How to fix America.

You lost some credibility with that statement. No one was threatened specifically. With a gov't shutdown, all are threatened equally. Well close.

 

Make the wealthy 10% and most importantly the 1% pay 2 Trillion of the 3 Trillion dollar annual Federal budget. That will be 20% of their share of GDP (their share=10Trillion)

That gives the Middleclass, or the next 30% of population a 50% tax break, as they will then have to pay 1 Trillion of the budget ,rather than the 2 Trillion they are paying now.

Place a National Sales tax of 10% on all non American made on American mainland goods.

Place a 10% Luxury tax on high end expensive toys that the Mega Wealthy buy, but give them a 10% tax break if that toy is made on American mainland, with American citizen labor, adequately compensated, and using American parts, and technology., by an American Corporation dedicated to social justice

 

All of the bold statements basically say, "Let's take these issues back to the drawing board" which was my point. The proposal, as presented, was not sound or logical.

A couple of points on the statements not in bold.

Yes, individuals do not have to pay income taxes on employer provided health insurance but it cannot be argued that it is a part of the compensation package for the employee. It has been argued that this should be taxable income to the individual but there are some fundamental problems with this. Normally these insurance plans provide the highest quality health insurance which might not be the choice of the individual if they have to pay more for them. In most cases they're already paying part of the premium and by taxing the rest it increases the cost of health insurance/care for the individual.

The statement is made "I want less spending on health care" but as noted above eliminating the tax deduction to a corporation for providing health insurance or taxing a person that as compensation increases the cost of health care as opposed to reducing it. The same is true for a person that privately purchases health insurance. If they're in a 10% income tax bracket and pay $4500/yr for private health insurance their actual cost is $5000 as that is how much they must earn to purchase the insurance. Making the insurance premium tax deductable reduces the cost of insurance by 11% for someone in a 10% income tax bracket. The same is true for someone paying out of pocket. The cost is not just the cost of the health care but also the costs imposed by government through taxation. Once again, if someone spends $4500 on health care and is in a 10% income tax bracket their actual cost is $5000 because that's how much they must earn to pay for the health care the receive.

Exempting expendatures for health care and health insurance reduces the cost to the individual which lowers the financial burder of health care. That is the point.

There are reasonable legislative actions that can be passed at the federal level to address pre-existing conditions and the interstate sale of health insurance. It simply makes no sense that only five companies, as I recall, can sell health insurance in all 50 states when there are about 1400 health insurance companies nationwide. When only 0.3% of all health insurance companies can sell health insurance in all of the states there really isn't market pressure to reduce costs. If we want to reduce the cost of health care then reducing the cost of insurance through competition accomplishes that.

BTW I do support tort reform but one thing I'd include is a limitation on the amount of money the attorney's can collect and that should be supplemental to the compensatory award to the individual. Punative damages should also be a consideration but once again they should be reasonable and limited.

 

What is wrong with welfare. Sounds like you want to turn SS into it.

 

Ah, the ole "scare the old folks" shtick. Page 1, paragraph 1 from the Democrat Pandering Handbook.

 

Perhaps I didn't clarify this properly. After tax income that has been taxed which is invested is not taxed again when it is withdrawn from the investment. If, for example, a person invests $1 million in after tax dollars they can withdraw that $1 million without claiming it on their income tax forms. It's already been taxed and is not taxed again. The income from that investment might be taxable depending upon the type of investment but the previously taxed dollars invested are not.

There is an anacdotal story that I don't know if it's true or not but it what is presents is true. As I understand it one of Henry Ford's heirs invested $100 million in tax exempt bonds that paid 5%. They received $5 million in income annually and didn't even have to file a tax return as all of the income was exempt from income taxes.

The Medicare portion of FICA/Payroll taxes has no ceiling and once, based upon this, I calculated how much removing the ceiling on the Social Security portion would increase revenue. It's not nearly as much as most believe as FICA/Payroll taxes are only related to earned income. Most high incomes are related to capital gains and not earned income. The projected shortfall of revenues for Social Security in the future is 1/3 of revenues (i.e. this is equal to revenues only being equal 75% of future expendatures). Removing the Social Security cap would barely impact this projected shortfall.

Next is that advocates of Social Security need to make up their minds. Is Social Security an "insurance" program or is it a "welfare" program.

If Social Security is an insurance program then a contract is established between the government and the individual and raising the retirement age would violate the contract that was established the very first day that the individual paid into the program. A change in the "retirement" age could be implimented but it would only address those that have not paid into the current program so it wouldn't take effect for about 45 years. On a personal note I have my original Social Security card and on the back it specifically states that I can file for early retirement at age 62 and full retirement at 65. Is that a contract?

