Author Topic: How do Senators Warren and Sanders Define "Middle Class"?  (Read 4218 times)

Sanitary Stache

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How do Senators Warren and Sanders Define "Middle Class"?
« on: November 01, 2019, 08:27:50 AM »
I have been trying to understand their Medicare for All proposals.  Don't get me wrong. Single Payer Health Care is a necessity, but I would actually expect to pay for it.  Pay less than I do now, for better heath care and for more people to have access, but still to pay for it.

Warren just announced her tax plan, which seems to be to take the money from the wealthy people in some fashion.  I didn't read it all yet. There does appear to be come amount of taking form the defense industry and somehow achieving other tax collection and immigration cost (?) efficiencies that I don't buy on their face value.
https://elizabethwarren.com/plans/paying-for-m4a

The "calculator" at the top of the page is pretty hilarious.

I am wondering who she thinks is in this "Middle Class" bucket that she says wont be paying any new taxes. Has anyone read where they try to define this category?

ncornilsen

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #1 on: November 01, 2019, 08:53:40 AM »
You honestly think she's going to box herself in by defining too many things?

I do know that Sanders seems to say it will save you money*   

*assuming a years worth of the most abhorrently high premiums he could find, and that you hit the out of pocket maximum, every single year, it breaks even.  Which is a fancy way of lying to you, and insulting your intelligence.

« Last Edit: November 01, 2019, 09:19:31 AM by ncornilsen »

Philociraptor

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #2 on: November 01, 2019, 09:56:36 AM »
Not sure how those two define it but this Wikipedia page shows three academic class models side by side and they tend to agree that "middle class" is roughly those in the 50-90 percentile of income, while "working class" is those in the 15-50 percentile. There's also a nice distribution table right under from 2014 Census Bureau data.

bacchi

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #3 on: November 01, 2019, 10:58:53 AM »
Warren's wealth tax starts at $50 million. This is one reason why it didn't work well in Europe -- it started much lower and affected older people who had accumulated wealth by saving €1000/month.

Quote from: warren
My Ultra-Millionaire Tax, a 2-cent tax on the wealth of fortunes above $50 million, tackles this head on. Under this tax, the top 0.1% – the wealthiest 75,000 Americans – would have to pitch in two cents for every dollar of net worth above $50 million and three cents for every dollar on net worth over $1 billion.

Re: medicare for all

We're already paying >2x what other countries are paying for health care. If we can beat that already low bar, we'd save money.

Sanitary Stache

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #4 on: November 01, 2019, 11:25:21 AM »
@Philociraptor 
That is a useful metric.

@ncornilsen I don't mind the lie that single payer will save me money, that lie is true for some people.  I'd be happy to pay what I pay, especially if the ridiculous amount my employer pays for my health insurance is considered my contribution. It's the lie that I won't have to pay at all that really bothers me.

I looked through my premiums.  My company pays about $18,000 for my premium.  I pay about $4,500.  Then I have to keep $17,000 on hand to meet the out of pocket maximum, and replenish this amount as actual health care expenses are incurred.    At some point I might not need to spend the $3,700 deductible each year, but that isn't right now. And then if my actual health care costs are less than $3,700 per year why I do I need insurance that costs >$20,000 per year?
I think if I made twice as much as I do, still considered middle class, I would expect my total health insurance costs to go up with a single payer model.  But at the lower end of middle class, I am already paying 10% of my gross income with no price control and the possiblilty that I would have to come up with much more unexpectedly - it's like I need insurance for my health insurance.
I guess that sets my expectation on what a reasonable middle class health care tax would be - boost the FICA tax to 17% and give everyone access to health care without threat of total financial ruin.

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #5 on: November 01, 2019, 11:51:00 AM »
Warren's wealth tax starts at $50 million. This is one reason why it didn't work well in Europe -- it started much lower and affected older people who had accumulated wealth by saving €1000/month.

Quote from: warren
My Ultra-Millionaire Tax, a 2-cent tax on the wealth of fortunes above $50 million, tackles this head on. Under this tax, the top 0.1% – the wealthiest 75,000 Americans – would have to pitch in two cents for every dollar of net worth above $50 million and three cents for every dollar on net worth over $1 billion.

When you say a wealth tax didn't work well are you talking about how disruptive it was for people, or how much less money it raised than expected?

My understanding is that a big problem with the wealth taxes tried in Europe is that they brought in a LOT less money than hoped due to tax avoidance strategies and wealthy people relocating to other european countries that lacked equivalent wealth taxes. I'd think the people with a couple of million would be less in a position to either employ complex tax dodges and less likely to move out of the country to avoid paying the tax than the super wealthy with $50M plus.

So I agree Warren's wealth tax would be much less disruptive to regular americans than imposing a wealth tax that replicated the french model, but I've also been assuming it will probably be even more disappointing in terms of revenue generation than the french model (1.8% above ~$20M US, other lower rates from about $900k to $20M). In 2007 (the year I could find good data for) the French wealth tax brought in about 0.17% of GDP in revenue.

Using france's wealth tax as our guide but applying it to the much larger GDP of the USA in 2019 we'd predict a similar tax would bring in the equivalent of $32B/year in the USA today. That's less than 1/8th as much as Warren says it would raise ($275B/year).

Other caveats in the comparison:
-Warren's tax has a higher maximum rate (2% on $50M-$1B and 3% over $1B vs 1.8% for the entire range covered by Warren's tax in France, plus lower rates on households with less wealth). Advantage Warren.
-Frances's tax had a much broader base to raise revenue from (about 1.2% of the households paid the tax vs Warren's tax that would apply to only the richest 0.06% of american households). Advantage France
-US income/wealth distribution is more skewed than France's, so the wealth of our top 0.06% as a percent of GDP is likely higher than France's, but it's not clear if that's enough to make up for taxing only 1/20th as large a proportion of total households.  Advantage unclear.

bacchi

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #6 on: November 01, 2019, 12:59:29 PM »
Warren's wealth tax starts at $50 million. This is one reason why it didn't work well in Europe -- it started much lower and affected older people who had accumulated wealth by saving €1000/month.

Quote from: warren
My Ultra-Millionaire Tax, a 2-cent tax on the wealth of fortunes above $50 million, tackles this head on. Under this tax, the top 0.1% – the wealthiest 75,000 Americans – would have to pitch in two cents for every dollar of net worth above $50 million and three cents for every dollar on net worth over $1 billion.

