If you put a floor at their current marginal tax rate of 35%, the government would obtain $37 billion more dollars. That might sound like a lot, but it amounts to just 2.5% of the 2009 $1.5 trillion deficit (which is the red line shown). If you increase the floor to the pre-Bush-tax-cut marginal rate of 39.6%, the additional revenue grows a bit — to $66 billion, or 4.5% of the year’s deficit.
Even if you get really aggressive, it doesn’t help much. Even a tax floor for these individuals at 75% would cover less than 20% of the year’s deficit. And, of course, even most populist among us probably worries that a tax rate that high could do more harm to the U.S. economy than good. All of these calculations also assume that these wealthy individuals wouldn’t find new and creative ways to ensure that their income was shielded from very high tax rates. (They would.)
(h/t Doug Ross)
See author page
It obviously won’t work. You need to re-do your analysis with the income level reduced! Just keep reducing the income level until your higher tax rate “works”, and then define whatever that income level is as “rich”!
More seriously, you can see that this is really the plan, and the millionaire tax is just a distraction, like a magician waving one hand at a pretty assistant while he performs sleight-of-hand with the other. If you look at the income distribution and the absolute dollars available, it’s very clear that the plan is to squeeze everything out of their favourite target, the upper-middle-class. This is why the $200k income level keeps coming up. Even Chuck Schumer seems to have figured this out and is getting nervous. They will hit this group with outright high rates in 2013, but they know that they can’t raise the rate any higher before these blue-state voters wake up to how they’re being sheared, because their effective marginal rate (including Medicare and the state income tax in places like NY and CA) will be over 50% all-in. Then the plan is to nickel-and-dime them in ways that they hope won’t be noticed. Clinton started the ball rolling with the itemized deduction phase-out rule, also scheduled to return in 2013. Obama wants to squeeze this even more with the 28% limit, but that well is running dry. Next up is investment income. Savers already can’t beat inflation straight-up, never mind paying 50% of their interest “income” (really, just inflation) in taxes, but Obama hits them again with the Medicare surtax in 2013, and now we need to double down on that with higher taxes on capital gains (if anyone still has any, that is!). I am just waiting for the FICA cap increase to come up again – crap I probably gave Greg an idea there didn’t I? Every effort will be made to loot this group – if they could, they would have a net 0% tax (yes, FICA and Medicare included) on everyone below the income cut-off and a flat 50% tax on everyone above the limit with no deductions. And, sure, a maximum income level of $1 million beyond which the tax was 100% – after all, “at some point you’ve made enough money”.
@Doug: Yep. As Democratic Rep. Jan Schankowsky said, “You don’t deserve to keep all” your money. She wouldn’t say what percentage you deserved to keep, either. I guess they’re going to use the old sliding scale till they’ve helped themselves to everything in your pocket.
I had my own little pilot project to control health care costs by trying to make the health care system behave according to the rules of market economics.
One month ago, I started training for next February’s Super Bowl Sunday Surf City Half-Marathon. Last February, I came in 3rd out of 157 in my age group (select “half-marathon” Divisions Men’s age group 60-64), and I was looking to improve my time and placing with more serious training. So, on consecutive Sundays I ran: 16.5 miles, 12.5 miles, 16.5 miles, and I was at mile 11 in another 16.5 mile run when I developed excruciating pain in my left distal medial tibial area. I couldn’t run any more and I called my wife from my mobile phone to come and rescue me.
I thought that I had either the world’s worst case of shin splints but more probably a stress fracture. The latter would require a 4 month layoff from running, which would have thrown me into a serious state of depression; so I decided that I needed an MRI to be sure. Plus, being an oncologist, I wondered whether I might have osteogenic sarcoma with the pain elicited at an early stage in the disease process by me running on it. I hate x-rays. I even opt for manual (“invasive”) pat downs at airports to avoid the low dose surface xray screening machines.
Anyway, I’ve got $8,000 deductible insurance, but I know that Blue Shield negotiates rates with all the providers, and I’m entitled to the negotiated rate. So I called Blue Shield and asked which provider in the area had the best negotiated rate. They wouldn’t tell me. I was annoyed but eventually gave up. They just weren’t going to tell me. So I called around and asked what would be the cash price (at the time of the procedure). Best I got was $690 plus whatever the radiologists would charge for reading it. This averages $250 or thereabouts in our area.
