It’s not self-dealing to make your house a rental property and renting it to yourself at fair market rate, any more than it’s self-dealing to own a corporation and pay yourself wages out of it.
We should not conflate Social Security and Medicare. When we talk about how expensive and unsustainable Medicare and X are, it’s the Medicare that’s the problem, not the X.
Social Security can be made financially solvent with some tweaks. Raise the payroll tax a little, means test a little, make other small changes. This can be made to work.
Medicare on the other hand really is expensive and unsustainable. Medicare costs are skyrocketing because all health costs in the US are skyrocketing. We can’t solve this problem by raising the Medicare age or rationing health care to seniors, leaving vulnerable elders without the health care they need.
Instead, we have to tackle health care costs for everyone. It’s extremely difficult and right now nobody knows how to do it, but we have to do it.
I confused. It’s a giveaway to the wealthy. The wealthy donors are mad their taxes are going up. The middle class and poor pay more while the rich pay less. There are tax breaks for everyone. There are tax breaks for no one but the rich.
The graphs show all groups get varying tax breaks overall. So which is it?
I like to follow these things with accuracy, and not partisanship. It seems like some of this is an opportunity for exaggeration. Or is it?
From what I have seen, it appears that this is overall a tax break of varying amounts for all groups, however in certain situations, people will pay more. Don’t make a high income if you’re from a high tax state. Don’t have benefits that only go to students (House bill). Be part of certain industries. Make your income on investments over work. Don’t be a single parent with more than two kids (good luck on people changing that one, too late).
But I’m more prone to believe things if there is data and examples involved, and not exaggeration.
It seems simple enough to me. Charge people higher rates for Medicare, based upon income/assets. Though many won’t like it, that would keep it solvent. Done.
And because this is such a mess in progress, no one knows for sure what kind of impact the final bill will have on any such groups, but one thing for sure - it is not going to be pretty if the deficit is bumped up by $1T.
@busdriver11 it’s because they screwed up in so many different ways when they were writing things in with crayon at 2 AM.
@busdriver11, no matter what analysis you see, you discover that tax breaks for corporations are permanent and tax breaks for individuals go away after five years or so.
I already pay more in IRMA for my Medicare bill monthly because DH is still working and we are in the “high earner” bracket for Medicare pricing. The IRMA addition is higher as income increases. There is an IRMA for Parts A/B, and a separate one for RX.
This reminds me of a conversation I had this weekend with a friend about Medicare costs. He is about to turn 65 and go on Medicare. He has always had good employer insurance. Mr. Fang and I buy our own health insurance. “Medicare is expensive!” he exclaimed. “Talk to me about $20,000 a year,” I said quietly. “Oh, OK, Medicare is not expensive,” he agreed. And of course, Medicare IS expensive, but he’s not going to pay the cost. I don’t disagree that well-off seniors like my friend ought to be charged more for Medicare. But it’s not a solution to the exponential cost growth.
The problem is not how expensive Medicare is right now. That could be alleviated by charging people higher rates.
Medicare costs are increasing by, like, 5% per year above inflation. The problem is not the cost now, but the cost five years from now, ten years from now, twenty years from now. The cost trajectory is unsustainable. The federal government won’t be able to afford it, and seniors also will not be able to afford it. I’m in rare agreement with hebegebe about this. We have to do something about it.
Where hebegebe and I part ways is on what to do. We can’t just put more of the unaffordable cost on seniors. It’s unaffordable. We have to contain costs.
In my state, the number of people age 65 or older is projected to be almost 25% of the state’s total population by 2040. Right now, it’s 15%. And it’s likely that the trend will continue of people living longer and sicker.
The age for qualifying for Medicare may have to be raised in the coming years. 65 is no longer that old.
Hold on there!
I have never advocated putting more of the cost on seniors. Many will die because they can’t afford it. And while a true social darwinist might say “Tough! They should have saved for retirement”, the reality is that as a society we know that people suck at saving for the future. We have to protect people from themselves when it comes to life and death.
Instead, I believe that the true cost of medicare should be borne by workers during their earning years through higher payroll deductions. But I expect I am part of the minority on this.
So instead of high earners paying, low earners would pay. Nope, can’t agree with that. If we’re going to fund Medicare by taxes on working people, we should tax high earners more. Low earners can’t afford it. Raise the income tax for high earners, and leave low earners alone.
In any case, medical cost growth is unsustainable.
The problem is that a single-point breakdown doesn’t really explain things in any useful way. This is because they set the non-corporate side of it up so that income taxes for nearly everyone (except most or at least many grad students and those with sizable student loan debt) go down initially, but then many of those tax reductions, most especially those that are used by the lower-middle and lower classes, either phase out over time or abruptly subset. As a result, by the time you get to a point 10 years out taxes generally go up for middle- to lower-income filers, but they generally remain where they are now or go down for mid-upper- to (especially) upper-income filers.
As I explained above, the US has very low tax rates across the board. If you want European style social benefits, you need to move towards European tax rates. The math doesn’t work otherwise.
I’m good with that. But if you want European style social benefits at European costs, you also have to reduce medical costs a lot.
@rosered55 Per the book Wrapped in the Flag by Claire Conner, that area of Wisconsin had very active and committed members of the John Birch Society.
It is going to be impossible to know how much estimated taxes to pay. Does anyone know if the schedule for payments will change?
I’m not sure who should pay the costs, but what we have now works out this way. Medicare costs are covered 1/8 by the enrollees (and that includes those who pay four times what most people pay because of the surcharges on higher incomes for enrollees), 3/8 by payroll taxes and the taxes on investment income of higher earners, and the remaining half of the cost is paid for out of general revenues (which are overwhelmingly paid for by the upper 20% of earners).
Sometimes I think we should just make it free to enrollees so we can start labeling welfare properly and disabuse people who think that they’ve actually bought something. Maybe doing that and rating the deductibles and co-pays would introduce some cost control.
In any case, with the peak of the baby boom at age 58, its going to get worse.
Here’s an interesting remarkable honest piece on the tax bills from the New York Times. The senior editors must not have seen it.
https://www.nytimes.com/interactive/2017/11/28/upshot/what-the-tax-bill-would-look-like-for-25000-middle-class-families.html
Agree on that. The US medical system is a mess.
The people who wrote the tax bill don’t believe in expertise, in careful crafting of legislation, in spending time to get their complex proposal right.
Unfortunately for them and for the rest of us, tax professionals do believe in spending time to get their work right. There’s another enormous loophole introduced by the shoddy slipshod legislative procedure. If a company is manufacturing something right here in the US, they can get a big tax break by shipping it overseas, having some of the work done there, then shipping it right back here.
In the week since the bill was passed by the Senate, in just one week, careful tax professionals have discovered hundreds of billions of dollars of errors. They’ve discovered enormous loopholes. That’s just in one week. If passed, the tax bill would take effect on January 1, but tax professionals would have until April 15 of 2019 to discover all the other lucrative loopholes that would save more billions.
This bill is going to raise a lot less revenue that supporters claim, because high-priced tax professionals are going to mine it for the rich vein of golden loopholes buried inside.
You don’t release code until you test it extensively. That’s just as true for the tax code as for computer code.