When you say a wealth tax didn't work well are you talking about how disruptive it was for people, or how much less money it raised than expected?

Both. Telling a 60 year old with €1.3M that they're wealthy and need to pay a wealth tax angers a lot of people who saved a little each month and don't feel wealthy. Sure, they can take a vacation to America but they don't have a 9 bedroom mansion, a Ferrari for fun, and a Bugatti as a daily driver.

Quote
My understanding is that a big problem with the wealth taxes tried in Europe is that they brought in a LOT less money than hoped due to tax avoidance strategies and wealthy people relocating to other european countries that lacked equivalent wealth taxes. I'd think the people with a couple of million would be less in a position to either employ complex tax dodges and less likely to move out of the country to avoid paying the tax than the super wealthy with $50M plus.

Correct. When France taxes at 1.3M, the citizen can just move to Portugal. That's much more difficult for US citizens; the IRS requires an exit tax and golden passports are costly. The exit tax isn't cheap as it requires a mark-to-market "sale" of all assets on the day of renunciation.

Then we have the issue of where a US citizen would move to to save some money. Russia? China? Europe and its high taxes? Singapore and Australia are probably the best choices.

Travis

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #7 on: November 01, 2019, 06:41:44 PM »
Warren's wealth tax starts at $50 million. This is one reason why it didn't work well in Europe -- it started much lower and affected older people who had accumulated wealth by saving €1000/month.

Quote from: warren
My Ultra-Millionaire Tax, a 2-cent tax on the wealth of fortunes above $50 million, tackles this head on. Under this tax, the top 0.1% – the wealthiest 75,000 Americans – would have to pitch in two cents for every dollar of net worth above $50 million and three cents for every dollar on net worth over $1 billion.

Re: medicare for all

We're already paying >2x what other countries are paying for health care. If we can beat that already low bar, we'd save money.

Nobody wants to take on the insurance/health care billing side of the equation. It's easier to just throw more money at the problem. Same with university tuition.

bacchi

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #8 on: November 01, 2019, 09:59:54 PM »
Quote from: bacchi
Re: medicare for all

We're already paying >2x what other countries are paying for health care. If we can beat that already low bar, we'd save money.

Nobody wants to take on the insurance/health care billing side of the equation. It's easier to just throw more money at the problem. Same with university tuition.

Yeah, I was thinking about that. If the Medicare-4-All is just layered on top of what we have now, it'll cost us more. Way more. If we actually follow what many other countries have done, it'll cost less or, at worst, the same.


eta: fixed quote
« Last Edit: November 02, 2019, 09:39:45 AM by bacchi »

LaineyAZ

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #9 on: November 02, 2019, 08:43:08 AM »
To be fair, there hasn't been any movement on the cost side of healthcare because of the fierce opposition in Congress.  They are obligated to their political donors from the medico-pharma industries and therefore do not even entertain any bills that would, e.g., allow Medicare users to have volume drug pricing like the Veterans Administration does. 
That stalemate, like so many on progressive issues, stems from the need for campaign finance reform.
 
I think Warren, Sanders, et al. are completely aware of this and so their plans are based on that current political reality.

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #10 on: November 02, 2019, 10:11:14 AM »
Quote
My understanding is that a big problem with the wealth taxes tried in Europe is that they brought in a LOT less money than hoped due to tax avoidance strategies and wealthy people relocating to other european countries that lacked equivalent wealth taxes. I'd think the people with a couple of million would be less in a position to either employ complex tax dodges and less likely to move out of the country to avoid paying the tax than the super wealthy with $50M plus.

Correct. When France taxes at 1.3M, the citizen can just move to Portugal. That's much more difficult for US citizens; the IRS requires an exit tax and golden passports are costly. The exit tax isn't cheap as it requires a mark-to-market "sale" of all assets on the day of renunciation.

Then we have the issue of where a US citizen would move to to save some money. Russia? China? Europe and its high taxes? Singapore and Australia are probably the best choices.

I agree it is easier for people within the Eurozone to move from one country to another based on tax considerations, but I'm not sure that is big enough to cancel out how much more mobile the super wealthy are compared to the more moderately wealthy.

The cost of a "golden passport" is much more of a barrier to emigrating to avoid a wealth tax for the a retired couple with a net worth of ~$1.5M US (1.3M euros) than it is for someone with a net worth of $50M or $1B.* The exit tax is a more effective barrier for some types of super wealthy people than others. For a Mark Zuckerberg or Elon Musk whose fortune is almost entirely made up of highly appreciated stock in one or two publicly traded companies the exit tax would take 23.8% off the top, it it might take 8-10 or so years to break even from leaving the USA.** For folks who have had to realize more capital gains alone the way, or people who inherited a lot of their wealth which resets the cost basis,*** the break even point for leaving might be only a couple of years.

In terms of where people will go, I suspect you're right that Australia and Singapore (where Eduardo Saverin moved to avoid taxes on his multibillion dollar stake in facebook) would be attractive options. Probably also New Zealand (that's where Peter Theil got a second passport after spending only 12 days in the country) which as far as I can tell has no tax at all on capital gains. Then there are European countries like Belgium and Switzerland that, while they aren't exactly low tax overall, do have very favorable treatment for capital gains/investment income. Belgium is where a number of famous wealthy french people moved to avoid that wealth tax.

Now in fairness, until recently I would have put Hong Kong on the list as well. I'm guessing it doesn't look like an appealing place for billionaires to decamillionaires to move to today. So fear of similar things happening in the other countries you and I were able to brainstorm may also act as a barrier to people leaving for tax reasons.

I completely agree with the intent of the wealth tax. I just am also convinced it's going to produce a lot less revenue than Warren is projecting and there may be more effective ways to get millionaires and billionaires to pay more of their fair share.

*If you have enough money to satisfy the requirements, the actual cost of many investor passports or visas is actually a lot lower than it can look like. In many cases the requirement is that you invest at least $X in a local company or buy a property worth at least $Y. So the money doesn't go away, it's just locked up for a number of years potentially earning a less than market rate return. For a person able to invest $1-2M for 5 plus years and not miss it, the actual cost might be only in the tens of thousands of dollars.