But I found a Google ad for one of those portable MRI in a trailer units which advertised a price of $259. I called the guy (a nice Iranian who’d been doing radiology studies out of trailers between the San Fernando Valley and the Mexican border since the late 1970s). He said he’d do it for $250. So I had it done on Saturday. He did a technically excellent study. I just downloaded all the image files from his computer to a USB drive I brought with me.
Then I sought someone to read the films. I thought about outsourcing to India, but I found a group in Mt. Laurel, NJ which would do it for $60. When they found out I was a doc, they even gave me professional courtesy (no charge), which is something which NEVER happens anymore, almost. Anyway, I just zipped up the files to 12 MB and emailed them to NJ. An hour later I got back the professional report. No fracture. No cancer. But cellulitis (a soft tissue infection) right in the subcutaneous tissue in my area of pain.
I looked at both of my legs. Sure enough, on very close inspection, the left foot and lower leg was just a very little bit red and inflamed appearing. In retrospect, I realized that my leg hurt in the center of where the problem was, but all around that, it was itchy. I should have figured this out. A few weeks before, I’d pulled out an ingrown big toenail with a pair of pliers (more do it yourself medicine), and I figure that this must have been the mode of entry.
Statistically, this was probably either staph or strep A. Since I spend a fair amount of time in gym locker rooms, I’m at risk for MRSA and strep A can turn flesh eating — worst case scenario. The best antibiotic to cover both is probably clindamycin; so I called in a prescription for myself ($20 at Walgreens).
So I got the whole thing diagnosed and treatment started in 2 days, for a total cost of $270. It would have been $330, had I been charged the $60 professional fee.
Anyway, this whole thing got me thinking. In the usual situation, I’d have had to make an appointment with my PCP. He’d have probably ordered an xray, which wouldn’t have shown anything. He might or might not have then referred me to an orthopedist, who probably would have ordered the MRI. I’d then get the study and go back to the orthopedist for follow up. The whole thing would have taken a lot of time and I’d have three doctor visits plus an x-ray plus an MRI plus the reading of the MRI. Might well have run to $2K and the infection could have gone deeper into my leg or up my leg.
MRI is a wonderful technology (provided you don’t have a pacemaker or suffer from claustrophobia). Non-invasive. No harmful radiation. Very beautiful pictures of all the relevant tissues. The big barrier is cost and gatekeeping doctors.
One problem with just allowing anyone to self-order an MRI is that there will inevitably be false positives which then require further work up and generate expense and/or complications. But I honestly think that it would have the capacity to save the health care system a lot of money to allow people to spend $310 of their own money to have an MRI performed and then read by a board certified radiologist. The findings would then direct the patient to seek care from the appropriate type of physician. I suppose another problem might be a false negative exam — falsely reassuring the patient that all was well, when something might be seriously unwell. But I still think that the ability to self order a reasonably affordable MRI would save the health care system money and lead to earlier diagnoses of treatable problems.
It’s the sort of thing which could perhaps be piloted under ObamaCare. Maybe I should send off an email to Barry?
– Larry Weisenthal/Huntington Beach CA
The president either understands this, which means he is lying every time he implies that taxing the rich is the key to balancing our budget; or he does not understand this–which is a very scary proposition.
<—-this soon to be wealthier rich white dood would kick Jan Schankowsky in her nuts.
Meanwhile, we keep flooding this country with another 50,000 immigrants annually at the expense of taxpayers.
The 2009 IRS stats show that 230,000 tax returns of those making $1 million and above contributed more than 20 percent of total federal income tax revenue.
Data from the nonpartisan Tax Policy Center show households pulling in more than $1 million pay about 29.1% of their income in federal taxes.
Other statistics show that an average household with an income between $50,000 and $75,000 pay about 15%.
In 2008 the top 1% of American taxpayers paid 38% of collections for personal federal income tax while they represented 20% of all income.
So, when Obama says he wants ”fairness,” he isn’t talking about an equalizing of the proportions, but rather a PUNISHMENT of success.
According to the US Debt Clock as of today, each CITIZEN owes the federal government $47,228.
And each TAXPAYER owes $131,491.
Because Obama wants over 50% of all citizens to not pay anything, he must, of necessity, force others to pay more. (These are his core constituents.)
Why not the rich?
Demonize them!
Only problem is, it won’t help.
See the chart on top of this page?
It cannot work.
