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On Takers and Payers
Remember the big flap about the Supreme Court ruling on the Affordable Healthcare Act (AKA – Obamacare – ACA)? The issue that made the headlines was that the Supremes ruled that ACA was legal, provided that the penalty for not having health insurance was collected as a tax.
This is a big deal as the penalty ($700 a year per person) was supposed to be the discipline that forced people to go out and buy their own insurance. One either acquires health insurance, or they pay a price.
The CBO took a look at this last week (link). The results surprised me. The reality is that few people will end up paying the penalties. So the basic premises of ACA is actually a fraud.
CBO estimated that there will be 30Mn uninsured in 2016 when ACA goes into effect. Of that 30Mn, the following groups will be excluded from paying the penalty:
1) Undocumented workers.
Really? But that is 10Mn people; a third of the problem!
2) Religious Beliefs
Huh! What religion is that? If it gets you out of paying taxes, I want to join!
3) Native Americans
Okay, after all, it is their land.
4) Individuals and families with low incomes.
I can live with this. But isn’t this where we are today? Poor people don’t have health insurance today, and they don’t have to pay any fines. In 2016 they will still have no insurance, and they won’t have to pay any fines. What has been accomplished?
5) Anyone who does not file federal income taxes.
This is directed to those with income of less than $10k per year (same as #4), but there are an awful lot of people who don’t file taxes who are making much more than the minimum amounts. Most waiters and bartenders would fall into this group.
6) Individuals who can’t afford the cost of health insurance.
The annual cost of health insurance must be less than 8% of an individual’s income for the penalties to apply. What is this new insurance policy going to cost? If the answer is $250 per month (too low in my opinion) it means that anyone with an income less than $37,500 is excluded. If the cost of that Ins. policy is $500 a month (a more reasonable estimate), then anyone who has annual income of less than $75,000 would be excluded.
With these carve outs the number of individuals who would be subject to the penalty falls to 6Mn (80% drop). But it gets worse:
Among the uninsured individuals subject to the penalty tax, many are expected to voluntarily report on their tax returns that they are uninsured and pay the amount owed. However, other individuals will try to avoid payments.
Oh boy! How many of the remaining 6Mn will “voluntarily” pay the penalty, and how many will seek to “avoid” it? At least half will avoid it. There is not much risk of getting hit by the IRS if one’s income is < $75,000. The IRS does not have the manpower to chase after those who “avoided” the penalty. The CBO recognizes that the actual amount of fees collected is subject to:
the ability of the Internal Revenue Service (IRS) to administer and collect the penalty.
The only people who are going to end up paying are those who have something to fear from an audit.
Households with income that exceeds $60k are estimated to constitute about one-third of people paying penalties and to account for about two-thirds of the receipts from those penalties.
The CBO reckons that Uncle Sam will collect about $8Bn a year in fees. This money will be used to offset some of the costs of the uninsured. The Penalty is also the “stick” of ACA that forces people to get insurance by one means or another. I see it differently:
- Post the introduction of ACA there will still be 30Mn people without insurance. These people will still get sick or injured; they will continue to be a drag on everyone else.
- The fees/taxes that are supposed to provide discipline and revenue for ACA will accomplish very little. I will be amazed if the penalties total more than $2Bn a year (peanuts). There will still be 30Mn people without insurance, and they will get sick (not peanuts).
- The Administration and Congress have cooked up a deal that got amended by the Supremes that will result in a great new opportunity for people to cheat on their taxes. Millions will take advantage.
- ACA is a wealth redistribution program. ACA will create more TAKERS; the PAYERS will foot the bill.
++
Mitt probably lost any chance he had with the election with is words about the “other” 47%. But the fact is the country is divided between Takers and Payers. The CBO head, Doug Elmendorf had this to say about the dilemma the country faces:
Formidable? I would say impossible.
Four years from today the Taker - Payer ratio will exceed 50%. The argument then will be the same as it is today. In order to pay for the cost of government, taxes will have to be much higher than the historical norm. But the necessary higher taxes will drag on the economy, and growth will be far less than potential. Sub-par growth means high unemployment and low tax receipts. The vicious debt spiral will continue.
Where does this lead us? Elmendorf's thoughts:
The conclusion is that we are headed into a crisis, and when it happens we will not have the resources available to fight that crisis off. What kind of plan is that?
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The people from Detroit left their locale. Just check out the population decline via the census data. Me; I just hope that Detroit isn't a trend setter.
I live in Michigan.
Explain what you mean.
There is already a levy on unused cash by individuals...it's called ZIRP and QE.
It punishes people who save money.
No better argument or act for going Galt. Bad policies beget bad results.
Stupid politicians, tricks are for dicks. Oh wait, that's a circular saying.
Go fuck yourself government!!
+ mucho
My vote for "Best Reply of the Day"!