**Assuming they moved somewhere with comparable tax law to the USA.

***And more and more of our billionaires inherited their wealth rather than achieving it in their own lifetimes.

Bloop Bloop

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #11 on: November 02, 2019, 05:13:04 PM »
Australia is a punishing environment for anyone with money. Our highest rate of 47.5% kicks in at just AUD $180,000 (US $130,000). All states have a progressive land tax. There is a 33% luxury car tax. Our minimum wage is the highest in the world. Yet our professional wages are not much chop compared to those in the UK/US. It is very hard to become rich in Australia.

If you want to move somewhere, move to New Zealand. Taxes there, both on consumption and income, are lower. Living standards and incomes are lower too but not much lower, so your buck will go further.

ctuser1

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #12 on: November 02, 2019, 06:25:47 PM »
When you try to tackle anything as complex, and yet as necessary as the healthcare system, you have to go incrementally.

You can't simply throw it all out and hope your uber-complex new system will somehow be the perfect one from day one.

Politics seems to demand black and white answers. I am afraid Warren/Sanders are boxing themselves in with too many specifics at this state. Obamacare was a giant leap forward, but not enough to tackle 2X spending. Once/if any of them are in the position of making any further change(s) (e.g. if any of them are the president), they need to take stock of the prevailing political realities and make the next leap forward incrementally. What could that be? Maybe medicare buy in as the public option + negotiated drug prices + nobody in US pays more than the average of other OECD countries + look at egregious over-spenders (e.g. most of Texas) and install regulators from champion medical cost savers (Cleveland/Grand Junction, CO) with a mandate and sufficient stick to rein in the costs. Maybe a combination of all of the above.

Like anyone with some degree of realism, I bet Warren/Sanders knows the reality of what they can achieve and how, and yet understands that politics demands black and white answers. Given this, I am puzzled by how much Warren/Sanders have allowed themselves to be boxed in. I'd have thought they should simply have repeated "Do you like paying double for worse outcome? If so can I do other business, unrelated to medicine, with you?" as a retort any time someone asks for specifics. Specifics are simply not obtainable till the political chess-pieces fall in places. The guidepost - don't spend double for worse outcome - is, however, very clear!!

Just like I am puzzled at how Warren/Sanders handled these questions, I am also puzzled at the demand for n-th degree of details in these forums. We friggin pay DOUBLE for WORSE outcomes compared to all other OECD countries. How can any replacement, in aggregate, be any worse??

Sanitary Stache

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #13 on: November 04, 2019, 07:16:33 AM »
Just like I am puzzled at how Warren/Sanders handled these questions, I am also puzzled at the demand for n-th degree of details in these forums. We friggin pay DOUBLE for WORSE outcomes compared to all other OECD countries. How can any replacement, in aggregate, be any worse??

This is where I am at also.  The NPR article that got me thinking along this topic recently said the Bernie was not yet saying how he would pay for Medicare for All.  It didn't say anything about how the US pays double for worse outcomes and it didn't try to delineate the politically or government process reality that would exist for anyone to make an improvement to the situation.

I would love "paying double for worse outcomes" to be the rallying cry and that might get the whole topic away from a left/right polarization.

ctuser1

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #14 on: November 04, 2019, 08:09:32 AM »
I would love "paying double for worse outcomes" to be the rallying cry and that might get the whole topic away from a left/right polarization.

The reasons why this does not become a rallying cry is pretty obvious.

The number of interests lined up against reducing healthcare costs is HUGE:
1. Each and every Republican Donor - because they like crony capitalism too much and oppose efficient markets in general.
2. Doctors union/AMA (Bringing healthcare costs in line with other countries will require bringing doctor pay inline with other countries. See how many docs you can get to support that.)
3. Insurance companies, for understandable reasons.
4. Democratic politicians in states with large presence of the insurance industry (including the one I live in).

When you have a heart attack and are at the ER in the hospital - the hospital IS a monopoly. So a monopoly IS doing what it does best, which is messing up the market efficiency for EVERYONE, including itself, by monopolistic rent-seeking.

Anytime someone tries to bring up this monopolistic rent seeking issue to the forefront, and tries to support economic efficiency in any form or format, the interests lined up above against it astroturf or do something else to suppress that discussion. There is a massive industry of "online reputation management" and there are loads of people whose livelihood directly depends on making sure that "we the sheeple" continue paying double for worse and that the discussion never veer to that specific topic.

Try someday to bring that up for discussion in any internet fora with wide following. See how immediately you get a deluge of extremely well prepared, professional looking talking points as counter. Apparently some so-called "conservatives" think it is a good idea to pay double for worse because the lawyers and shills can present very nice-sounding arguments that go on for pages!!

I wonder how many of them are shills for AMA/GOP/Kremlin.
« Last Edit: November 04, 2019, 08:25:51 AM by ctuser1 »

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #15 on: November 05, 2019, 07:59:45 AM »
Not to sound like a broken record on the wealth tax, but I saw that Warren has actually increased the maximum wealth tax to 6%/year. (Source: https://www.npr.org/2019/11/01/775339519/heres-how-warren-finds-20-5-trillion-to-pay-for-medicare-for-all). As far as I can tell, she also projects that a 6% tax will raise 2x as much money as a 3% tax.*

If being a US citizen means paying 6% of net worth per year, a much bigger range of countries will start to look attractive as alternative permanent residences for billionaires. Assuming an average of 9% annual return (nominal, not inflation adjusted), a US billionaire could move to Australia, pay 47.5% tax like Bleep Bloop, and still come out ahead of folks who stayed in the USA and were paying something like 67% of their investment returns each year in wealth taxes, and then still owing capital gains/dividend taxes of 23.8% on top of the wealth tax.

I completely understand the impulse behind taxes like these. I'm not arguing against a wealth tax because I think I wealth tax is unfair (I don't think a wealth tax is unfair). I just don't think it will produce anything like the revenue her campaign is counting on it to produce, so counting on a wealth tax as a major source of revenue is bad strategy/bad policy.

