The Bad Max Tax
Update: Here’s Bad Max’s "framework."
Bad Max Baucus’ health care plan is, best as I can tell, an attempt to turn the middle class into serfs to the health care industry.
Consider the "limits" he places on health care costs for those who make between 300% and 400% of the poverty limit (between $66,150 and $88,200 for a family of four):
Another section of Mr. Baucus’s proposal would help pay insurance premiums, co-payments and deductibles for people with incomes less than 300 percent of the poverty level ($66,150 for a family of four). It would also provide some protection for people with incomes from 300 percent to 400 percent of the poverty level (up to $88,200 for a family of four), so they would generally not have to pay more than 13 percent of their income in premiums.
So Bad Max says that he will prevent these people from having to pay more than 13% of their income in health care premiums. For the family of four making $67,000, that’s $8,710. For the family of four making $88,200, that’s $11,466. For the family of four making $90,000, apparently, there are no such limits, so they may be paying much more. For what may well be utter and total junk.
Now, frankly, there are a lot of middle class families already paying more than that. Heck, mr. ew and I are paying more than $8,700, and that’s just for two of us, and that’s before Blue Cross starts whacking us for my pre-existing condition next year.
But that’s just the premiums.
Then, Bad Max has a limit for total out-of-pocket expenses (and this appears to include everything). For that family of four–regardless of whether they make $67,000 or $88,200, that limit would be $11,900.
Mr. Baucus would impose limits on out-of-pocket medical costs — the co-payments, deductibles and similar charges for covered items and services. The limits would be $11,900 a year for a family and $5,950 for an individual. The comparable numbers in the House bill are $10,000 and $5,000.
Now, of course families would only have to pay that limit if they used enough services to reach that limit–though in Bad Max’s plan, health insurance companies are asked to cover far less of actual expenses, so in Bad Max’s plan, families are going to reach that limit relatively quickly. If Bad Max asks families to pay 35% of their costs, then that represents just $34,000 in costs, or less. [Update] Bad Max says insurance companies have to provide 73% of costs if they want to be subsidized.
And the only way to keep those costs down under Bad Max’s bill is the co-op. So what’s to stop the hospitals for charging $10,000 for you to walk through the door? Or for Pfizer to charge you $5,000 a year for your required medicine? What’s to stop the insurance companies from charging everyone that 13% rate on premiums, as a matter of course? Under Bad Max’s plan, because it requires everyone to have insurance, corporations actually have more of a guarantee (and therefore an incentive) to charge such exorbitant fees.
So assume those two families pay the limit under Max’s plan–which they would do long before they got into catastrophic health issues.
That family of four making $67,000 would pay $20,610, or 31% of their income.
That family of four making $88,200 would pay $26,366, or 26% of their income.
Of course, both these families would be in the 25% federal tax bracket. Bad Max is asking middle class families to pay more for health care than they pay in federal taxes.
And let’s look whether it’ll solve the debt crisis so many in the middle class are experiencing.
Here’s a very rough budget for that family making $67,000 (I’m not an accountant, so tell me where my assumptions are wrong).
Federal Taxes (estimate from this page): $8,710 (13% of income)
State Taxes (using MI rates on $30,000 of income): $1,305 (2% of income)
Food (using "low-cost USDA plan" for family of four): $9,060 (13.5% of income)
Home (assume a straight 30% of income): $20,100 (30% of income)
Bad Max Tax: $20,610 (31% of income)
Total: $59,785 (89% of income)
Remainder for all other expenses (including education, clothing, existing debt, transportation, etc.): $7,215 (or 11% of income)
Aside from the atrocity that Bad Max thinks middle class families should pay more to his donors than they pay for housing or for their Federal taxes, assuming these middle class families come close to hitting the max in a given year (something Bad Max doesn’t do much to prevent), it would leave them just $7,215 for all the rest of their expenses. That’s simply unsustainable and would all but preclude things like college. Thus, Bad Max’s health care "reform" would basically institutionalize a condition in which the middle class continues to fall further and further behind, paying far too much for health care and/or avoiding necessary treatment. It would keep the middle class drowning under debt. It would continue to force the middle class to choose between health care and things like college or fixing the roof on their house.
It would all but ensure that we never recover from Bush’s depression. Unless, of course, we were one of Bad Max’s donors.
And that is what the Democratic Party is now entertaining as an acceptable solution.
Update: Changed figure for food cost per USDA plans, h/t Peterr.
Update: Changed tax rates per this page, lowered state rates.
Serfs to health care! That should be the rallying cry! The lack of compassion by some Americans is simply heart-breaking! It’s a return to feudalism. Someone should sketch that out. (Please be my guest.)
Why not? The great bankruptcy reform act of 2005 basically made it impossible for a family and for many single individuals to have their debts fully discharged under chapter 7 thanks to the means testing provisions of the law. In NY you have to earn less than $67,000 to qualify for chapter 7. If you don’t qualify you have to file under chapter 13 which makes it incumbent on you to find a way to pay back your creditors. How many people have to continue tp work when they might have retired (if that is their retirement funds weren’t stolen from them)? The middle and working class person is a debt slave to the banks and credit card companies, why not to insurance companies too?