Ditto...
payers and takers, huh?
who is the taker, really? the supplier of capital or labor? the capitalist puts up his capital, the laborer puts in his time. who is the winner, or rather net 'taker'?
there would be a lot more payers of fed income taxes (on top of FICA of course) if wages were anywhere to close to the economic output of said labor.
the takers are the corporations, the payers are labor.....
Do you include the unionized teachers of Chicago in that payer class ?
Seems that working less than 7 hours a day for 9 months a year does not come close to your description "economic output".
Payers and Takers? Why hasn't anyone mentioned the Federal Reserve itself? For every Dollar the Fed prints from 0 capital they get interest. That interest is passed on the the Private Banks that own the Fed.
So, I would say that the biggest Takers are the Private Banks that own the Federal Reserve.
We all have to remember that there was no Income Tax prior to the Origination of the Federal Reserve.
Everyone looks around to affix the blame but does not see the 800lb Gorilla in the room.
and people wonder why they "take" their jobs elsewhere...
Jobs going to China for 50 cents an hour wasn't even discussed in the republican debates. It's the elephant in the room. The only way to fix it is to increase the Chinese currency by 100%. Then in 10 years increase it by 100% again. Then taxable factories and wages can come back to the U.S. Both parties (that the banks control) want China to double the value of their currency.
Great piece, Bruce. This thing isn't at all what people think.
One of the real effects will be to destroy small business, especially in low margin, high employment areas like food service. McDonald's got a pass, by Bribing Obummer. How can that be legal? There will be a whole new set of legal challenges when people see the effects of this shit. Individuals can and will tell the gubbermint to go to hell. Business owners, not so much.
We should never forget, the treason of John Roberts.
I believe the treason was committed by the people that put Roberts into his position. Roberts was "just following orders". If the man ever had an original idea it would die of loneliness.
The insurance industry, aka protection racket, is owned and operated predominately by the Kosher Nostra, a group that is very familiar with rackets historically. They arranged for their man Roberts to be appointed by the Zionist neocon Bush-Cheney administration.
Don't forget Ginsburg, Kagan,and Sotomayor; progressive drones that absolutely detest the constitution.
What a joke the words "progressive" and "liberal" have become in the 21st century. They are just code words for the religious belief in government. There is nothing liberal or progressive about believing that governments, the most destructive, wasteful, violent, irresponsible collections of human beings, are actually a force for good. The religious zealots of centuries past have become the government zealots of today. Their ideas are just as silly and destructive as those of the inquisition. And several such zealots wear the robes of the usurping body known as the Supreme Court. It's a sad day for the nation.
Very True. And I hope everyone on this board understands why governments and nannycrats are this way: (say after me) Because they are spending other people's money (OPM) and have no profit motive. When you're "investing" OPM you don't really give a shit-I know I wouldn't. (Hence high speed rail, electric cars, wind and solar power "investments" etc)
SPOT ON!!!!!!
+1000
This "47% pay no taxes" meme has gotten completely out of control.
Here is a rough breakdown of these "takers" (for the full details see the link at the end).
Yes, 47% of Americans pay no federal income tax.
Are these people paying any taxes?
A.: Yes, the vast majority are.
Who are they?
ANSWER 1: Four out of five households who pay no federal income tax earn less than $30,000.
ANSWER 2: 44% of households paying no federal income tax are the elderly.
ANSWER 3: And about 7,000 of the households paying no federal income tax include millionaires.
Are the rich supporting tax breaks for lower-income households?
A.: Tax breaks actually benefit high-income individuals more than low-income individuals.
Who is most recently responsible for these people not paying federal income tax?
ANSWER 1: 7.8 million families stopped paying federal income tax because of Bush tax cuts.
ANSWER 2: And 95% of working families and individuals received tax cuts under Obama’s stimulus plan.
ANSWER 3: But the percentage of people not paying federal income tax has been rising since the 60s.
http://www.learnvest.com/2012/09/why-half-of-americans-dont-pay-federal-...
It's actually worse. Hell we pay some people to fill in their tax form in the form of tax credits. The fact that our system of taxes is irrationally complex makes it hard to figure out how much anyone really pays in taxes. Taxes on corporations essentially become a flat tax on the public; wink wink they just add it to the price of the products people. Look at your utility bills they are loaded with taxes unless your locality like mine has assorted relief programs to help ________.
if wages for middle and lower income people had kept up with gdp growth over the past 10-30 yrs, many more people would be paying addl fed income taxes.
since wages have not, the only way to attepmt to keep purchasing power up has been via the tax code: 'you dont make enough to live and save, so youre not going to get taxed' essentially.
3% of the populace 'earns' well over 33% of national income......forget the 99%ers...it truly is 97% vs 3%, now who are the takers again?
Three wolves; two sheep voting on who gets fleeced...
How does supporting endless breeding in the ghetto build a great nation?
Governments steal in myriad ways. What they do with the loot is the worst corruption.
