The Underlying Assumption of the Leftist Taxers
In a review of some of the tax consequences of Obamacare, Grafton Willey conveys this bit of policy that one suspects underlies many of the assumptions of those who advance policies in the mold of nationalized healthcare:
Imposing a 3.8 percent “unearned-income Medicare contributions” tax on higher-income taxpayers. The 3.8 percent unearned-income Medicare contributions tax is imposed on the lesser of net investment income or the excess of modified adjusted gross income (AGI) over the threshold amount ($200,000 for single individuals or heads of households; $250,000 for married couples filing a joint return and surviving spouses; and $125,000 for married couples filing separate returns).
Neither the $200,000 nor $250,000 amounts are indexed for inflation. Modified AGI is adjusted gross income increased by the amount excluded from income as foreign earned income less deductions attributable to such income.
Net investment income includes interest, dividends, royalties, rents, gain from disposing of property from a passive activity and income earned from a trade or business that is a passive activity. In determining net investment income, investment income is reduced by deductions properly allowed to that income.
Net investment income does not include distributions from qualified retirement plans, including pensions and certain retirement accounts. For example, income from individual retirement accounts (IRAs), 401(a) money purchase plans, 403(b) and 457(b) plans would be exempt.
Some of the hardest work that I’ve ever done was the back-room labor involved in selling fish from a truck, and there were times, while hauling crates in the snow or cleaning putrid wooden boxes in the beating sun, that I marveled that it should be so difficult to earn $7 per hour and wondered what one could possibly do to “earn” the salaries of the wealthy. (For clarity: I look back on those days very fondly and came around to appreciating them even while they were in process.)
I don’t offer that anecdote as a means of transforming economic ignorance into a populist cry. To the contrary: the notion of “earned income” is hopelessly subjective and, therefore, merely a dash of political rhetoric to justify confiscatory taxation. Consider the amount of money that President Obama has earned as an author. Personally, I love writing and undertake it as a compulsion and balm. But in the course of lugging a table saw up the narrow steps to the third floor of a Newport mansion, I might be inclined to challenge the assertion that Mr. Obama “earned” that money in the sense implied by the Medicare tax.
I suppose we could look at every working man and woman and decide for ourselves whether we think they are truly earning their income – but the world does not work that way.
However, in a very general sense, it is not harder for your hero Glen Beck to make 20 million per year than it is for you to make 50K. Sure, he has to sell his soul more than you might, but that is about it. The same is true for many on Wall Street, etc.
In fact, years ago I came to the conclusion that this works in the reverse way you might imagine. Those who work the hardest make the least and those who work much less often make the most!
Someone who manipulates stocks or clients will take home quite a bit more than a ditch digger.
Is it fair? Well, that’s one of the questions of our times. I heard an NPR interview yesterday with a author who just finished a book about why the European (German) economic way might be the best model for us – in their case, the top 10% “only” own 44% of the wealth, while here they own over 70%.
It’s probably worthwhile to listen to the guy or at least peruse his site:
http://www.europespromise.org/
The basic premise is that they invest vastly more in PEOPLE – from both fathers and mothers having time off with a new baby, to health care for all. Of course, many Americans don’t want to hear this – preferring to wag a giant foam finger with the words “We’re number one” on it.
Note that 401K distributions are apparently not exempt — Willey mentions IRA’s and 401(a) but not 401(k).
Bend over Baby Boomers, your already shaky retirement finances just got raided in order to provide “free” healthcare for illegals, anchor babies and other “underprivileged” groups.
But it’s OK, since public sector 403(b) and pension distributions are exempted.
All courtesy of President Obama of the Public Sector States of America, and the Democrat leadership in Congress.
Ragin, never let the facts get in the way of ragin’
The simple truth is that it is US BABY BOOMERS who are now sucking up many of the health care dollars and will continue to do so. As one article puts it:
“The typical medical welfare recipient is not a single mother living on food stamps. It is a retired person in a sun hat, wintering in Florida or Arizona. Society could easily take care of the legitimate medical needs of disadvantaged younger people. The big, overriding problem is the transfer of money from a shrinking percentage of younger workers to an increasing percentage of older retired people.”
