Saturday, April 30, 2011

Faster Funds Transfer To The Rich (Part 2)...

     ...or starve the government beast – take your pick.
     On April 24th I wrote about Rep. Paul Ryan's (R-Wis) “Roadmap For America's Future,” and its planned changes to our income tax structure. Today I will look at the Roadmap's proposals for the health care system. Although there is a connection between the health care system and Medicare, I will defer discussion of Medicare/Medicaid/Social Security until a later date.
     Under the traditional system, people buy medical treatment either by paying cash for services or by buying insurance. Those who cannot afford either method may be eligible for Medicaid, and those over 65 years of age get partial coverage under Medicare. Medigap insurance is also available to cover the difference between Medicare coverage and actual medical expenses.
     The Patient Protection and Affordable Care Act (PPACA) is a federal statute that was signed into law by President Barack Obama on March 23, 2010. This Act and the Health Care and Education Reconciliation Act of 2010 (signed into law on March 30, 2010) collectively make up the Health Care Act of 2010. The Act becomes fully operational in 2014.
     The primary purpose of the 2010 Act is to provide coverage for some 32M Americans who were not previously covered by health insurance. Illegal aliens will not be covered.
     A second major purpose of this Act is to reduce the federal deficit. The nonpartisan Congressional Budget Office estimated that the legislation will reduce the deficit by $143B over the first decade and by $1.2 trillion in the second decade.
     The GOP's congressional economic experts decided that the professional economists in their own budget office were blowing smoke, hence the following “improvements” are proposed by Ryan's Roadmap.
     First and most important, despite the fact that a large majority of Americans support most of its provisions, the 2010 Act must be repealed in its entirety. Never mind that 32M Americans citizens will not get the health care coverage they have been promised.
     Instead, they will get a tax credit of $2,300 (single) or $5,700 (family) for the purchase of health care insurance. The government will remit the credit directly to the insurance company. Keep in mind that many of these people have not been insured in the past because they could not afford to purchase insurance. Most of them have too little income to pay taxes, hence a tax credit is as helpful to them as hip boots in the Sahara.
     Of course, actual health care costs keep spiraling upward much faster than the inflation rate. Even if the tax credit is indexed for inflation, how long will it be before the credit is swamped by rising medical costs?
     The Roadmap also provides for state-based health care insurance exchanges - the states would be allowed to create their own criteria for health insurance requirements.
     States would also be provided with tools to help them set up high-risk pools so that people who would be turned down for regular insurance because of pre-existing conditions could find “affordable” insurance. (Under the 2010 Act, insurers are not allowed to reject an applicant because of pre-existing conditions.) With state budgets already in dire straits, one can bet the family farm that such plans will quickly fall short of covering rapidly inflating medical costs.
     Ryan's plan for controlling health care costs is to encourage competition by requiring that information regarding price and quality of various plans is “transparent” so that “this critical information [is] readily available before someone needs health services.” Unfettered competition between health care providers and insurers got us to where we were before passage of the 2010 Act. How did that work out?
     Oh yes, the feds would assist states in establishing solutions to malpractice litigation. Perhaps a better idea would be to find a way to pay providers on the basis of the quality of their care rather than on the of the number of patients treated and tests performed.
     The insurance companies love the Roadmap - it's a great way to speed up the flow of assets into the pockets of their investors. It's also a giant leap toward balancing the Federal Budget on the backs of those least able to afford it. And it's the same old Scroogican Screwgican(?) BS.
     For over 13 billion years the Spirit has been transcending and transforming point/events to adjust to their immediate surroundings. The primeval constructs were the most stable: quarks, electrons, etc.; constructs with such complete internal adjustments that they are impossible to tear apart. These were the "clay" from which atoms, the basic building blocks of the physical universe, were constructed.
     Matter Matters – The Spirit Runs Through It.

“The Spirit Runs Through It” and “There Are Only Seven Jokes” are available in paperback, or at the Kindle Store.

Sunday, April 24, 2011

Faster Funds Transfer To The Rich...