Another great Democratic party “gift” to the middle class. Even though they were in the minority they didn’t even try to filibuster the bill.
And I didn’t see Obama rushing to provide any relief to middle class people in any of his programs.
I’m not voting Democrat again for a long, long time.
Yup, and let’s not forget our current VP was the engine behind that legislation.
Is this his sole-authorship plan, his Gang or Six Plan, or did the whole Senate Finance Committee actually pass this crap?
If the Senate Finance Committee hasn’t passed, it is likely that Democrats on the committee will kill it unless the Republicans up an vote for it.
UGH. When is the CBO estimate for HR 676 coming out? Please tell me there will be one long before the debate in the vote comes up in the House. What will folk say when they find out it will save 400 billion a YEAR? Shouldn’t HR 676 be the one that’s voted on in Reconciliation?
I wish there was a genuine National Debate about where to go with Healthcare in the future…
It’s a brilliant solution to use the guise of health care to enact a wealth transfer.
I’ve said this over and over again, but health care is a major impediment to starting a small sole proprietor business. Without the coverage offered by Vermont’s Catamount health plan (for my wife and I) and Vermont’s Dr. Dynasaur (for my three kids), I would be looking at an annual premium of over $10,000 to cover my family. And that’s just an HSA, with a annual deductible of $4500 before full coverage kicks in. Without the state coverage, I wouldn’t have started my own business in 2007, hired two employees this year, and be in the position to hire more employees next spring. It just wouldn’t have been economically feasible.
It’s simply amazing that the quality of discourse on health remains in the gutter among the rotting filth of lies and paranoia. I don’t blame the Republicans nor did I expect anything different from them, as their actions are a reflection of who they are. Blame for this lies squarely on President Obama and his selection of Rahm Emanual as his chief of staff. They never should have granted equal standing to those unfit to be called equals. When your opponent lives in the gutter by choice, kick him whenever he moves to pull you down with him.
It’s good to hear about a real small-business case. I haven’t known of any examples, but it has seemed impossible that they did not exist. I cannot see any way a person could start a business and hire a few people to work with, not with minimal capitalization and a few lean years in the beginning. Employee “benefits” costs would just kill the whole shebang.
We have reached the point where the only “good” that is considered is the benefit to investors (got stock in an insurance company?); that is the be-all and end-all of our value system, and this is the result.
Baucus’ plan mandates crappy business conditions just at a time when many people need barriers removed, not added. When folks get laid off, it’s often an impetus to start their own business, as in this environment a new job is difficult to find. So Baucus’ plan is extremely unfriendly to small businesses, which will feed into the Republican tripe that Democrats are the enemy of the American dream of entrepreneurship.
Agreed small businesses create the jobs and churn the economy.
However, every Schedule C that I’ve seen over the years, have greatly
overinflated their expenses to lower their tax rates.
In some cases, it is breath-taking… so small buisinesses take care of
themselves in many ways…
Every time I see the “Bad Max” phrase, my brain wants to process it as “Mad Max”. Now that it appears that Max is out to make us all serfs, maybe he is actually seeing a Mad Max world in our future.
Shit – if the majority of Dems go along with this then they truly are stupid and deserve what happens to them at the polls. I am not a political operative or ad guru but if I was and had a candidate that was interested in a primary challenge to a ‘congress critter’ that supported this … I could write wonderful ads and almost ensure a victory for the challenger.
This is political suicide and any moderately intelligent politician should be able to see it.
well, they believe that habitual (D) voters ‘have no choice’ but to vote (D) in even numbered years.
Liberal groups in the veal pen are likely to be whipped into supporting Obama’s grand reform, or at least not opposing it.
Groups and websites outside of WH house messaging control may come around and agitate for defeat of whatever terrible bill emerges from the process, but are such groups able to take the next logical step and call for defeat of (D) legislators responsible?
not bloody likely, yet.
But regular folks can figure out who did this to them, and they’ll vaguely remember that it was right-wing, (R) teabaggers who strenuously opposed it, and so it is to that side they may gravitate.
O/T, back to torture
U.S. Tried to Soften Treaty on Detainees
Bush White House Sought to Shield Those Running Secret CIA Prisons
By R. Jeffrey Smith
Washington Post Staff Writer
Tuesday, September 8, 2009
“From 2003 to 2006, the Bush administration quietly tried to relax the draft language of a treaty meant to bar and punish “enforced disappearances” so that those overseeing the CIA’s secret prison system would not be criminally prosecuted under its provisions, according to former officials and hundreds of pages of documents recently declassified by the State Department.”
More.
I think my federal taxes amount is high, btw. I’m working to fix that number.
Does this help?
http://www.moneychimp.com/feat…..ackets.htm
No. That just finds marginal tax rates, which doesn’t account for how many deductions your average family of four will have (a lot–4 deductions plus a house, maybe). But it also doesn’t account for payroll taxes, which are regressive and big.
I actually think, now, that my estimate above is LOW (high for payroll by a lot, but low for combined, which is close to 31%). Just trying to figure that out.
Only the little people pay taxes.