*I could be wrong here so if someone had a breakdown of how much revenue the Warren campaign projected for the 3% tax vs the 6% tax please let me know.

seattlecyclone

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #16 on: November 05, 2019, 02:51:44 PM »
Don't forget about the income tax that one of these founder-billionaires will have to pay in order to come up with the cash to pay the wealth tax. Most of Jeff Bezos' wealth is in Amazon shares with a cost basis of next to nothing. If he has to pay $1 billion of wealth tax he'll have to sell $1 billon of shares, which will expose him to something like $238 million of capital gains and net investment income taxes. He'll have to sell $238 million of additional stock to pay for that, which will expose him to $56.6 million more of tax liability, and so on. Sum up the infinite series and that 6% wealth tax looks a lot more like an 8% wealth tax, at least for those folks without much in the way of high-basis assets to liquidate.

A lot of these hyper-wealthy folks have already made public pledges to give the majority of their wealth to charity in the future since there's no way they could possibly spend it all on themselves in their lifetimes. I'd bet many of them accelerate the creation of their charitable foundations in response to any wealth tax.

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #17 on: November 05, 2019, 05:01:11 PM »
You're definitely right. If I'm doing the math right,* assuming a zero cost basis, one would need to sell 1.312x as many shares to both cover the wealth tax AND cover the 23.8% capital gains tax on the shares being sold, so the worst case scenario would be a ~7.9% effective wealth tax per year.

I missed this line in Warren's tax plan: "Eliminate the preferential tax rates on long-term capital gains and qualified dividends for the top 1 percent of households and apply ordinary income tax rates."

So the capital gains rate wouldn't be 23.8% but 37% (top income tax bracket rate), which would mean the Gates, Buffetts, and Bezoses of the world would actually need to sell 1.587x as many shares each year to cover the wealth tax and pay capital gain tax at regular income tax levels, and the effective wealth tax rate would be 9.5% per year.


Accelerating charitable giving had not occurred to me as another way to try to avoid paying the tax, but I agree it makes sense and would likely be the strategy people like Buffett and Gates would adopt. Giving money to charity sooner rather than later might have some significant societal benefits, but it'd still be another mechanism that would reduce the amount of revenue available from such a tax below what is forecast.

* 1/(1-0.238) = ~1.312
« Last Edit: November 05, 2019, 09:28:37 PM by maizeman »

EscapeVelocity2020

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #18 on: November 05, 2019, 08:48:26 PM »
Well this has become a pretty depressing thread quickly.  First of all, we have a forum of people seeking FI (1-2M) worrying that folks with 50M+ are being 'taxed' too much.  Uh, really?  Taxes only reduce excess, it's not like these taxes are going to reduce or affect these folks if they fall below 50M, so why are we getting so worked up about it?

The inflation of the cost of healthcare in America is unsustainable.  We have a system that is unique and broken.    Eventually, us or someone we know will need healthcare.  And ultimately, a country cannot afford to be in debt and declare bankruptcy to healthcare bills forever.  We are basically one medical emergency away from losing the lottery, and we are the smart people that don't want to play the lottery.

Younger American working families (the ones that provide our future passive income) need a solution, so unless you are contributing to what is a better policy, then stop just complaining that this is not perfect. 

But what is most 'sad' is that we allow politicians to leave our choices as basically black or white (Trump or Warren).  This is what faces us in coming elections unless we get some real political discourse going again.

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #19 on: November 05, 2019, 09:17:11 PM »
Well this has become a pretty depressing thread quickly.  First of all, we have a forum of people seeking FI (1-2M) worrying that folks with 50M+ are being 'taxed' too much.  Uh, really?  Taxes only reduce excess, it's not like these taxes are going to reduce or affect these folks if they fall below 50M, so why are we getting so worked up about it?

Because people are counting on that money to help cover the cost of healthcare and everything I've read about experiences in other countries suggests the money won't actually be there.

If someone posted a case study in that section of the forum and was talking about how they thought they could achieve FI by cancelling cable and giving up starbucks and that this would reduce their monthly spending by $5,000/month, I would also be skeptical that their proposed change in behavior would produce the cash flow they were claiming.

Quote
The inflation of the cost of healthcare in America is unsustainable.  We have a system that is unique and broken.    Eventually, us or someone we know will need healthcare.  And ultimately, a country cannot afford to be in debt and declare bankruptcy to healthcare bills forever.  We are basically one medical emergency away from losing the lottery, and we are the smart people that don't want to play the lottery.

Younger American working families (the ones that provide our future passive income) need a solution, so unless you are contributing to what is a better policy, then stop just complaining that this is not perfect. 

Let's see: Yang and Buttigieg and Biden's plans would all expand and build upon the existing ACA exchanges and healthcare subsidies, with Yang and Buttigieg also providing access to a public option by letting anyone who wants to buy into Medicare but not right banning private insurance like Warren and Sanders' plans would.

These plans would cost between $74-150 billion a year (Biden's is more stingy and is the lower end of that spectrum), and be a big improvement over the health insurance we have today, bringing us more on line with how healthcare is delivered in countries like Australia.

In contrast, the Warren and Bernie plans would cost between $2,050 and $3,400 billion a year in new federal funding (14-45x as much as other major democratic candidates), and it's not clear to me that the outcomes would be much better that a strong public option ("Medicare for all who want it").

Quote
But what is most 'sad' is that we allow politicians to leave our choices as basically black or white (Trump or Warren).  This is what faces us in coming elections unless we get some real political discourse going again.

EV I disagree with this assertion. We have lots of options that are not Bernie and Warren on the one hand, or Trump on the other.

That's where candidates like Buttigieg, Yang, and Biden come in.

EscapeVelocity2020

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #20 on: November 05, 2019, 10:30:53 PM »
Well this has become a pretty depressing thread quickly.  First of all, we have a forum of people seeking FI (1-2M) worrying that folks with 50M+ are being 'taxed' too much.  Uh, really?  Taxes only reduce excess, it's not like these taxes are going to reduce or affect these folks if they fall below 50M, so why are we getting so worked up about it?

Because people are counting on that money to help cover the cost of healthcare and everything I've read about experiences in other countries suggests the money won't actually be there. (1)

If someone posted a case study in that section of the forum and was talking about how they thought they could achieve FI by cancelling cable and giving up starbucks and that this would reduce their monthly spending by $5,000/month, I would also be skeptical that their proposed change in behavior would produce the cash flow they were claiming.