Get it? Baby boomers are living longer and people in their last 20 years of life suck up the lions share of medical costs!
Based on that, Baby Boomers SHOULD pay more……or do you support having the young working people give vastly more so the 88 year old can have another heart operation?
Welcome to the future where we are going to have to actually pay for what we use…to some degree. I would think you’d support that.
Stuart,
I grant that Baby Boomers / seniors are a big part of the problem — but they were “covered” before ObamaCare by Medicare.
Which is why we need to transition away from all welfare: social welfare; Medicare; Social Security; Medicaid; union welfare (project labor agreements / prevailing wage); corporate welfare and agricultural welfare should all go back into the collectivist bottle from which they sprang.
With all the taxes, fees, etc. the underground economy and offshore banking is growing and growing and growing.
Can We The People come up with a million ways to scam Washington and Smith Hill?
YES WE CAN.
>but they were “covered” before ObamaCare by Medicare
No, they were not covered! Bush passed Medicare Part D -unfunded – which set the program back by tens of billions. As you well know, Medicare is not solvent in the long run due to the rising costs and longer lives.
You can’t have it both ways. Your first comments seems to say that we baby boomers are getting screwed. Your second comment then says we are getting a free lunch which must be stopped.
Which one is it?
“Which is why we need to transition away from all welfare: social welfare; Medicare; Social Security; Medicaid; union welfare (project labor agreements / prevailing wage); corporate welfare and agricultural welfare should all go back into the collectivist bottle from which they sprang.”
Second the motion!
So when are you moving Stuie?
I don’t have a large income,but it’s adequate.I really can’t think of what else I need that I don’t have.
I don’t have a boat,a plasma tv,a summer home,expensive clothing or jewelry,etc.
I don’t resent people who do have more than they can use.It’s their prerogative if they earned the money.
I do see the current Wall Street crowd as a bunch of self-centered pigs,but so are a lot of entertainers and athletes.
What would you do Stuie?Police income?That’s ridiculous.
I don’t oppose food stamps,or RiteCare type programs,particularly if children are involved.They didn’t put themselves in the situation.
But I draw the line at illegal aliens,”recovering”drug addicts and drunks,and other human flotsam.(I don’t necessarily think illegal aliens are flotsam,but they need to return home).
In the current state of the economy,extended unemploymeny benefits are a reality and can’t be cut.I come from a working class/lower middle class family and know how it works.
However the fact that someone lives in a mansion doesn’t irk me.
It would be nice if some of the present day super rich emulated Carnegie and some other robber barons and endowed their communities with parks,colleges and museums like he(Carnegie) did in Pittsburgh.I know Carnegie,Frick,and Pullman had a dark side,but they at least provided job security.
>It would be nice if some of the present day super rich emulated Carnegie
Where do you want me to move, Joey? I enjoy New England and am still paying (taxes) into the system. However, in 10 years or so I will be another one of those wefare (medicare) recipients.
Well, Buffet and Gates (and many more) are and have given away almost every cent they have – so rest assured that is happening.
One has to wonder if Monique and Ragin would want to do away with all those things if they actually looked at the good it was doing for their own families and friends. It sounds like a talking point to me!
The problem with the right is that they engage in black-white thinking. They would throw away the baby with the bath water and then wonder why the baby was not to be found.
Complex systems have problems…all of them…and they need to be adjusted. No one would deny that we have to adjust our income and expenses (as a country) to match the changing demographics. But only a fool could think we have to go back to the law of the jungle to “solve” the problems.
Stuie-I don’t care where you move,but your constant whining and worship of places like Denmark for having an “enlightened”lifestyle makes me think you’d be happier somewhere else.
You seem to have a low opinion of the US,but I think when countries like France and Sweden are being forced to resist the imposition of Sharia law,you won’t be so sanguine about their quality of life.
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