Max shouldn’t take sole responsibility for turning the middle classes poor, I’ve wondered the same thing when it came to adding health care to all the other expenses a family must pay for “Life, Liberty, and the Pursuit of Happiness”, how are they going to do it? Congress and the WH aren’t that stupid to not know this and soon enough when reality kicks in small and large businesses will scream for single payer as they watch their companies go under. As Atrios is known to say – “Thanks oh Wise Men of Washington”. Depression Economics 202, thankfully we have deflation to look forward to and $4/gallon fuel, brilliant, simply brilliant. Krugman’s piece on his profession was sadly depressing.
O/T, from the “Oh, really?” dept.
Civilian casualties in Afghanistan ‘a real problem’: Gates
“US Defense Secretary Robert Gates acknowledged in an interview with Al Jazeera that civilian casualties have become “a real problem” for the NATO-led mission in Afghanistan.
“Gates’ remarks, in an interview to be aired Monday by the Qatar-based Arabic satellite news channel, came amid a raging controversy over an air strike that killed scores of people Friday in northern Afghanistan.
‘”I think it’s a real problem, and General McChrystal thinks it’s a real problem, too,” Gates said, referring to Stanley McChrystal, the commander of US and NATO forces in Afghanistan.
More.
Great. I’m glad they think it’s a problem. I feel much better now.
Now this is interesting, though one key point seems to be missing.
President’s Pollster Sends Congressional Dems a Memo
“Anne Kornblut today reports that in advance of President Obama’s health-care address Wednesday before a joint session of Congress, his lead pollster, Joel Benenson, sent a memo to Democrats on Capitol Hill saying that support for a health-care overhaul is higher than it appears and will increase once the specifics are made clear. The full memo follows:
“TO: Interested Parties FROM: Joel Benenson RE: Public Opinion and the State of Health Insurance Reform DATE: September 3, 2009
“•By large margins, the American people support major reforms to the health care system.
–82% of Americans say that the U.S. health care system needs either fundamental changes (55%) or needs “to be rebuilt” (27%). (CBS, Aug. 31)”
More.
Why are they reinventing the trigger? We’ve had it long enough now, and lost lives and livelihoods as a result.
Private Insurance Already Pulls Trigger on Patients, Docs
by Donna Smith
Published on Tuesday, September 8, 2009 by CommonDreams.org
“This story is not unlike millions that play out in a similar fashion all over this nation. For-profit, private insurance companies practice medicine without apology – and without license to do so. Patients seek care; doctors assess medical needs; private insurance companies make the final choice. My insurance company – Blue Cross — decided just yesterday that doctors at one of the finest medical facilities in this nation were wrong in what they prescribed for me.
“Yet if we listen to the plans unfolding on the national political scene, we are supposed to trust that the private, for-profit insurers – like Blue Cross – will clean up their acts over the next few years rather than “trigger” the availability of a public health plan option for all Americans. As far as I am concerned, their decades of escalating abuses against patients and healthcare providers are trigger enough – they do not deserve five more years to decide if they’ll do what it is right. We know they will not.”
More.
O/T. Spain is still at it.
Spanish judge resumes torture case against six senior Bush lawyers
• Submitted by davidswanson on Tue, 2009-09-08 13:43. Criminal Prosecution and Accountability
By Andy Worthington
“The Spanish newspaper Público reported exclusively on Saturday that Judge Baltasar Garzón is pressing ahead with a case against six senior Bush administration lawyers for implementing torture at Guantánamo.
“Back in March, Judge Garzón announced that he was planning to investigate the six prime architects of the Bush administration’s torture policies — former Attorney General Alberto Gonzales; John Yoo, a former lawyer in the Justice Department’s Office of Legal Counsel, who played a major role in the preparation of the OLC’s notorious “torture memos”; Douglas Feith, the former undersecretary of defense for policy; William J. Haynes II, the Defense Department’s former general counsel; Jay S. Bybee, Yoo’s superior in the OLC, who signed off on the August 2002 “torture memos”; and David Addington, former Vice President Dick Cheney’s Chief of Staff.”
More.
Say hello to Adam Schiff’s office when they drop by. They like the figures.
Just to clarify: Schiff’s office likes the fact that there are figures. I don’t know if they like the figures themselves.
Make sure they know I’ve corrected my side of figures. THey probably could come up with a better estimate for taxes. Of course, CA”s income tax rates are far higher than this. And since this is built off federal poverty rates, it means CA residents–who have higher expenses–will miss out no subsidies at a much higher rate, even though their costs are higher.
In other words, the calculation for one of Schiff’s constitutents would be much much worse. Particularly when you add in transportation costs, what with the commutes that a lot of them have.
Oh yeah there is no way that We would get any subsidies as we just gross over the 300% poverty limit and the expenses living here in California mean that we just scrape by now. If we are forced to pay more for health care we will go under thats for sure!
EW, would it be worth doing a timeline on the evolution of Good Max to Bad Max?
Say, as a case study of how money effects policy and then effects health, life and death
panelsin America?Okay, adjusted the tax rates. This lucky family now has $7,215 left to spend on their car, gas, clothes, education, day care, new roof, property tax, and so on.
Utilities would eat up most of that.
Yup, particularly in a place that required heat or air conditioning for much of the year. We get off cheap on the air con front (haven’t used it this year), but then have to heat seven months a year.
