Of course you're mistaken. Student loan borrowers are held to the same standard as any other party to any other contract. You enter into a contract and agree to repay money you borrow according to the terms of the contract. You get the money, you spend the money. You can't then say, "HEY...I don't think I should have to repay this money!…
Of course you're mistaken. Student loan borrowers are held to the same standard as any other party to any other contract. You enter into a contract and agree to repay money you borrow according to the terms of the contract. You get the money, you spend the money. You can't then say, "HEY...I don't think I should have to repay this money!!!"
Grow up and start honoring the contracts you make.
No one is welching on their Medicare contract. The deal was made, people pay into it all their lives. When they're of age to start using it, PER THE TERMS OF THE CONTRACT, they start using it. No one is trying to get out of paying for the medical care of those receiving medicare.
If you want to lobby to prevent smokers or others with lifestyle choices you don't like or think are expensive, that's fine. But do it BEFORE they enter into the contract, not when the bill comes due!
No, student borrowers are held to a much higher standard than a business borrower, a consumer borrower, or even someone who goes casino gambling with tax money they should have paid the IRS. (Wait more than three years, declare bankruptcy, and tax debt gone.) They are all saying, "HEY...I don't think I should have to repay this money!!!"
These are the people who aren't "grown up" and not honoring the contracts they make. But you have no problem with those.
I happen to believe that Medicare should be available to ALL. And vices should be properly taxed. But you people seem to have a problem of trying to segment one group of taxpayers and tax money, and saying, sorry, you can't benefit from your money. As someone who hailed from Somerset County, New Jersey, (one of the highest wage AGIs in America) whose family spent decades subsidizing the Somerset County, Pennsylvanias and Somerset County, Kentuckys, I find what you're saying particularly offensive. I should be able to have my tax money go for the things I want it spent on.
There is right and wrong in what you say. Yes, the non student borrowers you mention get to wriggle out of their debts in bankruptcy, while student borrowers don’t. Then again, the non student borrowers and to have their loans under written whereas student borrowers don’t. All they have to Donis sign up for classes to get loans they aren’t otherwise qualified for at heavily subsidized rates which are deferred for 4 years without interest accrual and get further deferred without accrual during a pandemic.
But you are correct about uneven treatment of taxpayers. That’s what happens when you use the tax system for anything other than it was theoretically intended for in the first place - raising money -and not for social policy.
Surtaxes and subsidies for favored or dis favored activities create all of these anomalies you write of and are a product of the central government painting outside of its lines.
The central government has no business being involved in one size fits all, command and control social welfare policies. The states are well equipped to care for their own people, and being closer to them, can tailor policies to fit the needs and attitudes of their citizens.
Just like one state can have capital punishment where another does not, they can have or not have a rich social service framework.
Again, the difference between ordinary borrowers and student loan borrowers is that the product price is jacked up because of the easy qualification loans. (Kind of like how the first housing bubble of the 2000s was caused by easy lending where the payback wasn't really being considered, just the fact that "real estate always goes up!")
I am all for individual states being able to get their federal money back. New Jersey never does. Under your scheme, we could have a New Jersey Sovereign Wealth Fund that lends its excess tax dollars to Kentucky, and all the people in Kentucky sign loan notes for whatever federal assistance they get. And no discharge in bankruptcy. New York is in a similar situation with being a net maker, and Governor Cuomo pointed out the New York bails out other states year after year.
The government's main purpose is to move the money around, under the "promote the General Welfare" phrase of the pre-amble. The progressive tax code is the traditional way this has been done.
For the people who cry about the progressive tax code, it's the only one that works. Most people who say "flat tax" really mean single-rate rate, like Pennsylvania. But Pennsylvania exempts so much in poverty income, and then they exempt seniors' pensions, etc. The problem with single rate systems is they end up taxing all different sorts of things, and tax at the state and county level, etc. You end up filling out five forms where one would do.