Quote
The inflation of the cost of healthcare in America is unsustainable.  We have a system that is unique and broken.    Eventually, us or someone we know will need healthcare.  And ultimately, a country cannot afford to be in debt and declare bankruptcy to healthcare bills forever.  We are basically one medical emergency away from losing the lottery, and we are the smart people that don't want to play the lottery.

Younger American working families (the ones that provide our future passive income) need a solution, so unless you are contributing to what is a better policy, then stop just complaining that this is not perfect. 

Let's see: Yang and Buttigieg and Biden's plans would all expand and build upon the existing ACA exchanges and healthcare subsidies, with Yang and Buttigieg also providing access to a public option by letting anyone who wants to buy into Medicare but not right banning private insurance like Warren and Sanders' plans would. (2)

These plans would cost between $74-150 billion a year (Biden's is more stingy and is the lower end of that spectrum), and be a big improvement over the health insurance we have today, bringing us more on line with how healthcare is delivered in countries like Australia.

In contrast, the Warren and Bernie plans would cost between $2,050 and $3,400 billion a year in new federal funding (14-45x as much as other major democratic candidates), and it's not clear to me that the outcomes would be much better that a strong public option ("Medicare for all who want it").

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But what is most 'sad' is that we allow politicians to leave our choices as basically black or white (Trump or Warren).  This is what faces us in coming elections unless we get some real political discourse going again.

EV I disagree with this assertion. We have lots of options that are not Bernie and Warren on the one hand, or Trump on the other.

That's where candidates like Buttigieg, Yang, and Biden come in (3).


(1)  So why do you think the US has a better solution to the problem?  Not to mention, other 'socialist' countries are assuming that they will continue to provide healthcare and seem to be much further down the path to making this a reality.

(2)  This should be an eye-opener to how unsustainable access to 'what the rest of the world provides' healthcare is.  But honestly, I don't think we will jump to Warren/Bernie healthcare, however they are there as psychological anchors now and Biden doesn't seem so untenable.

(3)  You and I may chuckle about this in this little corner of the internet, but the general populace is not us.  We can disagree all we like, but many big things in life are decided by 'popularity' and least common denominators.  Figure out the viral angle and you can beat any intellectual argument, at least in the short run.

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #21 on: November 06, 2019, 06:56:34 AM »
(1)  So why do you think the US has a better solution to the problem? (MM: note for clarity than a wealth tax)  Not to mention, other 'socialist' countries are assuming that they will continue to provide healthcare and seem to be much further down the path to making this a reality.

Because if we need to raise a bunch of money there are plenty of solutions that we know DO raise money either because they've been tried in other countries and succeeded where a wealth tax has failed, or because they've been tried in the USA in the past.

The biggest example of a tax that has succeeded in raising large amount of revenue for other countries that we don't have in the USA is a VAT. Most European countries have VATs around 20% (168 total countries have a VAT), but a VAT of even 10% in the USA has been estimated to raise $950 billion a year. Now the downside of a VAT is that, unless you are refunding the revenue back to tax payers (which is what Yang proposes to do with his VAT + UBI combo), it falls harder on people who spend their whole income, who tend to be poor, than people who save much of their income. So outside the context of a UBI, I'd consider the VAT a fallback option at best, but at least it's a fallback options with strong evidence that it would work, rather than strong evidence that it will not.

The biggest example of taxes that previously raised a lot of addition money for the US is our regular income tax. Rolling income taxes back to where they were under Obama would bring in about $230B/year extra, while rolling income taxes back to where they were under Clinton would bring in $530B/year extra. That's not enough to fund either the Warren or Sanders' healthcare plans but it is about as much total revenue as Warren expects to collect from the wealth tax (half of which she's said we wants to use as part of the funding for single payer healthcare in the USA and half of which she's said she'd use for universal pre-K, free college tuition, and paying off people's student loans).

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(2)  This should be an eye-opener to how unsustainable access to 'what the rest of the world provides' healthcare is.  But honestly, I don't think we will jump to Warren/Bernie healthcare, however they are there as psychological anchors now and Biden doesn't seem so untenable.

Moving the Overton window is a noble goal, and I agree that Warren's medicare for all plan is succeeding admirably in doing so. I'd feel better if she didn't seem to be the most likely democratic nominee at the moment though. For most of the primary season I'd thought she was indeed likely to be the nominee and I was okay with that (she wasn't not my first choice but also far far from my last). But I don't think a democratic candidate can win in the general with arguments and plans supported by truthiness rather that actual facts and data. It's rather disheartening.

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(3)  You and I may chuckle about this in this little corner of the internet (MM: note for clarity this is in response to my comment that there are other options to vote for besides Sanders/Warren and Trump), but the general populace is not us.  We can disagree all we like, but many big things in life are decided by 'popularity' and least common denominators.  Figure out the viral angle and you can beat any intellectual argument, at least in the short run.

EV, I'm having a bit of trouble following you in this discussion. Why would we be laughing at the idea there are options other than Warren and Trump?

I don't disagree with the power of viral ideas, but viral ideas in politics without evidence and reason behind them ultimately lead to bad outcomes. What one really hopes for is a candidate who combines a viral message with facts and figures that hold up once people pay enough attention to dig into it.

EscapeVelocity2020

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #22 on: November 06, 2019, 07:31:10 AM »
@maizeman Thanks for the bracketed clarifications to understand more precisely what you were responding to, I was veering off-thread and commenting more directly to the recent posts.  My final point (3) was that it seems like 'the general populace' knows very little about the alternatives to Warren/Bernie-Biden and Trump, let alone having the necessary discourse about what the problems are (healthcare for all) and what is being proposed by Yang, Buttegig, et. al.  So while we may split hairs over what VAT % seems palatable, I don't see much other than headlines being thrown back and forth.

As a side note but pertinent to this forum, I'd be much more inclined to dig in to these issues myself if I were ER, but I also don't feel like my time is best used trying to follow political issues.  I have opinions and am passionate the intersection of economics and politics, but that's about the extent of it. 