I know folks in your kind of income bracket who have received half of the funds to go solar all the way and then feed back the extra energy back to the grid. The cost to go go all the way solar was I believe around 20,ooo and they had to pay 10,ooo or 12,000.
She is a college professor PhD. he is a counselor with a PhD. Make around 100,ooo. They were able to get half of their system paid for with a grant…Ohio
Two of us pay $9,600- but then we have a combined $2,400 deductible- so the bottom line cost is $12,000. I moved my wife to this plan from Blue Shield because it was MORE expensive. Of course we have co-pays as well.
If america voted for a majority of Democrats with a PO in the dem. platform, elected Obama who had a public option in his plan, and when the majority of americans want a PO what does the shit coming out the Baucus committee have to do with democracy?
I do taxes on the side.
In my opinion, the most important number is the effective tax rate.
We are in the 25% bracket but our effective rate for 2008 was 15.81%.
It’s based on taxable income.
The rate is even lower if you have deferred income (IRA’s, etc).
That’s what I’m trying to get to. That’s what the linked page shows, I think (so 13%). And this family clearly doesn’t have money left over for niceties like an IRA.
And then I’m not sure what the effective state tax rate for state taxes ends up being.
The problem with the subsidies is that they are a direct transfer of funds from the taxpayer to the corporations, who add 30% on for profit. Voters need to get angry before change happens. One way to get them REALLY angry is to have a mandate WITHOUT government subsidies!
Is this mandate even Constitutional? It is not a tax, but a direct transfer of wealth from the pockets of citizens to the corporations. It is the same as the government forcing me to give a certain percentage of my income directly to my neighbor.
And what about that tax on people who don’t wish to purchase health insurance? Is it on gross income or net income? And are these sell-outs in Washington going to tax earned income only, and exempt investment income?
This does have subsidies, for those under 300% of the poverty rate. My 67,000 family is an example of those who just miss the subsidies. But it’s still not far off a median income for such a family.
What is the American Dream Worth? $7,215 to a family of 4, Atrios’ dream that we all move back to Urbania and ride the bus will soon come true, damn liberal utopia. Thank god the art museums are free here in Middle America. Moving forward by going back to the Pullman Years – “The first Labor Day in the United States was celebrated on September 5, 1882 in New York City.[1] In the aftermath of the deaths of a number of workers at the hands of the US military and US Marshals during the 1894 Pullman Strike, President Grover Cleveland put reconciliation with Labor as a top political priority. Fearing further conflict, legislation making Labor Day a national holiday was rushed through Congress unanimously and signed into law a mere six days after the end of the strike.[2] Cleveland was also concerned that aligning a US labor holiday with existing international May Day celebrations would stir up negative emotions linked to the Haymarket Affair.” http://en.wikipedia.org/wiki/Labor_Day
Stirring up negative emotions? Who’da thunk that would work.
OMFGYHGTBSM!!!!!
THIS has been our “good faith” DEMOCRATIC negotiator!
Holy holy mother of all shits. With Democrats like these, who needs Republicans.
WOWOWOWOW.
Merkins being worked to death,no healthcare,or paid vacations…………oy
If we examine anything that involves large payments made by an American, and I mean any, you will find that the end goal is to find a way to take them from us. They tax those that can’t afford it, and do not tax those that have paid to have the law written for them. They do not help with medical bills that allow them to take your home, so there is no way you can be covered for such a loss. They assist the industry that caused the collapse of our economy, and they continue to take people’s homes away from them and give them to the bank or the insurance company as payment for the dead family or dead home that it was once. They take our freedom away by calling their new law a “patriot act” and we do not note the irony. They take away our food and replace it with garbage they write laws to rename “food”. They poison our water with any chemical they feel the need to dump, and then buy the people that would squawk with huge bribes and relocate them and their families to somewhere “clean”. They allow a city to be wiped out and years later, nothing is done about that city.
I hope you get the picture I get, because I would hate to go around acting like a “truther” about the things that are visible to the naked eye.
They want it all folks. They will take it all as well. That is what they are doing now. They give nothing back, that is not the way of people greedy enough to become politicians. We have no reason to trust them whatsoever. Recall that they gave us all these rules, and they did so knowing the reasons were lies.
Gives you a warm fuzzy feeling about anything an elected official tells you doesn’t it? We know it is a lie from the start, and it will be a lie at the end.
Best consider your gullibility factor soon. You see there is this train that left St. Louis for California and one that left from San Francisco to Chicago, one was going this fast, and the other was going this fast. Which one was going to cover the distance faster? Don’t mind that noise you hear, or the reports on the radio, or the news about the loss of yet another piece of your waking dream about California falling into the sea. We want to talk about trains right now. Not fast, efficient vehicles to take people where they want to go safely and without pollution. No, we mean steam engines and how pretty they are! Let’s make a special day for Steam engines and make it a holiday! It’s like John Kerry talking about climate change while everyone in the country is focused on health care. We didn’t notice you took a million from the people trying to kill us John, so everything is okay?
when you wrap around the issue, you can see the issue is a joke that is being perp’d on those of us gullible enough to believe that they are trying to help us. Where is just one example?