If people who go to college should have to pay "more", then there should be a couple percent surtax for x number of years. Current federal tax rates are lower (10%, 12%, 22%) than one similar value income in the 1970s, when college was still mostly free. So the college borrowers pay 70s rates for x years, and that is that. Fair is fair. They pay what the Baby Boom generation paid for part of their careers.
Look at the colleges today. It’s really the same thing going on - cost shifting. Needs based scholarships are all that are available at top schools and are generally available at good schools.
What does that tell you? That tuition is not just bloated because of greed by the universities, but also by cost shifting to cover the costs of those need based scholarships.
So look at that - in health care, in education I am getting soaked by hidden taxes to support less financially able people.
And then go to my tax return....
You are so enamored by the graduated tax rates and there is all this jibber jabber about the wealthy paying their “fair share”.
But I ask you this? In what world is there a system based upon people paying their ”fair share” that results in almost half the people paying ZERO or less?
That’s a fact - almost half the people who file Federal income tax returns have a zero or negative tax. The negative tax comes from refundable credits such as the “earned income tax credit” and now, refundable child care tax credits.
And to be clear - I have never gotten a “tax cut” for the wealthy, although I am no doubt defined as such.
I say that because every time - from Reagan forward - that my tax rate was reduced, they took away something else that actually raised my tax bill. Reagan took away many deductions, and imposed the “passive loss rules” that deny me the ability to claim actual cash losses. Trump took away my SALT deductions. So as they reduce rates they redefine taxable income upwards. When I had children, I was denied an exemption for my children so as to increase my taxable income so that I paid more taxes to help support support someone else’s children.
It’s as simple as this 40% of $100 is $40. 25% of $180 is $45.
And through it all, with all this talk about tax cheats, and the carried interest, the most often abused provision in the Federal income tax code is the earned income tax credit.
And then you have people - such as Chris - with a zero or negative tax rate whine that OTHER people should pay more to subsidize them by discharging their loans, increasing their health subsidies “health care is a right!!!” and increasing their refundable credits.
Sorry. I pass. I’m already paying enough of your bills. Get some skin in the game.
If you are actually paying someone else's bills. If you lived your life in Central New Jersey, you were routinely facing 5-figure federal tax bills, most of the money being sent to states that get TWICE or more the federal money in, as what their state pays. You are right that the secret sauce of Reagan generation (Reagan and afterwards) tax cuts are to offer one break and take two others away from the middle class. And Trump's writers did exactly that with the SALT and the personal exemptions. But people liked his big mouth and the fact that he short-term scammed the IRS with keeping a partnership economic interest while writing off his share, and then asking the IRS for a $72 million refund. They don't figure out Trump's tax cheating had to be made up out of their own pockets. Maybe because, as you point out, most Trump voters pay zero in taxes and get back big Earned Income Tax Credits and Child Tax Credits. I think the most abused portions of the tax code, though, are the ones where the filer can manipulate the amount of basis, or can control when income is actually received for tax purposes. Real estate is the playground for this kind of thing.
I actually did raise my family in Central NJ. Western Monmouth County. And my tax bill was typically in the high 6 figures and occasionally 7 figures, all in.
And it’s funny that you talk about NJ. I am old enough to have lived in NJ before there was an income tax. Yes folks, it’s true. NJ used to be a red state before it was invaded in the North by fleeing New Yorkers and from the South fleeing Philadelphians. People who ran away from the effects of the welfare states they created only to recreate them all over again, ruining New Jersey’s state finances. Florida and Texas, get ready for ruin......
Yes I paid other people’s bills before I ran away to Florida - to New Jersey as with as the US.
NJ first imposed an income tax in 1976 as a funding gimmick to deal with a State Supreme Court ruling that forced the state to ensure that poorer counties had enough money to improve the quality of their school systems.
So they imposed a low rate GROSS income tax (with essentially no deductions) - and simultaneously created a homestead tax rebate computed to raise and payout the same amounts.
