Cutting Taxes For The Rich Never Ends Well
You can call it 9-9-9, the Perry two-step, or a national sales tax. But the various flat tax plans being proposed by Republican candidates, right-wing think tanks, and media commentators share some common characteristics that should worry most middle-class Americans.
The basic notion behind a flat tax is to eliminate the current system of six tax brackets—in which people with higher incomes pay higher tax rates—with a single uniform rate. Most flat tax proposals also eliminate most or all of the deductions and credits in the current code—such as the mortgage interest deduction, the deduction for charitable giving, and hundreds of lesser-used preferences.
The flat tax is certainly a good deal for high-income individuals. Although they might not get to deduct mortgage interest payments on their vacation homes, those with high incomes more than make up for it in the lower, “flatter” rate. For example, under a 20 percent flat tax (similar to the one proposed by Rick Perry), the top 1 percent would see an average tax cut of over $200,000.
If the rich are paying less, you can probably guess who would pay more: low- and moderate-income families. For example, under the Cain 9-9-9 plan, 90 percent of filers with incomes between $40,000 and $50,000 would see a tax increase averaging about $4,000. (The Perry plan gives taxpayers an option of staying in the current system—so it’s unlikely anyone would choose the flat tax option if it means higher taxes. Since low- and moderate-income taxpayers would see an increase under the 20 percent plan, the final result of the Perry plan would be the introduction of an exclusive tax code designed for the high-income individuals, while the rest of us get to keep the old clunker. See who would choose which plan.)
Because flat tax proposals lower rates at the top, and because the top is where an increasing share of income is being concentrated, they also tend to bring in significantly less revenue than the current tax code, resulting in higher deficits, fewer public investments, and pressure to cut programs like Social Security and Medicare.
Proponents of the flat tax argue that lower rates on the rich (or the “job-creators” as some are now calling them) and on income derived from stocks and bonds will boost economic growth and job creation. However, this trickle-down theory has been tried and failed: Bush-era policies moved the tax code in this direction, but the “boom” of the 2000s was the worst on record since at least the 1950s.
Tax cuts for the rich and a higher debt for everyone else? We’ve seen that movie before, and it doesn’t end well.
By: John Irons, Research and Policy Director, Economic Policy Institute; Published in U. S. News and World Report, November 1, 2011
New Study: Raising Medicare Eligibility Age Erodes Social Security Benefits
A proposal to increase the Medicare eligibility age, which the Super Committee is considering, would drive up health care costs to the point where they would consume almost half of the Social Security check of a middle-class retiree, according to a new analysis by Social Security Works.
In his testimony before the Super Committee yesterday, Erskine Bowles, a Morgan Stanley executive and co-chair of the President’s Fiscal Commission, recommended raising the Medicare eligibility age to 67 as a way to bridge the differences between Democrats and Republicans on the Super Committee.
Bowles explained his support for the policy on the grounds that the Affordable Care Act (ACA) made “other coverage available” to 65- and 66-year-olds, by providing subsidies to purchase health care in the private sector.
Bowles’ testimony in favor of raising the age comes on the heels of public endorsements by the American Hospital Association, the leading trade association for the nation’s for-profit hospitals, and the Healthcare Leadership Consortium, a consortium of health insurance companies, pharmaceutical companies, and other medical providers.
The Center on Budget & Policy Priorities, a center-left think tank, criticized Bowles’ compromise for being “to the right of Boehner’s offer to Obama in July.” They dismissed, in particular, Bowles’ reliance on the ACA to justify raising the Medicare eligibility age. Robert Greenstein, the Center’s President, wrote that without assurance that ACA will withstand overwhelming Republican political and legal opposition, Bowles’ proposal to raise the Medicare eligibility age “would risk leaving many 65- and 66-year-olds with no insurance at all at the very time of life when they are developing more medical conditions and problems due to their age.”
Even if ACA is successfully implemented, however, many experts believe raising the Medicare eligibility age would be poor policy. A study by the Kaiser Family Foundation found that raising the Medicare eligibility age to 67 would increase health care costs across the economy, saving the government little money. What money the government would save, the Kaiser study found, would come from shifting the costs of care onto patients — especially, but not only, individuals aged 65 and 66, who would no longer be eligible for Medicare.