And as far as I am concerned this past 2 years mortgage crisis has been the largest land grab in history since the Civil War. And who owns the land now? The banks and insurance companies got it at rock bottom prices.
Max Baucus is a total sham and a disgusting representative of the Democratic Party. It’s because of the Max’s out there that I’m an Indy.
With the Supreme Court ready to remove what paltry stops we have in the bribing of our officials by corporations, I believe we’re screwed.
Max Baucus: WHOLLY OWNED EMPLOYEE OF BIG HEALTHCARE CORPORATIONS!
Max Baucus is a pathetic “sellout” and needs to lose his seat over this.
Wow, the banks (and health care industry) will win again. The policy will keep citizens totally needing revolving credit as opposed to being able to make ends meet and build savings.
This is about creating debt dependency.
My son just finished reading the Grapes Of Wrath. He said, “Imagine if FDR thought of using triggers instead of the New Deal? We would have been an incredibly weak nation.”
Based on your figures EW there will be many unfortunate futures for many bright and capable children and families.
working in the service industry making pathetic wages,
Add about $2,000. a year for heat and electricity. There sure wouldn’t be any money left to buy solar panels, wind turbines, batteries, geothermal heat…
Max told Montana AARP members on the phone that they were “putting the kibosh” (pronounced keeeebosh in that patronizing hick kind of dialect put on by the wealthy ranch kid schooled at Stanford) on the insurance companies. But that the insurers had to then “make it up in volume” if they had to give up some things. http://www.yellowstonepublicra…..index.html
Obama said the same thing in Belgrade, Montana. The insurers had to get something for what they were giving up. Horsetrading as opposed to solving a problem.
So this is similar to Medicare Plan D that Max also helped shepherd through the Senate. We have elected people who are like plow horses with their blinders. They can only see what is right in front and below them; and that’s just a bunch of dirt.
The Health care industry will wipe out most college educations.
Yes, this pretty much puts the American dream out of reach for middle income America.
What a nightmare. My oldest daughter and her husband had to choose expensive healthcare insurance and cannot afford to start a family as they have long dreamed of doing. I want my country back!
EPU-ed from Jane’s thread:
The local talk radio blowhard at the end of the bar is getting an earful from irate callers about this story this morning. It is big news, fills most all the front page of the paper. But then, ND BCBS controls 90% of the healthcare insurance market in ND.
I am not sure if it is just the BCBS folks we are protecting. I really think this is about the banks and investment houses as well.
A really good number cruncher can take the figures being projected for the middle class and probably figure how many will go into bankruptcy. I wonder, for I am not a financial wiz, if some kind of CDS could be set up on projections of middle class financial ruin due to government insurance rates ,dictated by the insurance industry, which will guarantee the financial failure cascade? And is the industry holding hands with the financial industry on the projections of this cascade, looking to the future payoff?
should we have expected anything less from sen. baucus; even in purple leaning montana there are those who know we need health care reform and control over the skyrocketing costs to our country and its citizens. of course, the demographics of montana is changing from out-of-work ax men to all-but-the-elite wealthy who can purchase beautify land and build their second, third or fourth home.
baucus and his gang of six are bought and paid for by their corporate sponsors.
Our corporate masters will own us completely when the Supremes rule for big money to be injected directly into politics. You can kiss access to the tubes goodbye along with voices like FDL.
So this is the plan that the Senate and House have that Obama talked so much about during the campaign? The one that we commoners should have access to also?
A flow chart of Bad Max’s plan would be similar to a flow chart of the health-care system we have now. Both would show the health-insurance and pharmaceutical companies violently sodomizing American citizens against their will.
For months, Obama waited for this crappy bill.
Fired Up and Ready to Go in defeating the Baucus Bill.
Max’s bill is a farce! Just another way to continue the decades old trend of Transferring the wealth of the nation away from the common citizen and up to the Wealthy ones who don’t need it!!! Fuck this farcical Bill.
Nailed it in your lede, only ’serfs’ may be too humanistic for our dear gear-headed leaders. Thanks for clearly stating the role Bad Max and his donors have in mind for us.
The one image that most typifies our time is, to me, the scene from The Matrix when Neo wakes up, to find himself an organic being in a hyper-mechanized world.
If we zoomed in, would we see the labels on the tubes sucking the life out of him, with names like “Pfizer,” “BofA,” “Goldman Sachs,” “AIG,” “Haliburton/KBR” on them?
Did the economy crash because too many overlords were sucking too much cash too fast from us exhausted cows?
Intentions materialize reality. We can see the intentions of the Bushies that manifested in our black sites and secret laws, our wrecked economy and livelihoods.
And as an artifact, as a construct, it is the private property of the constructor. Our gear-headed leaders really do believe themselves to be the master builders of the cosmos.
Propagandists aren’t the only ones who influence the process of cosmogenesis. We, too, are using the power of myth, we just don’t recognize it well enough.
Where does our future come from? How does it take shape? Most importantly, how do we shape events? Two word answer: from within! We really must quit making believe we are machines, governed by Newton’s laws and controlled by “kinetic activity.”
Could we maybe get Morpheus’s red pills covered by the new and improved health care system?