Naturally, individually, higher income earner got back less than they paid in under the capped rebate. Others got back more.
And just as naturally, the rebate disappeared over time as the tax rate skyrocketed to 9% and almost 11% now. The use of the income tax as a gimmick disappeared and it became a big revenue raiser to fund a ravenous nanny state that redistributes income. And now natives like me who loved NJ as it was run away from the broken system that former New Yorkers and Philadelphians imposed. NJ has a high rate of outbound immigration.
And I don’t agree that NJ and NY pay more to the US than they get back. Lots of money spent in other states is for national defense that benefits us all.
As far as Trump and other conservative candidate voters are concerned, look to places like Detroit, Milwaukee, Philadelphia, and Atlanta in swing states as well as Chicago, Boston, St. Louis and Los Angeles and you will see big nanny states that always go Blue, no matter how bad the candidate.
That's interesting. So you know how NJ people pay the higher federal rates, and then that money disappears into other states. And it's a joke to think that the money spent in other states "is to benefit us all". It's usually just a huge income transfer for no clear purpose. Just like what the critics of student loan reform cry about the money spent in that sector.
I remember when New Jersey adopted the state income tax, in July 1976, after Chief Justice Hughes' (former Governor Hughes') court closed the public schools until the Legislature came up with a fair funding formula. Governor Brendan Byrne (former Judge Byrne) signed the 2% income tax. It had nothing to do with New Yorkers and that. For years, people were getting priced out of their houses in old age because of the real estate tax. The income tax allowed there to be "homestead rebates" and other programs to make it easier for seniors to stay in their homes. More school funding was raised off income tax. Supposedly, Byrne was going to lose in 1977 (so-called OTB - One Term Byrne - a play on the acronym for Off Track Betting). But Byrne won in a landslide versus state senator Raymond Bateman --- of Somerset County!
So I know the story very well. Hardly nanny state. The New Jersey people realized that railroad fees, or tourists paying 5% sales tax at shore resorts, was not going to fund a contemporary state government. Local real estate tax was not going to do it, at least not fairly. Even Governor Cahill understood this, but he had to face Sandman in the primary in the 1973, with no plan except finance magic.
The schools were going to be closed because the Court essentially demanded income redistribution.
And while seniors getting priced out of their houses was an issue, it turned out to be a Trojan Horse for the welfare state. If NJ really wanted to help seniors, they wouldn’t have done it via a smallish rebate that went to EVERYONE. They would do what Florida does - it limits the assessed values to an increase of no more than 3% if you are domiciled there. Valuation increase is the bane of seniors far more than rate increases.
And I assure you that a GROSS income tax rate nor 9% or 11% isn’t needed to help seniors.
As for funding education “fairly” that fairly qualifier hints at “fair share” income and wealth redistribution which is not “fair”.
And contemporary state government does NOT have to be a nanny state redistribution scheme.
As a person whose profession has been the Federal Tax code for more than 40 years, I can professionally opine that it is completely broken.
In theory, a tax code should be one that focuses on its original intent - to raise money. In practice, it has been corrupted to affect behavior. In western civilizations, it has been used more for social policy than true economic policy, with income being restricted via “transfer payments”. The economy is greatly distorted by exploit taxes and hidden taxes.
Look at the so-called payroll tax. It’s called insurance, which is the I in FICA. That’s why so many people claim their Social Security and Medicare are “earned” benefits.
As a self employed person, I’ve paid in well more than $1 million in so-called Medicare premiums and it won’t be until next year that I will be eligible for benefits, which I will not take because I continue to work and my private health insurance provides far better coverage.
That’s $1 million in so-called insurance premiums for a deferred retirement benefit - paid far in advance - for a program that will not provide me any benefits for some time. I assure you that it would cost me far less to provide my ultimate retirement health insurance when I stop work. So the excess is quite a real tax.
Similarly, I assure you that my actual current plan costs much higher than it would cost me if norm for the cost shifting that Medicare (and Medicaid) causes - another hidden tax.