A new analysis of the Kaiser study by Social Security Works shows that the increase in out-of-pocket costs for 3.3 million people aged 65 and 66 would take a large bite out of affected seniors’ already modest Social Security checks.
From Social Security Works’ analysis:
Of the 3.3 million people aged 65 and 66 who would pay more out-of-pocket for health care if they were no longer eligible for Medicare, the following two groups would be hit especially hard:
- Out-of-pocket health care costs would increase, on average, by $4,300 in 2014 for 960,000 people aged 65 and 66 who purchase coverage through a health insurance exchange and have incomes exceeding 400 percent of the federal poverty level ($43,560), making them ineligible for subsidies available to exchange participants with lower incomes.
- Under current law, these 65- and 66-year-old retirees’ average out-of-pocket costs would be $6,800 in 2014, out of a total Social Security benefit of $24,469. If forced out of Medicare and onto the health insurance exchanges, their average out-of-pocket health care costs would grow to $11,100, out of a total Social Security benefit of $24,469. [Figure 1] As a result, if the Medicare eligibility age is raised, out-of-pocket health care costs would go from consuming 28 percent to 45 percent of those 65- and 66-year-old retirees’ Social Security check.
Sources: Social Security Works analysis of estimates from Social Security Trustees, 2011, and Kaiser Family Foundation, 2011.
- Out-of-pocket costs would increase, on average, by $1,200 for 240,000 people aged 65 and 66 who purchase coverage through a health insurance exchange and have incomes between 300 and 400 percent of the federal poverty level ($32,670-$43,560). Under current law, these 65- and 66-year-old retirees’ average out-of-pocket costs would be $4,800 in 2014, out of a total Social Security benefit of $18,464. If forced out of Medicare and onto the health insurance exchanges, their average out-of-pocket health care costs would grow to $6,000, out of a total Social Security benefit of $18,464. As a result, if the Medicare eligibility age is raised, out-of-pocket health care costs would go from consuming 26 percent to 32 percent of those 65- and 66-year-old retirees’ Social Security check.
Costs to Social Security beneficiaries could be substantially higher than estimated here. The out-of-pocket costs discussed in Social Security Works’ analysis do not include the cost of medical services that are not covered by Medicare at all, including dental care and most kinds of long-term care, such as permanent residency in a nursing home. Accounting for these medical services would not have any bearing on the amount that out-of-pocket costs would increase if the Medicare eligibility were raised to 67. It would, however, show average out-of-pocket costs to be considerably larger under both current law and if the Medicare eligibility were raised to 67.
By: Daniel Marans, Policy Director, Social Security Works, Published in Huffington Post, November 4, 2011
Raising Arizona: Maybe The Wrong Arizonan Is Facing Impeachment
When Arizona’s Independent Redistricting Commission came up with a new map, Republicans were apoplectic. GOP officials wanted the post-Census congressional district lines to be drawn in Republicans’ favor, and when the tripartisan panel, created by voters, came up with more balanced lines, the party went into attack mode.
This week, that attack included impeachment proceedings against the commission’s independent chair, Colleen Coyle Mathis, ousted by Gov. Jan Brewer and state Senate Republicans. And on what grounds did GOP officials impeach this official? Republicans cited “gross misconduct” as a justification.
Alan Colmes talked to Brewer yesterday on his radio show, asking the far-right governor to explain the rationale for impeachment. The discussion didn’t go well.
COLMES: What did Colleen do that was inappropriate, Colleen Mathis?
BREWER: Well she acted, uh, inappropriately. Well it was very, pretty much obvious that she in communications, and doing things, uh, not in the public, and the people of Arizona deserve that —
COLMES: You mean she was doing things secretly? Like what?
BREWER: They just simply need to operate in a lawful and open fashion….
COLMES: I’m trying to understand what she did. What are you accusing her of having done?