@Larry
Your email to Barry will only have a chance to succeed if you can use it to demonstrate some way in which following your plan will increase his power. Once the single-payer system is fully in place, you will lose all options, including your creative ones. Being part of the system, and your medical knowledge, will give you the personal access to real healthcare solutions you’ll need. The rest of us will be ground up by the bureaucracy and eventually processed into our graves.
Perhaps a black market in medicine will survive and there will be some option left for those with disposable income. Chances are, those who look outside the system will find treatment by those rejected by the system and by quacks, not a great option.
I think you are confusing leftist politicians with honest, intelligent leaders working to better the lives of the people who vote for them. They’re really just cynical people who want personal power. Their plans for an engineered society never survive the bureaucracy they create to implement them.
Hi DaNang: The only socialized medicine in the US are the VA and Military and Public Health service hospitals. You want to see a true socialized system? Go to the UK. Government owns the hospitals. Doctors work for the government. And yet — surprise! There’s still a parallel private practice system. Same way in Sweden and Australia and most other democracies with so called “single payer” medicine.
So my proposed concept is entirely viable, whatever happens with ObamaCare.
– Larry Weisenthal/Huntington Beach, CA
@Larry, #3. I’m an Anesthesiologist. I’ve contended for years that the #1 problem with medicine is that there is no free-market competition…and in fact, we are the only price controlled industry that I am aware of. Of course, your advantage was that you are a doc and you could write your own prescription, but nonetheless, shopping for care based on price would change the market hugely.
Of course the other problem is malpractice, but that’s another discussion.
Jim
Almost as bad as the high tax rates themselves is having to listen to a daily dose of demagoguery about how I’m not paying my fair share. By any reasonable definition of fair this is complete bullsh!t. I’m paying about twice the percentage of my income as the average taxpayer, and a double-digit multiple of the average person by dollar amount. If we were in a restaurant splitting the bill in this manner, no reasonable person would argue I was shirking my share of the tab. I’m fed up with hearing this, and sick of being told I’m unpatriotic for saying enough is enough.
Hi Doug (#10). I look at things a little differently.
What allowed me to succeed is a well-educated workforce, a transportation, shipping, and communications infrastructure, hundreds of billions of dollars in government supported basic and applied research, intellectual property protection through the patent and court systems, health care for my workforce (supported in many ways by government research and infrastructure), the availability of Medicare and Social Security, lessening my obligation to employees and retirees and allowing me to invest my resources in my business, as opposed to the care of my aging parents, public safety institutions (police, fire, paramedics), and on and on and on. I also owe my success to the existence of customers for my services, with the customers owing much of their own economic success to the existence of the above government services. The higher up on the economic food chain, the greater the aggregate debt to government for the success obtained. The rich should pay a higher share of taxes to government, because they owe more to government. This was a principle first espoused by none other than Adam Smith.
The country had a debt crisis after World War II, but citizens accepted the fact that it was their patriotic duty to pay off the debt. If we really do have such a debt crisis today, we should all be willing to step up to the plate to pay our “fair” share.
My main complaint is that this should be a duty for all of us. I’d let all the Bush tax cuts sunset, and not just those on one segment of the population. I’m all for progressive taxation (for the above reasons), but I’m also for everyone having their fair share of skin in the game.
– Larry Weisenthal/Huntington Beach, CA
I’m not going to repeat all of Obama’s lies exposed in this essay.
But I will link to it.
http://www.nypost.com/p/news/opinion/editorials/presidential_prevarication_32ZrcC7SQqukPJPiKVthGM
Presidential prevarication
You’re a fool if you do!
@openid.aol.com/runnswim:
You still haven’t answered my question: how high does my burden have to be before I no longer have to hear that I’m not paying my fair share? And the related question, how high do you think it can be before I lose heart, throw in the towel, and stop producing the income you want to tax at those high rates?
Hi Jim (#9). My late sister (who recently died after an 8 year battle with ovarian cancer) was an anesthesiologist, also. I’m therefore somewhat familiar with the nature of your malpractice challenges. California has the model for malpractice reform, and it’s been in place since 1980. Cap on punitive damages, pain and suffering at $250K. No limits on actual damages (no one has ever suggested limits on compensation for actual damages). The result has been great for docs (lower malpractice premiums), but studies in both CA and Texas (which later enacted a similar law), show no impact with regard to moderating health care costs or use of “defensive” tests (no one wants to lose a malpractice suit; no one wants even to be sued. And actual damages (health care costs and lost income) can easily approach $1 million or more. Incentive enough to be as defensive as ever.