Any plan in the long run will require cost controls. They can be indirect (such as those that may or may not stem from a “public option”) or they can be DIRECT as in the case of most of the civilized world where the govt. directly limits by law the amount that insurance companies can charge customers and the amount health care providers can provide insurance companies. The second solution is simple and well tested- but either might work.
any plan will probably end up with premiums for most, deductibles and co-pays. These features are in most health care plans around the world.
The real villain here is that the average family income has lagged relative to health care costs and damn near everything else.
The $66,000 and $88,000 figures are the problem.
“Federal Taxes (estimate from this page): $8,710 (13% of income)
State Taxes (using MI rates on $30,000 of income): $1,305 (2% of income)
Food (using “low-cost USDA plan” for family of four): $9,060 (13.5% of income)
Home (assume a straight 30% of income): $20,100 (30% of income)
Bad Max Tax: $20,610 (31% of income)
Total: $59,785 (89% of income)
Remainder for all other expenses (including education, clothing, existing debt, transportation, etc.): $7,215 (or 11% of income”
—————————————–
I thought there was a war fought over
“taxation without representation”?
Sadly, it seems in retrospect that (”no taxation without representation”) was actually a battle–and we have lost the war.
yep
The federal tax figure is too high. This family would pay 7.65% or $5049.
This would represent FICA on $66,000 of earned income. They would not be subject to the federal income tax.
So the Brookings numbers are wrong? Do you have a link for your estimate? Because until I get a better source than Brookings, I’ll trust Brookings.
Brookings shows about 6% on income and the rest of the 13% as payroll (though admittedly those numbers aren’t for this year, for a 67,000 income family).
Yes, Brookings is wrong.
You haven’t factored in the added Schedule A deductions from the “Bad Max Tax.”
My originaly estimate, which came out to be 15% of income, was income only with 10,000 of deductions.
Again, show me a link, bc thus far Brookings (backed up by BayStateLibrul, who does taxes) is more credible than an assertion without a link or a calculation.
I don’t have a link. It is based on my own scratching using 2008 tax code.
GI: 66,000
Less:14,000 [Personal Exemptions]
Less:33,660 [Estimated Itemized Deductions- Medical: 15,660; State Taxes, Personal Property Taxes, Real Estate Taxes: 3,500; Interest:14,000, Charitable:500]
Taxable Income: 18,340
Tax: 1,946
Credits: 1,946 [Assumes 2 kids under 17 or older and eligible for higher learning credits]
Federal Income Tax: O
To get to your federal tax figure of 8,710, which would include FICA of 7.65% or 5,049, would require Taxable Income of approximately 43,400.
Once again, I’ll CBO’s numbers over yours. CBO says I’ve underestimated by 2%.
You’re treating payroll tax as a progressive tax, which it is not.
Ok, but to use a 10,000 deduction, when your calculation contemplates a 20,610 medical expense is objectively wrong.
Also, I am not claiming the FICA tax is progressive. It is regressive as hell.
Moreover, I agree with your basic premise, given the wage/salary structure in this country, under the Baucus plan, health care would be too damn expensive for most people.
That’s what I initially used, in which I forgot to add payroll but underestimated deductions.
What I’ve currently used–13%, which CBO says is low by 2%–comes directly from CBO and factors in deductions.
I logged in just to talk about this (note to whoever deals with the comments section: don’t put people’s passwords on the screen after they sign up. If new users are in a public place, anyone will be able to see the password).
The IRS says that all premiums and medical expenses for your family are tax deductible after you spend more than 7.5% of your income. So for the family of four earning 67K a year, 15585 dollars of the Baucus Tax are deductible (7.5% of 67K is $5025, $20610-$5025=$15585). That means the family’s taxable income is at most $51415.
However, it is almost impossible that medical deductions would be the only deductions on their tax bill. In fact, from what I’ve found on the Internet, there’s probably an additional 11K of deductions. Unfortunately, this info is very outdated (although it is IRS data), and all I have done is convert the money to US 2008 dollars to take into account inflation. But, assuming this is roughly right, the family’s taxable income is 40K, which means their federal tax would be about 6200 dollars, significantly smaller than 8700.
To get an accurate number, what you need to do is find out from the IRS:
a: What the current average tax deduction is for medical expenses for a family of four (at that income level)
b: What the current total average tax deduction is for a family of four (at that income level)
Then find $51415 – b + a (which is the family’s taxable income), and compute the federal tax owed on that final amount.
My guess is that it is significantly lower than the CBO estimate, specifically because the Max Tax allows for a much higher medical deductible.
Correct, as a flat rate, social security and medicare deductions are regressive, costing lower income households a greater percentage of their income than higher income households. That effect is amplified by the cap, which limits income subject to the tax.
Why cannot the Dems make clearer that the GOP is no longer an inclusive party or even a conservative one, but one that wants a lien on all national resources in order to benefit only a few citizens? Is it because leading Dems want the same thing: they want to benefit many of those same few citizens at the expense of all the others? This health reform debate will be a clear indicator of whether that’s true.
I’m unconvinced about that lower state rate, but don’t forget that large urban areas and “cooperative” regional taxing authorities – where lots of people live – also charge what amounts to a 2 to 2 1/2% flat tax.