Is there a point behind your comment of just a general hatred of anyone not white?
You say "ghetto". We all know what that is a catch phrase for, yet you manage to give "trailer trash" a pass with that comment. Are you under the belief that there are no low rent white trash meth smoking budwiser chugging perpetual breading machines living on the dole?
Bud? No. PBR. Bud Lite for weddings.
Kaiserhoff AND yerself are correct, but HOW is increasing the Nanny State gonna solve it?
Bruce: "The conclusion is that we are headed into a crisis, and when it happens we will not have the resources available to fight that crisis off. What kind of plan is that?"
Don't you listen, Bruce?
"Never let a good crisis go to waste". Rahm Emanuel, Emperor of Chicago.
Anti-Semitist. ;>)
Bruce, what is with the comment about this being the land of the "native Americans"? You really fell down on that one. Did they not come here from someplace else, just like all the rest of us? The question is about timing. They crossed some land bridge from Asia to get here at some point in their history. How does that make them "native Americans"? They are more likely native Chinese.
It is sad to see political correctness slip in to your work which is generally really good.
Recently there is talk that some of the "native Americans" walked across the Atlantic from France/Spain during the Ice Age.
West village idiot is right - at least the idiot part - this is disingenuos horseshit: by his line of reasoning, the only 'natives' on the planet are living in north eastern Africa, where genus Homo sapiens appears to have started, and spread out from there. And the apes were actually there first, so they weren't natives either.
By all present anthropological evidence, Native American Indians were present in North America in general, and the present USA in particular, 13 to 15 thousand years before cometh the Europeans. That is about 4200 generations (give or take) of human habitation, and that, asshole, makes them 'native' - and they were not 'Indians' - that came from geographic ignorance.
Look, we ripped of this place from the natives fair and square, so get over it. 13-15 thousand years from now, there won't be any 'Americas' either, but hopefully the intelligence level will have got a bit higher than this kind of 'there ain't no natives here' argument. Sheesh!
Soooo.... you're saying that these peoples were giving birth to kids when they were 3 to 4 years old? For some reason the first thing that popped into my head was trying to give a "birds and the bees" talk to a 2 year old, and nothing made much sense after that point.
They have found bones in North America dating before the migration from Asia. They are caucasian.
White man was here first. White man is native to North America.
That's right. Lots of bones. In Florida.
So let me get this straight? At the point when humanity was just starting to expand small groups of nomadic peoples could lay eternal claim to the entire North American landmass? This ownership would be complete and total, even though you probably can't tell me specifically who owned what.
You also do not address the behavior of the "natives"? Under what rules did they live? Did they ever conquer, or kill, other people?
Many of the actions of our government during the "settling of the west" were pretty despicable. But history is littered with conquest and change. Attempting to rewrite history, whether it is ownership of North America, the history of slavery, with reparations to some and no blame for others. This is dirty business. Just look at what such perpetual ownership has done to the Middle East. "We deserve this land because our ancestors owne this shitty little piece of dirt 72 generations ago."
Good luck getting Pandora back into her revisionist box.
"You also do not address the behavior of the "natives"? Under what rules did they live? Did they ever conquer, or kill, other people?"
lol...asking a history revisionist to revise their version of history is like asking a masochist to renounce their pleasure of pain...they'd rather cut their own tongue out ;-)
Let me clean up this mess. There was no "America" until WHITE COLONISTS established it. By liquidating a chaos of 400 asiatic tribes. Now draw appropriate conclusion.
So are you sayng that Native Americans come from somewhere else?
As a matter of fact, they did. Native in this instance is relative.
The indians who greeted the Pilgrims when they arrived did not get to the sea-shore by crossing some land bridge. They were already here. Because. They were born here. Hence, native. The pilgrims weren't born here. Hence, not native,
and precisely who was here before them?
The Kingdom of the Hobbits ruled by Samwise VIII
I'm a native American. Barry, on the other hand...?
Let's see. My family, (both sides), have been in this country since before it was a country. When do I get to be a "Native American"?
Most Americans are Naive Americans.
Given your comment above about "ghettos"...I somehow doubt you are "Native American". It strikes me as incongruous.
Words have meaning, Short Bus. I mean I was born in America. Libtards believe in Africa for the Africans, but never Europe for the Europeans. The only consistency of the left is in hatred of all things decent and productive.
They are against anything that goes against their hunter-gatherer worldview.
Words have meaning, Short Bus. I mean I was born in America. Libtards believe in Africa for the Africans, but never Europe for the Europeans. The only consistency of the left is in hatred of all things decent and productive.
Yes...words have meaning. Hence my original question: "are you saying that Native Americans come from somewhere else?"
What part of that did you not understand? What "word" possesed a meaning that you could not grasp? Am I speaking over your pay grade or are you just being deliberately obtuse in order to evade an answer that exposes the ignorance of your original comment?