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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.
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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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Good piece, Bruce. It's not going to end well. As you know, ACA was a giveaway to Big Pharma and Big Insurance. Sorta like the prescription drug benefit with Medicare that doesn't allow the Feds to negotiate drug prices. But that's another story.
Nightmare Flow Chart on Obamacare:
Obamacare Complicated? Check Out The Flow ChartSo, the "rich" pay for the poor, and the "rich" are considered anyone making $60,000 per year or more.
BIG govt.
Maybe if anyone had actually READ the thing, they wouldn't have passed it.
It was claimed to actually SAVE us money over 10 years. Does that include the cost of the monstrous increase in payrolls/retirement/benefits from all the NEW govt. agencies?
Surely, you can't be right. This was just our Great Father Obama looking out for our well being. He loves us very much. Now I think I will go drink a 32-ounce slushy to celebrate his greatness.
If you do that in NYC you might have to pay a fine....
Don't you mean, pay a sugar tax ?
Not to worry, Bruce; plans are underway to depopulate the planet; within a few years the feudal kingdoms will be established for "the good of the remaining serfs".
You know, the best thing that could happen to Mother Earth (from her point of view) would be if half the humans on it would go away. It would be nice if we would figure it out and voluntarily family plan the population down over time, but whether "depopulating the planet" is good or bad depends on your point of view.
Wouldn't the point of view be colored by whether you are the one being "depopulated" or not?
Isn't "depopulated" just a deceptively kind way of saying "exterminated"?
Weren't the Nazi's just "depopulating" Germany of the inferior class? Aren't the Japanese just "depopulating" the Ocean's of obese whales? Weren't the Hutu just "depopulating" the Tutsi in Rwanda? Doesn't it sound better like that? "Depopulating" turns a crime into a kindness.
I know, people get all worked up at the very thought of overall human population not continuing to expand exponentially. The words "Nazi" and "Hutu" come out. Reread my post. I said "family planning" over time. And yes, I am leading by example and only have two kids, you know, replacement level.
Nothing in my post referred to concentration camps or selective exterminations. We're currently at about 8 billion people more or less. If anyone thinks the world ecosystem can keep functioning as it is with, say, 16 billion, then they are the idiot.
I said "family planning" over time. And yes, I am leading by example and only have two kids, you know, replacement level.
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Leading by the example the 'american' way then.
How can the replacement level be the path to depopulate the world by one half?
Yet, the US Government pays the Welfare Mom's to have Babys and lots of them. For every Baby they get another $400. or more a month for 18 years.
People will look back on the 21st century and think we were silly to worry about over population. The world can support as large a population as human ingenuity allows. The world's population is actually on the verge of collapsing, even without any major conflicts or Spanish flu-like viruses. There continues to be latent growth due to the age distribution of the current population, however, the world's fertility rate is crashing. Many advanced societies have a birth rate in the low 1's. Many developing countrys' birth rate are crashing toward 2 and below. A large majority of the worlds population is aging rapidly, there will soon be far too few able bodied workers to support them. Skewed gender ratios in places like China and India make their birth rates far, far lower than reported. And we're always only 3 or 4 flu gene mutations away from a planet with hundreds of millions fewer people in it.
The world can support as large a population as human ingenuity allows.
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Maybe. But the world can no longer sustain that a large 'american' middle class.
The major sector 'Americans' have shown ingenuity is theft and there is a shortage of people to rob from on a world scale.
Too many 'americans', not enough indians.
The major target for thieving act is as usual, when a theft spree runs to that point, the thieves themselves.
And those who benefit the most from the 'american' theft spree is the 'american' middle class.
They are the ones left to be stolen from.
It's not a matter of getting worked up about the population not "continuing to expand". I intend to contribute nothing to it. I have no kids and have no plans or desire to have any. That's not the point.
I was responding to the use of the word "depopulation" which is something that has taken it's cue from this phony Gaia Worship nonsense that has been pushed by megalomaniacal globalists like Maurice Strong. When stripped naked, it is nothing more than a few men who want the power to decide who can live and die. It's a god complex.
Who gives a fuck. The ship has hit the iceberg. There may be a few hours left. In this crash, no one survives. So bitch and whine about the arrangement of the deck chairs, or STFD, STFU, grab a bottle of champagne, and listen to the band play "The End."
You can't change shit. You can't "prepare" for shit. Enjoy the last of the party. Live it up. Get all the credit cards you can. Liquidate. Get a passport. Go to Amsterdam. Fuck. Party. Music, sex, laughter, etc. The rest is all futile whining.
STFD, STFU, and BTFD.
Apparently I'm the resident dumbass.
What is "STFD"?
The other two I get.
Sit
The
Fuck
Down,
Shut
The
Fuck
Up,
Buy
The
Fuckin'
Dip!
My guess, Stand The Fuck Down. You know, what our military did on 9/11.
The problem with your "Amsterdam, fuck, party, music, sex" plan, which is akin to selling your possessions and waiting on top of a hill for the Rapture, is what if the World doesn't completely fall apart? What if it just slowly decays? Then, you're some dumb ass homeless guy who threw his prospects away because he was wrong on the timing of the end of the world.
ClockworkOrange: "Go to Amsterdam. Fuck. Party. Music, sex, laughter"
Are you nuts? WAAAY too much trouble. Anyhow, Amsterdam is a filthy dump. Got stuck at Schiphol on a return flight from Bucharest. Never again. "Go to Amsterdam"....what a bonehead. It's all I can do to summon up the energy to go down to Baja Cal, catch corvina, eat fish tacos....hmmm. Come to think of it, it's about time to slip down through Tecate again and take the Ruta del Vino....
If that is what you truly believe, then why are you wasting your time posting here instead of being in Amsterdam fucking, partying and listening to music?
As Pants McPants would respond:
"You first. Go ahead, lead by example.
Idiot."
The Earth can obviously carry increasing numbers of humans just as it can obviously carry increasing numbers of fiat.