I disagree with regard to the number one problem with health care costs. The fatal flaw with the concept that private sector medicine follows the economic efficiency rules of the rest of the economy is that the sellers (doctors) make the purchase decisions on behalf of the buyers (patients). I’ve given two examples in depth previously on this blog.
To briefly review these, a study asked academic oncologists and private practice oncologists what their favored first line drug regimen would be for previously-untreated metastatic breast cancer (for patients not on a research study). 85% of the academics said they’d use capecitabine (Xeloda), an expensive oral drug. Doc writes Rx, patient takes to closest pharmacy which is likely to have the drug, which is usually the University Hospital pharmacy. Patient takes pills home with her and takes the pills at home. No burden on the chemotherapy infusion center, which the academics like to reserve for research study patients.
In the case of the private sector oncologists, 85% chose multi-agent infusion chemotherapy, because private sector oncologists make 60% of the income by being retail pharmacists, dispensing intravenous chemotherapy, as opposed to being doctors.
Another study, by the public health departments of Harvard and Michigan studied drug prescribing patterns for Medicare patients with breast, lung, colon, and ovarian cancers and showed a strong correlation between drug regimen selected and profit margin to the oncologist.
My uncle is a retired urologist. He and I have talked about this and he offers another example. A bread and butter operation for urologists used to be surgical removal of urinary tract stones. But now these may be obliterated non-invasively, through the use of a machine. The urologists lost a cash cow and they needed a replacement. Hence the massive jump on the PSA screening bandwagon, which has produced an epidemic of radical prostatectomies, of dubious value (and with tremendous morbidity) to patients.
With the economic slowdown, people lost insurance, and doctors lost patients. But doctors’ incomes didn’t go down, because they just started providing more services to remaining patients. There are a million ways to do this, as I’m sure you know.
Still, every little bit helps and I think that removing some barriers to self diagnosis and self-treatment could be beneficial, at least in some situations.
I’ve worn contact lenses for 50 years and I am major annoyed that I am required to see an optometrist yearly, if I want my prescription renewed. If I’m not having any problems, I should be allowed to take the “risk” of just refilling my prescription without a yearly exam, if I so choose.
Stuff like this won’t make a huge dent in health care costs, though. The biggest problem is that the incentive for doctors is to provide as many services and perform as many procedures as possible. Coupled with the fact that the doctors do make the purchase decisions on behalf of the patient and coupled with the rapidly increasing introduction of newer and more expensive diagnostics and therapeutics, it’s a perfect storm. One of the things I find most promising about ObamaCare is the $11 billion earmarked for pilot programs testing schemes to based reimbursement on outcomes, as opposed to procedures.
– Larry Weisenthal/Huntington Beach, CA
Hi Doug. Prior to 1981, the marginal tax rate was 70%. This is just the Federal rate. You’d think that people would just quit working? Well, they didn’t. I can’t answer the question for you, but no one is talking about returning to a 70% Federal marginal rate. Maybe increasing the rate from 35% to 39% would be a big deal for you. I still haven’t had the chance to look for your post on where/how you calculated that your taxes were going to be increased by 30% or whatever. I need to read this before I can comment further on this. As I write this, I don’t remember where to look for your answer. I saw it/skimmed it/but forgot where it was. I’ll try to find it and respond, when I’m able.
– Larry Weisenthal/Huntington Beach, CA
AP is publishing that the FDA is outlawing OTC asthma inhalers so as to ”save the planet.”
Apparently anyone with asthma can afford $50 0r $60 prescription inhalers as opposed to the $20 OTC ones.
( I have no idea how many of those an asthmatic goes through in a year, but it sounds expensive!)
Between 1 and 2 million Americans (doesn’t Obama claim inner city kids are most of these asthma sufferers?) will have to spend 200%-300% more per inhaler as a result.
I wonder if the ObamaCare tax on medical devices is added on the price of these things as well?
Hi Nan, I read the article, but it doesn’t tell the whole story. The issue is whether asthmatics (asthma being a potentially life threatening condition) are put at risk by self-medicating with a type of inhaler which may not be effective, e.g.
http://www.ncbi.nlm.nih.gov/pubmed/19054424
How much motivation is “save the planet” versus how much is just the garden variety concern of FDA doctors who think a product is unsafe but who also know how difficult it is to prove that case to the satisfaction of litigious generic drug manufacturers; so the path of least resistance may be to blame it on ozone depletion. I really don’t know for sure; probably it will come out eventually.