The health care industry is a great example of what happens in the overarching economy (including student loans which actually is a great example of how government money given freely can undermine the structure of an industry).
Reimbursements under Medicare and Medicaid cause huge hidden taxation by forcing participating providers to accept far less than is economically sound, causing the providers to shift their costs to other consumers of health care.
It costs me $25,000 a year for each married person I employ as my share of their benefit. When I started providing health coverage, it was less than one quarter of that. And that’s after increasing the share the employees pay via higher payroll deductions and higher co-pays.
As I’ve said elsewhere, joint surgery cost me $8,200 because I went out of network. That’s $10,000 less the Medicare reimbursement of $1,800. If I had stayed in network, the provider would have accepted $6,500 from my insurer. So look at that...there’s a clear additional tax of $4,700 at a minimum.
That’s why lots of people prefer catastrophic insurance coverage only - and negotiate fees for cash directly, which doctors are happy to do if they get paid upon performance and don’t have to deal with them ridiculous paperwork and delay required by Medicare and insurance companies.
Indeed, when I did my next joint, that’s what it did - I offered to pay the surgeon $6,500 in cash - what my insurer would have paid mid he were in network and he took the deal so fast, I was sure I could have done better.
How many times have you heard the cliche about people not wanting to earn more because it “puts them in a higher tax bracket?”
Spoken exactly like someone who was working out of a Koch Enterprises "free market" cubicle, targeting internet discussions like these. The fact is, that progressive tax rates have been accepted and defended since the end of World War II, 75 years now. Three generations. The various costs of social insurance benefits will always be debated, but one thing that doesn't get debated at the ballot box is whether we SHOULD have these benefits. The last politicians to attempt this was the late Barry Goldwater in 1964. The last Republican presidential candidate to go to landslide defeat! Even Reagan was too cowardly to go back to his 1960s rhetoric.
Most people earn whatever they can. They care clueless about marginal tax brackets. They think the marginal rate is their total rate, and so they think there's nothing they can do to control that. I know. I do people's taxes as a practitioner. If you say "35% rate", they think it's 35% on everything.
You trace the downfall of the Federal business accurately - FDR started the nanny state. The central government did very well for nigh over 150 years without needing to assess an income tax. It was only when income redistribution became necessary to fund it did graduated rates come into play. 30 years after FDR, LBJ turbocharged it. Indeed, we’ve spent more on the nanny state programs that LBJ gave birth to than the entirety of our national debt.
The Federal government is incapable of running a national nanny state - one size does not fit all. The Federal government should stick to its knitting and not draw outside the lines. Let the states decide matters about the social welfare of its residents.
And, as,to your name calling, I’m no Koch fellow. de Touqueville said that America will lose itself once the people realize that they can be bribed with their own money. In the US, they bribe people with other peoples money called taxes assessed under pain of imprisonment.
There is a difference between a social contract and a legal contract. Moreover, the student loan agreement is optional, whereas Medicaremis mandatory - you can’t opt out.
Medicare is a deal sorely in need of revising and revising NOW, not just prospectively.
Did you know that the first year that Medicare insurances assessments were made against payroll, the maximum ANNUAL tax was $27.10?
And most people drawing benefits now, paid in only on the social security wage limit for most of their working lives, while people now pay in based upon their entire earned income?
Look at this...a 25 year old professional athlete making $5 million a year - whose union contract already provides for lifetime health insurance - has $150,000 paid in on his behalf? That’s the “premium” on health insurance that he’s not eligible to use for 40 years.
Medicare and Medicaid have broken the healthcare system. I had joint surgery not long ago. I went out of network, so my insurer paid me the Medicare reimbursement rate for the code the work was done. The reimbursement was $1,800 against a surgeon’s bill of $10,000.
The only person willing to do that kind of work for $1,800 works in the meat department of your local supermarket. The guy who pays full list - and the in network insurance companies who pay more then a hidden tax on each procedure to cover the cost shifting.