Thanks for your thoughts.  You might want to listen to this week's EconTalk podcast, loosely about having productive discourse online -
https://www.econtalk.org/venkatesh-rao-on-waldenponding/

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #23 on: November 06, 2019, 07:33:13 AM »
Thank you EV. Much easier to follow your reasoning now. I will check out that podcast on my ride home today. From the description it sounds fascinating!

ender

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #24 on: November 06, 2019, 07:55:18 AM »
@maizeman Thanks for the bracketed clarifications to understand more precisely what you were responding to, I was veering off-thread and commenting more directly to the recent posts.  My final point (3) was that it seems like 'the general populace' knows very little about the alternatives to Warren/Bernie-Biden and Trump, let alone having the necessary discourse about what the problems are (healthcare for all) and what is being proposed by Yang, Buttegig, et. al.  So while we may split hairs over what VAT % seems palatable, I don't see much other than headlines being thrown back and forth.

As a side note but pertinent to this forum, I'd be much more inclined to dig in to these issues myself if I were ER, but I also don't feel like my time is best used trying to follow political issues.  I have opinions and am passionate the intersection of economics and politics, but that's about the extent of it. 

Thanks for your thoughts.  You might want to listen to this week's EconTalk podcast, loosely about having productive discourse online -
https://www.econtalk.org/venkatesh-rao-on-waldenponding/

It's worth remembering how the Republican candidate field was last year, Trump was not remotely expected to take the nomination. It's possible that a current lesser known Democrat will win the nomination.

EscapeVelocity2020

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #25 on: November 06, 2019, 08:24:39 AM »
It's worth remembering how the Republican candidate field was last year, Trump was not remotely expected to take the nomination. It's possible that a current lesser known Democrat will win the nomination.

Good point @ender !

@maizeman I didn't do the podcast justice with my comment but I was running off to a meeting, here is the synopsis, with emphasis on what part I thought really was fascinating
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Writer and management consultant Venkatesh Rao talks about Waldenponding with EconTalk host Russ Roberts. Rao coined the term Waldenponding to describe various levels of retreating from technology akin to how Thoreau extolled the virtues of retreating from social contact and leading a quieter life at Walden Pond. Rao argues that the value of Waldenponding is overrated and that extreme Waldenponding is even somewhat immoral. Rao sees online intellectual life as a form of supercomputer, an intellectual ecosystem that produces new knowledge and intellectual discourse. He encourages all of us to contribute to that intellectual ecosystem even when it can mean losing credit for some of our ideas and potentially some of our uniqueness.
« Last Edit: November 06, 2019, 08:28:12 AM by EscapeVelocity2020 »

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #26 on: November 08, 2019, 09:56:10 PM »
I'd like to point out that Warren uses the most pessimistic major estimate for the cost of M4A, that produced by the Urban Institute, whereas Sanders uses the most optimistic estimate. https://www.nytimes.com/interactive/2019/04/10/upshot/medicare-for-all-bernie-sanders-cost-estimates.html

It's possible that M4A will cost much less. We just don't know.

I'm not a fan of the "public option". As far as I understand, single payer is part of the payment plan, not the expenditure plan. Theoretically, it seems that we could decouple it from "For All" and institute single payer WITHOUT expanding healthcare, thus saving money for everybody who already has healthcare. Sanders and Warren would immediately spend the savings on healthcare for those who don't have it. Anyway, somehow people hiss at single payer as if it were costing them money, not saving it.  What they're losing is choice, and I guess Americans don't like that, even if their single option is much better than all the previous choices.
https://www.thenation.com/article/insurance-health-care-medicare/
« Last Edit: November 08, 2019, 10:19:52 PM by Poundwise »

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #27 on: November 08, 2019, 10:03:03 PM »
That said, I agree that some of Warren's revenue streams may be difficult to collect, such as the military cuts and the wealth tax. Not sure if they will be entirely needed. The biggest issue I see in her plan is that employers who already provide HC will still be paying into the fund, yet HC is no longer part of their incentive package to workers since now everyone will have it.  Maybe all employers should have access to something like what she offers labor, whereby the worker is allowed to pocket the difference between the costs of the union-negotiated employer payment for their old plan, and the average national cost of a plan.

Another thought is that the middle class doesn't have to be bribed quite as much. We just did open enrollment-- clever of her to release the plan in Nov, BTW-- and it seems like we will be paying roughly $6K out of pocket for healthcare a year (including money in a health FSA).  My husband said UHC raised our premiums 24% this year, because they can. Under M4A, it seems we'd save that $6K (so $60K over ten years!)  I wouldn't mind paying the same, for  healthcare that was available all the time regardless of employment status, and for everyone. Or I'd be happy with only $1K savings a year... people have changed plans for less.

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #28 on: November 08, 2019, 10:25:02 PM »
I'd like to point out that Warren uses the most pessimistic major estimate for the cost of M4A, that produced by the Urban Institute, whereas Sanders uses the most optimistic estimate. https://www.nytimes.com/interactive/2019/04/10/upshot/medicare-for-all-bernie-sanders-cost-estimates.html

This isn't quite correct. Warren starts with the Urban Institute's estimate of $34 trillion over ten years, but then she reduces that estimate substantially by using more favorable assumptions than the Urban Institute about what the cost of prescription drugs, reimbursement rates, and administrative costs will be as well as a lower rate of growth for medical spending going into the future than the one from the Urban institute model.

Those changes in assumptions are a big part of how she gets the price tag of her M4H plan down from $34 trillion over ten years to the $20.5 trillion over 10 years that her proposed tax plan is intended to raise.

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #29 on: November 09, 2019, 08:20:21 AM »
Okay, but if you look at the analysis (to see a discussion of how her usage of 110% of Medicare reimbursement rather than 115% as used by the Urban Institute would still be profitable to doctors and hospitals, and might even benefit rural hospitals, see pages 12-14 of this white paper) these assumptions aren't just based on hand-waving. Unlike criticisms that the changes would be politically difficult and too disruptive.

At any rate, we now are talking about how it could be done and she brings up some interesting revenue streams to the public's attention,  like the Overseas Contingency Operations fund (OCO). I'd consider her awareness of waste in government an attractive old-school conservative trait, but her direction of savings towards social programs that help the poor a progressive trait.

Some links just so everyone is talking about the actual plan and not a journalist's description of it:

https://medium.com/@teamwarren/ending-the-stranglehold-of-health-care-costs-on-american-families-bf8286b13086

And the white paper: https://assets.ctfassets.net/4ubxbgy9463z/2Tg9oB55ICu2vtYBaKKcVr/d124e0eeb128ad3a8d8ab8a6ccae44c0/20191031_Medicare_for_All_Cost_Letter___Appendices_FINAL.pdf

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #30 on: November 09, 2019, 09:38:41 AM »
Okay, but if you look at the analysis (to see a discussion of how her usage of 110% of Medicare reimbursement rather than 115% as used by the Urban Institute would still be profitable to doctors and hospitals, and might even benefit rural hospitals, see pages 12-14 of this white paper) these assumptions aren't just based on hand-waving. Unlike criticisms that the changes would be politically difficult and too disruptive.