BREWER: Well she wasn’t operating in the proper manner.
The audio of the exchange really needs to be heard to be fully appreciated; the partial transcript doesn’t capture just how incoherent the Republican governor really was.
And given the circumstances, this matters. Brewer, as part of an unprecedented power grab, just led an impeachment crusade against an independent government official who’s done nothing wrong. The governor agreed to do this interview to explain the rationale for her decision, and then couldn’t explain the rationale for her decision.
The problem, of course, is that Brewer couldn’t admit the truth out loud: the redistricting commission didn’t rig the game to favor Republicans, so Republicans are retaliating against the redistricting commission.
On a related note, Democratic Congressional Campaign Committee Chairman Steve Israel (D-N.Y.) argued yesterday, “I think Arizonans should consider impeaching Jan Brewer.”
He has a point. If anyone’s guilty of “gross misconduct” in the Grand Canyon State, it would appear to be its governor.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, November 5, 2011
Mitt Romney And The Challenge Of Making Ridiculous Numbers Add Up
Mitt Romney has an interesting budget challenge. He wants to eliminate a large deficit entirely, but he also wants to increase defense spending and cut taxes on the wealthy by trillions of dollars. It’s the sort of plan that would make balancing the budget sort of tricky, in much the same way putting out a fire with lighter fluid would be difficult.
But don’t worry, the former Massachusetts governor’s platform now includes a spending-cut plan. In the latest in a voluminous series of op-eds, which previewed a speech he delivered this afternoon, Romney explained:
The federal government should stop doing things we don’t need or can’t afford. For example:
* Repeal ObamaCare, which would save $95 billion in 2016.
* Eliminate subsidies for the unprofitable Amtrak, saving $1.6 billion a year.
* Enact deep reductions in the subsidies for the National Endowment for the Arts, the National Endowment for the Humanities, the Corporation for Public Broadcasting and the Legal Services Corporation.
* Eliminate Title X family planning programs benefiting abortion groups like Planned Parenthood.
* End foreign aid to countries that oppose America’s interests.
That’s not the totality of the plan — Romney also has some thoughts on entitlements that we’ll get to later — but in terms of discretionary spending, this is the gist of his spending-cut agenda.
There are a few key takeaways to keep in mind. The first is that repealing the entirely of the Affordable Care Act would make the deficit much worse, not better. Romney has this precisely backwards, and the fact that he doesn’t understand this is disconcerting.
Second, if Romney thinks he can take a $1.3 trillion deficit, increase spending on the Pentagon, cut taxes on the wealthy, and pay balance the budget by going after foreign aid and the Corporation for Public Broadcasting, he’s an even bigger fool than I’d feared.
And third, Planned Parenthood? Seriously? Mitt Romney thinks he can bring the budget closer to balance by increasing military spending, while blocking working-class and low-income women from accessing contraception, family planning services, pap smears, cancer screenings, and tests for sexually-transmitted diseases?
That’s just sad.
For nearly a half-century, Republican support for Planned Parenthood was the norm. Barry Goldwater and George H.W. Bush championed the health organization, and it wasn’t deemed the least bit controversial.
And yet, now we have Mitt Romney — ostensibly one of the sane GOP presidential candidates — vowing to eliminate funding for this preventive health care for women altogether.
Romney was far less offensive when he was a moderate attending Planned Parenthood fundraisers. This latest incarnation appears to have a real problem with women’s rights and interests.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, November 4, 2011
Will The GOP Field Ignore Another Pastor Who Says God Sent Hitler To ‘Hunt’ Jews?
Has the GOP primary gone off the rails before the first vote has even been cast?
In 2008, Sen. John McCain rejected the endorsement of John Hagee, a far-right pastor who had called the Catholic Church the “Great Whore” and said that Hitler was sent by God to be a “hunter” of Jews who had not yet moved to the land that would become Israel. McCain wasn’t exactly running as a moderate – look who he chose to be his vice president – but he knew, at least this time, that a line had been crossed.
Today’s GOP presidential candidates seem to have no such scruples.