Then again, if Social Security is purely a welfare program then no contract exists and Congress can change it anyway they want wothout violating contract law. If this is the case then advocates of Social Security need to start calling it a welfare program and anyone that's receiving Social Security benefits is a welfare recepient. I have no problem with that but then we can modify or even terminate Social Security whenever we choose as it would be nothing but a pure welfare program that everyone acknowledges as being a welfare program.

My point being that Social Security is either insurance where a contract exists and the conditions of the contract must be enforced or it's a welfare program that is subject to the whims of Congress and contract law does not apply. Let's call it what it is so we all know the difference between the two. It cannot be both.

 

You can say that about anything. Employee transportation, housing, food... What you want is a special tax break for health insurance.

Like?

Attorney's fees are limited. There's no hard limit but go much more above 1/3 and the court will reduce it and the lawyer can face disciplinary action. You can argue that the cap should be higher than $30K/year but attorneys fee should come out of the final award. It provides a better incentive to align the client's interests with the lawyer's. Punitive damages should be calculated by estimating the actual damage caused minus damages that have already been paid out. Currently, it's purely arbitrary. The only rule is that it not be facial ridiculous.

 

While I feel much the same way, the problem is they won't act like adults if they do blow it. Take a look at how the OWS occupiers are acting now -- in theory many of them are adults too.

 

Of course. But just don't assume that you can invest $1 million, have it grow to, say, $1.1 million, and then withdraw the original million tax free and keep the $0.1 million in earnings invested. The withdrawal rule changed from FIFO to LIFO about 25 years ago.

Sure. You can do that today with double-tax-exempt municipal bonds.

You seem to be unaware that the retirement age has already been changed without any complications due to "contractual agreements". And you seem to have an abundance of theories and concepts. IOW, you are reinventing the wheel. SS is a beast of its own, but it is more like insurance than welfare or any other program. Let's just stick to the realities and the laws re: SS. It is not a contract and it is changeable by legislation.

Right. it's a beast of its own, created by legislation, with its own characteristics. It is not insurance and it is not welfare.

 

How are they acting? Please don't single-out one or two whacko homeless who have squatted on the OWS sites. Tell me about the trend, -the majority. How are they acting?

 

In many cases employee transportation, housing and food are deductable to the employer. For example I maybe going on a work assignment to Virginia in the near future and the company is going to pay for my transportation, housing and food while I'm on that assignment.

My argument is actually that private expendatures for health care and insurance should be deductable because that lowers the total cost of health care in America and I've provided the numbers to support that argument.

I can provide a couple of examples. If a person has health insurance and drops that insurance but later is denied insurance based upon a "pre-existing condition" that originated under the original insurance policy a law could require the prior insurance company to provide coverage so long as all missed premiums are paid.

Congress could legislate a mandate for insurance companies to provide insurance for pre-existing conditions if they are offering health insurance but allow for the policy and premiums to reflect the cost associated with that insurance. Let us use the example of someone with cancer. Many cancers can be cured today so the policy might mandate a ten year mandatory participation by the individual because the cure could be very expensive but could also be accomplished within a short period of time. This would allow for lower premiums because the person would pay the cost of treatment over a ten year timeframe.

In any case Congress never addressed this per se except by the "individual mandate" in "Obamacare" and even with that the taxpayers are going to have to carry the major costs.

Let me provide an example of the problem. Years ago my second wife was disabled on the job and was insured by the Dept of Labor and Industries. She had an incompetent claims manager that wrongfully terminated her benefits. An attorney was retained to represent her and would only do so based upon a contengency fee. Of course she won because it was a wrongful termination of benefits but under the law L&I was only required to pay her the benefits she was wrongfully denied. Basically her benefits were reduced by 1/3 because of the wrongful actions of L&I because that money went to the attorney. It didn't cost L&I a single additional dollar to wrongfully terminate benefits, the attorney made money because of the wrongful termination of benefits, and the claimant lost 1/3rd of their benefits because her benefits were wrongfully terminated. L&I should have been liable for the attorney fees because it was their wrongful action that resulted in the termination of benefits. The claimant shouldn't have suffered the financial loss because of the wrongful actions of L&I.

The identical situation exists related to a malpractice lawsuit. If the doctor committed malpractice then the victim should not suffer financial loss for the actions of the doctor. The cost of collection should be a responsibility of the doctor. This additional cost to the doctor could be avoided completely if the doctor simply accepted responsibility and settled with the victim. It is only the refusal of the doctor to accept responsibility for their actions that drives a requirement for the victim to employ an attorney.