That leaves even less to pay for known unknowns, a few slips and unexpecteds, and routinely expected costs, from traffic fines to a birthday cake to professional or union dues to thirty cents more a gallon of gas to those woefully unprofitable petroleum companies.
Bad Max is a great analogy: he’s preparing us for existence in the Thunderdome.
Oh, absolutely. I used MI as my base rate–which has a flat tax based on AGI, and which is one of the cheaper state tax states. I think the same family would pay 6% in CA, and that’s before any local taxes.
Then again, my property tax would eat up almost all of the remainder, so it does even out in some ways.
Our property taxes are almost 10% of our gross income now here in California. We bought in 2001 during the last down turn of the last housing bubble and got a good deal then. But now with our buying power being eroded by increasing costs for health care things are just getting worse and worse for us.
I’m looking at my property tax bill right now and it is rather scary. I live in a 2 bedroom condo – a little over 1400 sq. ft. And in the same day I got all my bills for insurance – car, condo, umbrella, and earthquake. Makes me want to hide out somewhere.
For those interested in making comparisons, here is info on state tax rates.
Time for the full court press for the public option.
There. Fixed it fer ya. (I’ve always wanted to say that. ;-))
nice change
Cincinnati was a great spot to deliver this health care speech. Lots of union and manufacturing jobs lost in this area over the years
Lots of upper class white Republican folks going to church on Sunday tripping over folks who do not have access.
Go where Bush lied to the nation about WMD’s in Iraq. Oh yeah the Bush administration did that where ever they went
http://crooksandliars.com/
I read (NYT on Saturday?) that the number of homeless school children has doubled in the past year; we have over a million children in school with no home to go to at night.
No; IMHO, insurance companies are not the answer. They are not even PART of the answer.
Medicare and Social Security come off the top, regardless of deductions from income that lower the federal tax bracket, not all of which, incidentally, are applicable in some states. That is, they don’t all accept the AGI number from the 1040 because they allow fewer deductions. Then there are real estate taxes for those lucky enough to still “own” their homes, and personal property taxes in some states.
There are also the ever rising sales taxes (8-10%) on consumption and the dodge Michigan and other states impose called a “use tax”, which replicates and in some cases duplicates sales tax revenue on goods bought out of state.
Those states that brag about not imposing state income taxes, and some states that do, also charge whopping fees for car registration and other state licenses. Licenses for personal businesses, from hair styling to business consulting are doubling and tripling, thus making sure that those who are forced out of employment and into self-employment pay their “fair share” of what it costs to “regulate” them.
Anyone who travels to pursue that at-home business or even to see grandma before you pull the plug has also run into tax scams run on out of staters, from exorbitant tax and use fees charged on airport rental cars – aggregating 25-30% in some cities – to hotel taxes and others. All while local authorities still issue tax exemptions to large real estate developers – whether they build in what are already the most attractive locations for people to live, like Boulder or San Diego, or in Cleveland or Columbus, Ohio.
We are paying over $7,000 per year per person in health care costs- so the cost of health care for a family of four must be about $28,000. Currently, for most people, employers pay much/most of that. Clearly a family of four making 60K couldn’t come close to making such a payment. The Baucus plan would limit that- would the limit make it affordable? Maybe not.
The out of pocket limit is better than most other plans I have seen- and the lack of a lifetime limit is fairly generous compared to other plans. A $500 deductible strikes me as pretty typical for the current market, although I haven’t really researched it. It isn’t clear what kind of co-pays he imagines- but I suspect that he’s thinking something like the classic 80/20 breakdown.
He’s allowing a 65/35 breakdown. If this were 80/20, it’d be far better, bc people could at least access regular care without spending too much.
You know I’m so pessimistic and so frustrated right now. Jane and many other progressives have worked so hard to get the word out about the public option and about the need for Real reform. But you know what, they’re going to do whatever they want and whatever will suit their political needs. If they think that voting against a public option will get them corporate money at election time that’s what they’re going to do and no phone calls from us or anyone else is going to make a whit of difference. We are beating our heads against the wall Again and still expecting a different result. This is very very discouraging.
Well then we vote them out of office!
Unfortunately, they’re like roaches. There’s always more where they came from.
This EW post has me more depressed than any in a long time.
We are so fucked. (America, the middle class, progressives….everyone but the wealthy and the special interests. All fucked.)
My wife has Kaiser and hospital stays cost $200 per day! So any lengthy stay would be a disaster for us! And she already spends around 6K(10%of income) per year for coverage and the co-pays and insurance coverage keep climbing every year for generic drugs now $25 and for Plavix is not covered at all so she has to pay full cost of around $175 per month for it. They are just killing us and they keep raising the costs and co-pay every year. This FOR PROFIT Model for Health Care is just totally wrong headed.
Have you seen this
http://crooksandliars.com/
oops wrong link
Another Beckian mom speaks out against Obama’s eeevil brainwashing plan
http://crooksandliars.com/davi…..-out-again
The obvious point is that total out of pocket costs demanded by current plans and the leading reform bills are not sustainable. About three-quarters of Americans couldn’t pay them. What kind of government policy, what kind of policy makers, allow that to continue, let alone entrench it and call it reform?