Compare Hagee’s statements to this passage from a 2004 sermon by Mike Bickle, megachurch pastor, big-time evangelical, and star speaker at Rick Perry‘s August prayer rally-cum-campaign launch. In a video found by Brian Wilson of Talk to Action, Bickle prophesies that in the End Times 2/3 of all Jews “will die in the rage of Satan and in the judgments of God.” He goes on to discuss a disturbing and ultimately dangerous theory of the Holocaust even more outrageous than that pushed by Hagee:
The Lord says, “I’m going to offer two strategies to Israel, to these 20 million.” He says, “First, I am going to offer them grace, I am going to send the fisherman.” Do you know how a fisherman lures? I mean do you know how a fisherman does their thing? They have the bait in front, luring the fish. It’s a picture of grace. … And he says, “And if they don’t respond to grace, I’m going to raise up the hunters.” And the most famous hunter in recent history is a man named Adolf Hitler. He drove them from the hiding places, he drove them out of the land.
Mike Bickle is not just any radical pastor preaching End Times scripture. He was a key organizer of Perry’s The Response rally this summer, lending a number of staff members of his International House of Prayer (yes, IHOP) to the event and emceeing the proceedings himself.
Bickle has a history of outrageous claims. In the lead-up to The Response , for instance, People For the American Way’s Right Wing Watch reported Bickle’s theory that Oprah Winfrey is the precursor to the Antichrist. Asked about the extremism of Bickle and other The Response leaders before the rally, Gov. Perry said, “I appreciate anyone who’s going to endorse me, whether it’s on The Response, or whether it’s on a potential run for the presidency of the United States. Just because you endorse me doesn’t mean I endorse everything that you say or do.” That’s true. But Perry did more than accept Bickle’s help: he trotted him out to promote the event that served as a de facto launch of his presidential campaign.
Asked about Bickle’s more recently uncovered anti-Semitic rant, a Perry spokesperson performed a similar dodge:
Gov. Perry initiated the Response event for the sole purpose of bringing our nation together for the common cause of praying about the challenges confronting us. Those participating did so because of that common cause, and the issue you refer to has nothing to do with the goal and purpose of that event.
Only in today’s GOP does “bringing our nation together” entail hosting an event for the nation’s most vitriolic opponents of pluralism.
We need not even go as far as Bickle to see how much the GOP has changed in just a few years. Invited to speak alongside the controversial pastor at Perry’s marquee event was Hagee himself.
Neither Bickle nor Hagee has officially endorsed Perry. In fact, it’s the other way around: by placing them on the stage at a nationally televised event, you could say that Perry endorsed Bickle and Hagee. While McCain rejected the endorsement of someone who demonized people of other faiths, Perry is actively working to throw such people into the spotlight.
As Perry has embraced and promoted these proponents of religious prejudice, his fellow candidates have stood by in silence. Even when Perry endorser Robert Jeffress repeatedly called Mitt Romney‘s Mormon religion a “cult” and called Catholicism a “counterfeit religion” created by “Satan,” only one candidate (Jon Huntsman, a Mormon himself) challenged him directly — and Perry kept the endorsement. Even Mitt Romney, who tries to come across as the most reasonable of the bunch, has accepted the endorsement of prominent anti-Muslim advocate Jay Sekulow.
These candidates, of course, are entitled to their personal religious beliefs. But they are running to be the president of all Americans. If they stand by silently while people like Bickle, Hagee and Jeffress peddle bigotry against non-Christian religions, and even against other types of Christians, they’re giving us a hint of how they would approach their presidencies. It’s a frightening vision, and one that the American people are smart enough to see before they go to the polls.
Whatever our differences we should all, at least, be able to agree that Hitler was not sent by God to convert Jews to Christianity; that Catholicism, Mormonism and Islam like all religions are protected by the Constitution; and that Oprah Winfrey is not the Antichrist. Will Perry or any of his fellow candidates stand up and contradict Bickle, Hagee and Jeffress? Can’t we at least start there?
By: Michael B. Keegan, President, People For The American Way, Published in The Huffington Post, November 4, 2011
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