On the opposite side is the argument for "loser pays" and I would make the attorney filing the lawsuit liable if their case fails. The attorney should know if the legal grounds exist for the lawsuit, not the possible victim.

 

Of course I'm very much aware of the fact that Congress has been changing the provisions of Social Security as well as being aware of the fact that no contract exists. For purely political reasons politicans and advocates don't want to admit that Social Security is a welfare program, not an insurance program, because it would be politically disasterous for them to tell about 50 million Americans that collect Social Security that they're on welfare. They are on welfare but no one wants to admit the truth.

Of course I've also found that Congress has no reservations about violating Contract Law either. They don't even mind violating the US Constitution so why would they care if they violate Contract Law? They should care but in reality being re-elected is more important to them.

 

It lowers the cost of health care. Not necessarily the total cost. It encourages overconsumption. BTW, it is the recommendation of EVERY economist that employer-provided health insurance be taxed.

So another mandate. Sure, if we mandate that insurers to obey the same rules in every state, there's no problem with selling insurance across state lines. But otherwise, insurance cannot be sold across state lines without some unacceptably bad consequences.

They too paid lawyer's fees.

You want victims to settle without a lawyer? That's terrible advice.

There's a trade-off. Loser pays discourages legitimate lawsuits. If I'm a poor person with a 70% of winning a case do I want to risk losing and having to pay the defendant's lawyer's fees?

 

The facts refute that view. SS is not targeted at the poor or at any group whatsoever. If you earned income on which you paid payroll taxes in your life, you qualify for SS even if your final income was $1 million/yr. There is no income test for SS. If you paid in, you get something out. The monthly benefit varies little whether your final income was $30,000 or $300,000. And if you had no earned income in your life and had no spouse with earned income on which the payroll tax was paid, you don't get SS benefits even if you are destitute. So the notion that SS is welfare is ludicrous and not founded in reality.

Can you provide any examples? Some would love to reduce or end many pension benefits, but it is always stopped by the fact that pension benefits are contractual.

 

Question: What's the difference between the SS trust fund being filled with T-Bills and the SS trust fund being filled with savings bonds?

 

Well, T-bills are bought at a discount from face value. You would pay $952.38 for a $1000 T-bill with a coupon of 5% that matures in one year. I don't know about the Treasuries in the Trust Fund other than that they are specially designed and only authorized for the Trust Fund. They are probably not bought at a discount but I don't know.

Savings bonds are bought at face value rather than at a discount. Upon maturity they are worth more than the face value, unlike T-bills.

Why do you ask? Where are we going with this?

 

I'm asking because it seems to me that we're already doing this (more or less). It hasn't actually bought us any breathing room, and there have been no reforms made in all these years.

 

It seems like WHAT is what we are already doing? Substituting savings bonds for T-bills in the Trust Fund?

 

No... maintaining the trust fund with IOUs rather than hard assets. That's why I was asking what the difference is. All I got is that one is bought under value and matures to value, while the other is bought at value and matures to above value. Perhaps there's something you've left out, 'cuz that seems to be 6 of one, a half-dozen of the other as far as I can tell.

 

HOW would you propose we "maintain the Trust Fund" with "hard assets"?

Do you mean park dollar bills in a safe?

Do you mean buy gold and precious metals?

Do you mean invest it in real estate?

Liquor?

Guns?

What?

 

I think you're changing the topic here. No need to get defensive. All I'm asking is what's so different about savings bonds that make them preferable to what we're doing now.
I'm just trying to get a handle on where you're coming from *before* I start disagreeing.

 

I'm not getting defensive. I'm truly trying to figure out what you are proposing. I still don't really know how you see any of this, yet you are asking for opinions. You proposed "hard assets" but haven't indicated exactly what you would consider to be suitable "hard assets".

You mention savings bonds for the TF. It sounds like you believe the TF is shifting to savings bonds. They aren't allowed. Law says that the revenue coming into the TF shall be invested in special-issue Treasury securities. They are. They are not "IOUs" any more than the T-bills in pensions and many private portfolios are "IOUs".

 

That would be because I haven't proposed anything yet.
All I'm asking is why savings bonds are preferable to T-bills. Seems to me that it's a perfectly reasonable question given the topic.

 

Oh, well then let's handle this right now with no further delay: Nobody I know of is proposing changing the laws to fund the TF with savings bonds instead of Treasuries, and I don't know of anyone who is involved at any level in studying and/or changing SS who is proposing such a change in the laws.
So, unfortunately (to you) it seems this is a moot point.

Am I missing something?

 

Perhaps. Or maybe it's me. The way I read the OP, it seems to indicate a wish to fund SS with savings bonds. Let me review it...