– Larry Weisenthal/Huntington Beach CA
@openid.aol.com/runnswim:
If you know any asthmatics you learn that the old type (propelled by that Ozone-depleting stuff) makes it deep enough into the lungs to be helpful.
The new propellants do not.
If paying 2 to 3 times more for a product that is not as good doesn’t bother you….
How about the fact that I cannot practice medicine without a license but OUR Gov’t is doing so?
Obviously, to greenies, any individual is less important than ”the planet.”
This is not just stupid.
It is expensive.
And it is dangerous.
People will die.
There are some greenies (like those in the Voluntary Human Extinction Movement) who look upon human life as the problem.
Maybe they are making public medical policy.
Hi Nan. In the first place, the FDA docs who make these decisions are licensed physicians, generally in the PHS commissioned corps. In the second place, I’m certain that the FDA wouldn’t have approved the new propellents without having demonstrated bioequivalency. I just did a very brief search and the following immediately popped up. I’m certain that there were many similar studies. You really can’t rely on anecdotes. It’s a way too subjective and placebo effect is very real and very strong.
http://www.bmj.com/content/310/6995/1639.2.full
– Larry Weisenthal/Huntington Beach CA
@openid.aol.com/runnswim:
Larry, with asthma I’d guess at least 80% of it is placebo.
Everybody I know who ”has it” seems fine.
(Heck, I’ve even met a couple of competitive (Olympics) level runners who take the inhaler yet seem super-fine.)
But, subject them to a surprise price hike on something, or any other bad news and Wham! they need a hit off their inhaler.
Since this disease seems so much to be ”all in their head,” why make them pay through the nose for their ”treatments?”
(Did I even mention that my own dad was said to have it as a child? As soon as he wanted to join the military and fight in WWII he never had a symptom again. He wrote on his Navy paperwork that he had no chronic health issues. Also the Navy doctor didn’t see any sign of it.)
Hi Nan. Asthma is a mixed bag. Sort of like being a fireman. Hours of boredom. Moments of terror. Asthma causes close to 4,000 deaths per year in the USA, about 150 of these deaths in very young people (less than 15 years old) who have no business dying. In contrast, there are about 700 asthma deaths in people over the age of 85. But most people never have anything more than very mild disease, some of which may be simply psychosomatic.
But the expense in managing asthma, including ER visits, is positively huge.
– LW/HB
Came across an interesting stat. In “soak the rich” / Class Warfare California, the top 1% pay 7.8% of their income for state and local taxes, while the bottom 20% pay 11.1% of their income for these taxes.
That 7.8% tax burden for the wealthiest 1% of Californians is less than the corresponding tax burden for the average Texan.
http://www.cbp.org/pdfs/2011/110412_Who_Pays_Taxes.pdf
This is class warfare, all right, only no one seems to be up in arms when poor people get overtaxed, only when rich people are perceived to be overtaxed.
– Larry Weisenthal/Huntington Beach, CA
@openid.aol.com/runnswim:
Larry, find equivalent studies that include older people.
This on skips that large tax-avoiding class.
Gee, let’s compare apples and oranges, shall we?
Get a full study of all Californians and we can start an honest conversation.
Hi Nan. What makes you think older people are “tax avoiding? I don’t understand your point. Can you explain?
– Larry
@gary kukis:
We’ve seen this before. We are told by progressives that they are going after the wealthy who can afford to pay more in taxes, but it always ends up that taxes also go up for the middle class.
When a permanent income tax was originally put in place in 1913 under the progressive Woodrow Wilson administration. The tax was assessed against individuals and corporations (as capital gains tax and salaried income taxes). In 1943, withholding taxes on wages was introduced by FDR’s administration, increasing the number of people paying income taxes to 60 million. An angry public was told that the wage withholding tax was only a temporary measure to repay the costs of WWII and that taxes on wages would stop once the war debt was paid off. Ie. the Democrats played the “patriotic” rhetoric to ease indignation, IMO figuring that this promise would be conveniently “forgotten” and by the time the war debt was paid off, the public would be used to paying this tax. This is the same taxation rhetoric shell game that Democrats and some Republicans have been playing on us continually.