appease the tea party by getting as few "tax increases" as he can. On spending cuts, their commitments to the extremes force them in the opposite direction. When the compromise is finally achieved, both men will get a lot of criticism from the extremes.
The debt ceiling increase is being held hostage to both issues because it requires a commitment to reduce the debt, and the way to do that is to decrease the annual deficit so that we pay down the debt faster than we borrow.
I put "tax increases" in quotation marks because neither closing some loopholes for large corporations and extremely wealthy individuals nor eliminating federal subsidies for oil companies with multi-billion dollar profits constitutes a tax increase.
To appease the extremists, Boehner and Obama are going to play hardball right up to the last second. That is pretty scary for all of us in the mushy middle.

Monday, July 18, 2011

Taxes, Taxes, Taxes

The Democrats tell me, "Tax the rich people."
The Republicans tell me, "No new taxes."
It would seem there is no middle ground, no compromise. But I believe that there is a middle ground. I just look at the facts and "loosen" the definition of 'new taxes.'
First, some facts, quoted from Bruce Bartlett at NYTimes.com:
  • 46 per cent of tax filers pay no federal income taxes.
  • 78,000 households with incomes of $211,000 to $533,000 will pay no income taxes this year.
  • 24,000 filers with incomes of $533,000 to $2.2 million will also pay zero.
  • 3,000 filers with incomes of over $2.2 million will also pay zero.
  • Many households with incomes under the median income could, by foregoing some luxuries, afford to pay a small tax.
  • Finally, I read elsewhere that 67% of American Corporations pay no federal taxes--I am sure that not all of those are without profit of some kind.
Let's make it clear: I do not feel the need to extract tax from a household that does not make, or barely makes, sufficient income to house and feed themselves and transport themselves to work. Likewise, I do not believe that a business that lost money, or did not make a net profit before taxes, should be forced to pay. But the folks who are paying their taxes are paying as much as 25%, or more, of their income, and so probably should most of those 105,000 filers who plan to pay none.
I said I want to 'loosen' a definition. By that I mean I do not accept the position of some conservatives that the elimination of an existing tax credit, loophole, or federal subsidy constitutes a new tax. We should be able to eliminate loopholes. A company that makes a multi-million dollar profit after taxes does not need loopholes, tax credits or subsidies to stay in business.
So, as I see it, the middle ground is to close as many as possible loopholes in the code, and eliminate tax credits and federal subsides for businesses that can make a profit without them.
There are 105,00 households and many corporations out there that need to step up and pay their fair share of the federal taxes that are already part of the law. It probably is not enough to balance the budget, but it would help significantly. Our legislative and executive branches of government need to look at it this way, and act accordingly.

Sunday, January 16, 2011

The government should...

A letter to the editor in today's L.A. Times laments the fact that many young people who show the early signs of mental illness do not receive the attention or the medical help they need to keep them from becoming violent. The author continues with a paragraph that begins, "The government should respond immediately by..."

Now I recognize that the people of our nation could do much more in the early detection and treatment of mental illness, but I do not accept that it is necessarily the responsibility of our national government to provide the resources, or to force people to give treatment.


Over and over again people ask congress to solve problems that it has neither the intelligence, nor the resources, nor the funding to resolve, e.g. "Housing costs too much for young folks to buy their homes, The government should..." or "Health care is so expensive that many cannot afford it, The government should..." or "Corporate executives make too much money, The government should..."

And on it goes, until someone starts to complain that the government is creating a "nanny state." or that it constrains us with "fascist control" of our daily lives.

Too many people want to have the government solve all of our problems for us, as opposed to solving problems ourselves as individuals, as families, or in local communities.

Let's all grow up, stop being lazy, and start handling our own problems.

Sunday, December 19, 2010

Christmas 2010

Although I consider me to be an agnostic, I was raised in a Christian family. My parents and my brother were not regular church-goers, but they believed in God. From my early years into my teens, Mom, Dad, and I did attend church frequently. I was confirmed in the Methodist Church, and became a member.

In college, I sang in an interdenominational chapel choir, and therefore attended church every Sunday. Singing sacred music brought me closer to God than any other experience I have had. I still feel closest to God at Christmas time.

Maybe that's why two recent events bothered me so much. They seem to show how far from the true essence of Christmas our society is drifting.

  • The first was an advertisement on the local radio station: A gun shop is inviting us all to their Christmas sale! Now I am not a gun control fanatic; I was a member of the NRA for a few years. I recognize that the sporting use of firearms is a pleasure enjoyed by many. But to me, Christmas is, among other things, a celebration of PEACE. It seems both blatantly commercial and totally incongruous to suggest that we buy Dad some ammunition for his Glock, or buy Junior an AK-47 for Christmas.
  • The second event was an item in the local paper: The Directors of the Chrystal Cathedral cancelled it's annual "The Glory of Christmas" pageant. With revenues decreasing, the church has not paid many of the bills for last year's pageant. The founding family of the C. C. paid their own generous salaries, however. They each take home hundreds of thousands of dollars, but they do not pay the person who cleans the costumes for the pageant, or the one who provides the horses, camels, and other animals.

Because Christmas is a season of peace and good will toward men, it can be embraced and enjoyed by everyone, even those who are not Christians. But Christians especially should live up to the tenets of their faith. And merchants should certainly not stain the holiday with the promotion of fire arms. If those who celebrate Christmas do not abide by its basic premises, then it is they, much more than the atheists and the politically correct "happy holidays" idiots, who are mocking and debasing Christmas.

For Bonnie and me, Christmas is more a secular holiday than a religious one--a time to be with family and to enjoy the process of giving. I sometimes have a hard time "warming up" to the Christmas spirit, but in spite of the above unspirited events, I am looking forward to Christmas more than usual this year, being a little more charitable, and listening with special love to the music of the season. So, have a Merry Christmas everyone!