The point of sharing costs and directing their payment via a governmental process is to lessen individual burdens by pooling, by sharing risk. Insurers, like bookies, make livings at it, but demand exorbitant fees for it. It’s what society does for its police, fire and military protection. Government can do it, too, for health care of a large percentage of Americans without that profit, thus lowering the overall cost to society while improving outcomes immeasurably, starting with making care available.
Efforts to stem costs and improve care should be seen as running parallel to this effort to make the care itself available.
Every other economically advanced country is able to do both. Why is that the country that claims to have the best health care in the world (it’s not) allocates it only to its wealthiest people and to politicians, whose complete care is paid for by taxpayers? Some progressive legislator should put a rider on each health care bill that limits Congresscritter health care services to the lowest level provided under the legislation. That’s the skin-in-the-game technique that Congresscritters demanded apply to students and those on welfare.
Amen.
Because we worship the market. We allow the profit motive to determine everything. That’s what makes us different from every other country.
jane, how do these guys think they can get away with this crap??? capuano represents cambridge, for cryin’ out loud, and farr monterey county!!! are there two more progressive/liberal counties in the entire country??? where are those constituents?? this needs to be heavily fertilized at the grass roots, and quick!!
oops; sure thought i was on jane’s latest blog. apologies….
tho it’s not entirely OT
A framework for the bipartisan six, eh. I think that it’s DOA. Just Max trying to get something, anything out of his committee. Maybe a little more due diligence before the Big Speech.
A framework is not a plan, a bill or anything else but more negotiating points.
Nonetheless, we must cut the boondoggle for billionaire insurance companies off at the knees. The way to do that is to make sure that the House Progressives hold out. Jane has an action item up for Farr and Capuano who made some squishy comments yesterday.
The following is a quote from one of Bob Cesca’s posts over at his blog.
“Here’s a trigger I can support. Let’s have a primary trigger. If (insert name of congressman, senator, president here) votes against a robust public option, his vote should trigger a major netroots movement to recruit a primary challenger to kick his ass in 2010/2012.
These trigger guys, including Rahm Emanuel, apparently don’t get it. If they want universal coverage, they have to include a strong public option. Mandates but no public insurance plan amounts to the government forcing all Americans to subsidize the private insurance cartel. This is unacceptable. And if they want a revolt within the Democratic Party, this is what will “trigger” it.”
I think this is one of the best ideas ever. We should all use this as our war cry and threaten the hell out of them whenever they’re getting off course.
That is exactly what needs to happen to every one of these assholes who would rather support the insurance companies than the people.
Remember that any “limits” put on an industry by the Government will always be used as a the going rate, unless there is some kind of competition to bring that price down.
My dad used to tell the story that credit card companies used to charge a nominal 1/4 to 1% per annum rate since they made money on the handling fees. One place in a tax preparation instruction someone used 1 1/2% per MONTH as an example in how to calculate a deduction. He said overnight that became the going rate.
Another point before I leave for work: Killing College for the masses has ALWAYS been desire of the ruling class. Their kids ONLY! Their kids don’t want to have to compete with someone who might be more capable.
On a related topic:
1,200 Nurses Make a House Call to Dianne Feinstein To Demand She Cosponsor Employee Free Choice Act
SAN FRANCISCO, Sept. 8 /PRNewswire/ — “1,200 registered nurses representing every state in the union will make a house call to Dianne Feinstein this Wednesday at 1:00 p.m. to demand she become a cosponsor of the Employee Free Choice Act. The nurse action will come as part of the California Nurses Association/National Nurses Organizing Committee national convention.”
More.
Yee haw
To help us vent a little.
Meet the knuckleheads of the U.S. Senate
Link (Salon).
Canada Health premiums:
http://www.health.gov.bc.ca/ms…..emium.html
Over $28000/yr income:
1 person $54/mo
2 persons $96/mo
over 2…108/mo
I question whether those deductions are representative. They require owning a home with a hefty mortgage, but one the taxpayer remains able to pay. Medical deductions are subject to a floor, which limits their deductability. Many states disallow itemized deductions allowed by the feds, which makes more income subject to state tax. Local taxes are often a straight percentage, 2-3%, off the top with no deductions. Etc.
“That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed.
But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”
-The Declaration Of Independence
Provided my current health insurer isn’t emboldened by our government’s strong show of impotence, I won’t be affected financially, but…
The act of even floating an idea this obscene is beyond my comprehension.
I’m 57, only moderately liberal, and not even close to being well off.
I don’t believe, contrary to the CW, that my willingness to take a little less, or give a little more is unique. But I would be forever resentful of putting so much as an extra nickle in an insurance company’s pocket.
All right. I guess no one wants to touch my question about scoring Single Payer (HR676).
Save 400 billion a year vs. spend a trillion in ten….
I think i’ll save the money, thank you.
Well, last spring, I paid the Feds $13,000, because I had capital gains (and that was using as much of the losses as I could). That’s on a taxable income of $67000, single, renting. (I also paid the state of CA $2600, on taxable income of $73000. That’s equal to a month’s take-home pay for me.)
I can tell that Max is totally clueless about the real world.