     ...or starve the government beast – take your pick.
     As with all such plans, Rep. Paul Ryan's (R-Wis) “Roadmap For America's Future” contains numerous changes to our national priorities. Today I wish to write about the changes Ryan and the Republican Party would make to our income tax structure. I will discuss other facets of the Roadmap in upcoming days.
     The Roadmap would not repeal our current personal income tax structure, but would set up a simplified system parallel to it. Taxpayers would be allowed to choose which system they wish to use.
     Under the simplified system there would be only two tax brackets, 10% on the first $100K of taxable income for joint filers, and 25% on taxable income in excess of $100K. It would allow a generous standard deduction and personal allowance ($39K for a family of four). The only credit allowed would be a healthcare credit, which I will discuss at a later date. In short, for the vast majority of taxpayers, the Roadmap would guarantee that they would pay no more under the new system than under the current system.
     However, those taxpayers with gross income of more than $137,300 (2010 rates) would pay considerably less. For a family of four with a gross income of $1M, the savings would be almost $60,000. The higher the income, the greater the savings.
     But that's not all. A large portion of the income of most high bracket taxpayers consists of interest, dividends and capital gains. Under the Roadmap, the tax on these items would be eliminated.
     As I have noted previously, (see March 9, 2011) some hedge fund managers have incomes of over $1B, with one of them taking home $5B. Since that income consists of capital gains, the current 15% tax would drop to zero! Admittedly, this is an extreme case, but you get the picture.
     To top it off, the Roadmap would replace the income tax on corporations with a “consumption” or Value Added Tax (VAT), a term which the Roadmap is very careful to avoid. From the standpoint of the end user this is essentially a price increase. The Roadmap suggests a rate of 8.5% - about half of the lowest VAT rate in the European Union. At each stage of production, manufacturers would pay the tax on the value they have added to the product. Responsibility for the collection of the tax would be shifted from the government to the manufacturer.
     I see two problems with this: (1) Based on the experience of countries operating under a VAT system, it is doubtful that a rate of 8.5% would be enough to pay the government's bills, and (2) there are tremendous opportunities for gaming the system in the company's favor, particularly for those organizations having manufacturing facilities in countries such as India and China, which have no VAT.
     It appears that the “Roadmap for America's Future” is more of the same old GOP crap, with the intention of (1) speeding up the moving of resources into the pockets of the already rich, and (2) starving the “government beast,” with the ultimate aim of returning our economy to the good old days of 1929.
     While it is not difficult to apply the assembly line metaphor to external constructs, it is not so simple to picture how it applies to internal constructs. How can a noun such as love, pain, joy, jealousy or beauty apply to a volume of space/time?
     An In-depth Look At The Spirit's Activity – The Spirit Runs Through It.

      “The Spirit Runs Through It” and “There Are Only Seven Jokes” are available in paperback, or at the Kindle Store.

Friday, April 8, 2011

New Book Available

     In the unlikely event that readers did not notice the new heading for this blog, please look at it now. It's true – I now have two books for sale on the internet.
     The radio show Can You Top This? ran on NBC from 1940 until 1954. As many as 6,000 jokes per week were submitted by the radio audience. Emcee Peter Donald read those selected to a panel of three comedians, “Senator” Edward Ford, Harry Hershfield and Joe Laurie, Jr. It was up to each of the three panelists to “top” Donald's joke with another on the same subject. Judgement was rendered by a “laugh meter,” which measured the reaction of the studio audience to each joke. Contestants whose jokes were used on the air received ten dollars; each time one of the panelist's jokes did not top Donald's joke, the contestant received an extra two dollars.
     During one of the airings, one of the panelists made the statement, “There are only seven jokes.” Unfortunately, he didn't elaborate.
     I have heard the statement repeated many times over the years, and no one ever knew what the seven jokes were. So I decided to do some research on the subject. The book, There Are Only Seven Jokes, is a record of what I discovered.
     For any of my readers who may be on Facebook, you are invited to join the group, “There Are Only Seven Jokes.” If you have ever wondered about the seven jokes, this is the group where you can find answers.
     The book also contains a collection of short stories which I have put together over the past 14 years. I hope you enjoy reading them as much as I did writing them.
     Both books are available in paperback. “The Spirit Runs Through It” is also available on Kindle.