I mean we can certainly have a discussion about what is or isn't an accurate model for how much a no-private-option-medicare-for-all system (the flavor of M4H both Warren and Sanders are advocating for) will cost. And to be clear I'm not arguing that the Urban Institute model is necessarily the best or most accurate model.

I just don't think you can fairly say that Warren is using the most pessimistic model for how much no private option medicare for all system would cost if she started with the most pessimistic model but then changed a lot of the assumptions of that model to be more optimistic.

Medicare reimbursement rates is one place the two diverge, but the Warren campaign also projects administrative costs will be 62% lower than the Urban Institute model assumed and prescription drugs will cost only 1/2 as much as the Urban Institute model assumes.

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #31 on: November 09, 2019, 09:46:34 AM »
Warren addresses the most pessimistic major estimate for the cost of M4A, that produced by the Urban Institute, whereas Sanders uses the most optimistic estimate.

Okay, how does this edit of my wording work for you?

P.S. I should also acknowledge that Sanders didn't address the UI estimate because it of course didn't exist before he introduced his bill.  I'm not up to date on whether he has since discussed it.
« Last Edit: November 09, 2019, 09:49:14 AM by Poundwise »

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #32 on: November 09, 2019, 10:00:02 AM »
Warren addresses the most pessimistic major estimate for the cost of M4A, that produced by the Urban Institute, whereas Sanders uses the most optimistic estimate.

Okay, how does this edit of my wording work for you?

Honestly, I still think it's kind of misleading. It's completely fair to say that Warren's estimate of the cost of a no-private-option medicare for all plan is substantially higher than Sander's.

The best I could find is that Sanders thinks we'd need $14 trillion in new tax revenue over ten years for the plan.
Warren thinks we'd need $20.5 trillion in new tax revenue over ten years for the plan.
The Urban Institute thinks we'd need $34 trillion in new tax revenue over ten years.

Warren starts with a pessimistic estimate of the cost of medicare for all and lays out where her assumptions diverge from that estimate which is why she's much more optimistic about what the total cost of the plan would be. But in the end, the Warren and Sanders estimates are more similar to each other than either is the the Urban Institute's.

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #33 on: November 09, 2019, 11:15:23 AM »
Medicare reimbursement rates is one place the two diverge, but the Warren campaign also projects administrative costs will be 62% lower than the Urban Institute model assumed and prescription drugs will cost only 1/2 as much as the Urban Institute model assumes.
Administrative costs: Appendix A on p.21 of the white paper addresses 5 major criticisms.  Two key figures to remember are:
  • latest figures for Medicare administrative costs are 2.3%
  • latest figures for Medicare ADVANTAGE administrative costs (administered by private insurance companies such as Aetna) are 13.7%
"The Urban Institute justifies its assumption of 6% administrative costs by stating: “We base our administrative cost estimates on Medicare’s costs to administer the entire Medicare program.” Because roughly one third of Medicare beneficiaries are enrolled in private MA plans, in 2017 the weighted average of administrative costs over the entire Medicare program was about 6%. But Medicare for All beneficiaries would all be enrolled in a public plan with restrictions on administrative expenses, so a figure based on having a third of beneficiaries in a private insurance alternative whose administrative expenses are not currently restricted is not relevant. "

For a discussion of how they achieved the prescription drug estimate, see pages 7-9. I don't think I could summarize it better than it's said there, but one feature that I find very interesting, but that needs elaboration, is how M4A would incentivize research into cures rather than treatments. 

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #34 on: November 09, 2019, 11:43:58 AM »
I don't necessarily disagree with any of the reasoning.*

I'm just saying regardless of whether her campaign's estimate is accurate or not, her assumptions are clearly not pessimistic reasoning compared to other estimates floating around (like the one put out by the Urban Institute).

*On the cost side. The reasoning on projecting tax revenue side I strongly disagree with, which I think is probably making me come across as a lot more critical of Warren that I otherwise would be. In my mind her "brand" was confident, competent, and pragmatic, and while she's not the candidate I'm backing right now, she was previously definitely my favorite of the current "big three" in the race.

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #35 on: November 09, 2019, 12:23:11 PM »
As far as I understand, she uses the UI estimate for increase in utilization of HC, though.

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Because Urban does not provide estimates for utilization increases –neither overall nor for different populations –it is difficult to conduct a proper evaluation of the utilization predictions made by Urban’s model. There is recent peer-reviewed literature on the effects of covering the uninsured and on the impact of health insurance deductibles that would be useful to compare against the predictions made by Urban’s microsimulation model. While we cannot conduct a thorough evaluation without further information from the Urban Institute, we note that the utilization predictions implied by the Urban estimate fall at the high end of the published literature. As such, we consider the estimate provided in this letter –which implicitly relies on the utilization predictions made by Urban –to represent an upper bound on projected NHE under Medicare for All. In terms of sensitivity to thesepredictions, NHE over 2020-2029 would decrease by approximately $1 trillion for each 2 percentage points that actual utilization levels turn out to be below the levels predicted by Urban

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #36 on: November 09, 2019, 12:38:41 PM »
The reasoning on projecting tax revenue side I strongly disagree with,

Do you disagree with the details of the projections (i.e. the wealth tax or some other aspect), or with the fact that she did the projection at all (it being political suicide given the number of special interest groups who are now arrayed against her)?

I still support and respect her because I agree with her major focus, which will be to do everything in her power to clean up corruption,  and reverse the creep of income inequality that's translating to inequality of democratic access (then probably lock the door behind her by limiting the power of the executive).

As for the rest, it's up to the American people whether and how we want to spend our money and political access.  If, now understanding what it would take, we still prioritize M4A, she'll make it happen.  Or we may choose to work on climate change first. Or justice. Or immigration. Frankly, if the middle class clamors for M4A with a tax hike, I'm sure she'd be happy to oblige.

[edit]I don't know whether what I just wrote was clear.  What I mean is, Warren aims to give regular, non-ultrarich voters more power in government.  Then, if we want something and if the goal is ethical, she'll help us implement it. But we shouldn't expect her to be a leader on the climate, health, peace, justice, gun control, etc.  That has turned off a number of single issue voters, who'd like her to be at the forefront for their issue.  But she's the fix-democracy-and-capitalism candidate.  All else follows after that.
« Last Edit: November 09, 2019, 12:49:11 PM by Poundwise »

maizefolk

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #37 on: November 09, 2019, 01:56:57 PM »
The reasoning on projecting tax revenue side I strongly disagree with,

Do you disagree with the details of the projections (i.e. the wealth tax or some other aspect), or with the fact that she did the projection at all (it being political suicide given the number of special interest groups who are now arrayed against her)?

Way more detail that you probably were expecting than wanting below. Sorry about that.

I disagree with putting out projections that are clearly incorrect -- the wealth tax is the one I've dug the furtherest into -- because it was politically expedient and I disagree with the healthcare head tax because it put avoiding having to compromise on a campaign promise above protecting vulnerable americans.

For the wealth tax specifically my broad concern before was that the amount of revenue projected seemed unreasonable looking at other countries that have tried a wealth tax and adjusting for our GDP, but that seemed like something where it could simply be different people approaching the same data in different ways and coming to different conclusions. I can think an answer is wrong without thinking the people who came up with that answer did anything wrong or sloppy.

With the plan to pay for Medicare for All without a private option however, the campaign just took the amount of revenue which would be raised by the original wealth tax, doubled the percentage, and assumed this would double revenue from the wealth tax on billionaires. But while higher percentage taxes generally do raise more revenue, they don't do so on a one to one basis. In this case the 6% per year tax on billionaires (effectively 9.5% given the interactions with capital gains and changes to the capital gains tax rate) is likely to drive more hiding of assets through either loopholes or fraud, more people to relocate out of the USA, and more people to accelerate charitable giving than than the original 3% per year tax. Even if none of those things happened, because this is a tax on wealth rather than income harvesting 9.5% of personal wealth over $1B per year in taxes means that the amount of personal wealth over $1B in the USA will either decline faster or grow more slowly than if the government only harvests 3% of that wealth per year. So a higher percentage means collecting a bigger slice of a smaller pie over time.

On a policy level, I disagree with her plan for "head tax" on companies hiring employees.* For each new employee, companies would have to pay $9,500 to the government. I work for a fairly good employer (big public university) and they contribute about $4,560/year towards the cost of my health insurance, so this would cost then about 2x as much, but it's certainly absorbable. For people working lower paying jobs with the potential to be automated or outsourced, a group of people who often lack access to quality healthcare, the exact people who we should be trying to help with healthcare reform, a $9,500 head tax is going to accelerate automation and outsourcing of work. So they may gain health insurance at the same time they lose a job.

I think both the sloppy projections about revenue and making tax decisions that hurt some of the most vulnerable americans are both being driven by Warren having backed herself into a corner by promising medicare for all without a private option without any new taxes on the bottom 99% of society or having anyone pay any premiums without having done the math in advance on what it was going to take to deliver on that promise.

The willingness to propose policies that in some cases won't work and in other cases would hurt the people I worry about the most (those with limited financial resources working low paying jobs) rather than adjust a campaign promise (as well as the willingness to make campaign promises without first doing the math to make sure they can be delivered upon) is what is making me reevaluate my opinion of Warren as a potential president. But the sad thing is that, if we limit ourselves to people polling in the top three nationally, I'm still not sure who, if anyone, I'd prefer. ... maybe Biden? I don't know. Is just generally discouraging.

*It's import to distinguish this from the transition "maintenance of effort" tax which would be at different levels for different companies.

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #38 on: November 09, 2019, 02:47:56 PM »
@maizeman I'm running out the door for my weekend plans, but I've read that PPP article and here's a discussion of the "head tax" and why it is not necessarily regressive. Warren will close the loophole that allows employers to avoid paying benefits by misclassifying employees as independent contractors.

As for employers automating jobs or outsourcing them, she did address this back in June.  https://medium.com/@teamwarren/a-plan-for-economic-patriotism-13b879f4cfc7

Will discuss the wealth tax when I get back.

P.S.
Quote
Warren having backed herself into a corner by promising medicare for all without a private option without any new taxes on the bottom 99% of society or having anyone pay any premiums without having done the math in advance on what it was going to take to deliver on that promise.
Warren famously would not say whether there would be new taxes or not, so she didn't back herself into a corner.


« Last Edit: November 09, 2019, 02:56:46 PM by Poundwise »

Poundwise

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Re: How do Senators Warren and Sanders Define "Middle Class"?
« Reply #39 on: November 10, 2019, 10:07:44 PM »
K, I'm back!  To clarify a bit more on the "head tax", it doesn't seem to be any worse than what is already happening with employer paid healthcare premiums. All that happens is that employers pay into a government fund rather than a private insurance plan, at a slight savings. If an employer was going to get rid of low wage jobs because of the cost of providing healthcare, it would have done so already with the ACA, no?

If I understand it correctly, the clever bit of judo happens where Warren leaves a loophole for employers: you have to contribute to the national healthcare fund, unless you let your employees unionize. Then you are allowed to pay them the money you were using for healthcare directly as wages or other benefits, and let them be taxed on that, transforming HC from a head tax to a payroll tax. The unionized employees should be happy to get more discretionary income, plus good healthcare that is available to them regardless of employment status.

As for the billionaire tax, okay, though it may generate some money, I agree that it's likely the posh people will find ways to evade payment pretty quickly.  Though there are differences between escaping taxes in the US and Europe, and Warren is going to be expanding and redirecting IRS enforcement (perhaps by retraining some out of work healthcare bureaucrats.)

On the other hand, costs may be way overestimated as well as revenue.  The greatest reason for high costs in the US system, I have read multiple times, is not administrative waste (though that is sizeable), but is mostly due to our opaque billing process which  promotes upcoding and overbilling. Hopefully single payer would put an end to some of the garbage billing.  After all, were we to reduce our rates to Canada levels, the US could pay for universal healthcare coverage with today's budget!
« Last Edit: November 11, 2019, 07:16:19 AM by Poundwise »