The Medicare system needs substantial revision. They took the income cap off the paying in side after i entered the system. They can adjust the benefit side too.
You have a bunch of people in low income states (red states) who are paying wayy less into Medicare than they get out of it, and price gouging medical professionals who are charging wayy more than what the same procedures or advice, guidance, prescriptions, cost in other countries. My point is that people seem to get all bent out of shape about student loan tax dollars, and yet there is much more waste and moral hazard, and forced subsidies, in the Medicare system. This isn't whether it's "paid as agreed", it's where the system is set up to provide these overly generous subsidies to places and people who can't afford it, and then we are all supposed to get upset about things involving student loan reform. Don't even get me started about military waste.
Of course you're mistaken. Student loan borrowers are held to the same standard as any other party to any other contract. You enter into a contract and agree to repay money you borrow according to the terms of the contract. You get the money, you spend the money. You can't then say, "HEY...I don't think I should have to repay this money!!!"
Grow up and start honoring the contracts you make.
No one is welching on their Medicare contract. The deal was made, people pay into it all their lives. When they're of age to start using it, PER THE TERMS OF THE CONTRACT, they start using it. No one is trying to get out of paying for the medical care of those receiving medicare.
If you want to lobby to prevent smokers or others with lifestyle choices you don't like or think are expensive, that's fine. But do it BEFORE they enter into the contract, not when the bill comes due!
No, student borrowers are held to a much higher standard than a business borrower, a consumer borrower, or even someone who goes casino gambling with tax money they should have paid the IRS. (Wait more than three years, declare bankruptcy, and tax debt gone.) They are all saying, "HEY...I don't think I should have to repay this money!!!"
These are the people who aren't "grown up" and not honoring the contracts they make. But you have no problem with those.
I happen to believe that Medicare should be available to ALL. And vices should be properly taxed. But you people seem to have a problem of trying to segment one group of taxpayers and tax money, and saying, sorry, you can't benefit from your money. As someone who hailed from Somerset County, New Jersey, (one of the highest wage AGIs in America) whose family spent decades subsidizing the Somerset County, Pennsylvanias and Somerset County, Kentuckys, I find what you're saying particularly offensive. I should be able to have my tax money go for the things I want it spent on.
There is right and wrong in what you say. Yes, the non student borrowers you mention get to wriggle out of their debts in bankruptcy, while student borrowers don’t. Then again, the non student borrowers and to have their loans under written whereas student borrowers don’t. All they have to Donis sign up for classes to get loans they aren’t otherwise qualified for at heavily subsidized rates which are deferred for 4 years without interest accrual and get further deferred without accrual during a pandemic.
But you are correct about uneven treatment of taxpayers. That’s what happens when you use the tax system for anything other than it was theoretically intended for in the first place - raising money -and not for social policy.
Surtaxes and subsidies for favored or dis favored activities create all of these anomalies you write of and are a product of the central government painting outside of its lines.
The central government has no business being involved in one size fits all, command and control social welfare policies. The states are well equipped to care for their own people, and being closer to them, can tailor policies to fit the needs and attitudes of their citizens.
Just like one state can have capital punishment where another does not, they can have or not have a rich social service framework.
Again, the difference between ordinary borrowers and student loan borrowers is that the product price is jacked up because of the easy qualification loans. (Kind of like how the first housing bubble of the 2000s was caused by easy lending where the payback wasn't really being considered, just the fact that "real estate always goes up!")
I am all for individual states being able to get their federal money back. New Jersey never does. Under your scheme, we could have a New Jersey Sovereign Wealth Fund that lends its excess tax dollars to Kentucky, and all the people in Kentucky sign loan notes for whatever federal assistance they get. And no discharge in bankruptcy. New York is in a similar situation with being a net maker, and Governor Cuomo pointed out the New York bails out other states year after year.
The government's main purpose is to move the money around, under the "promote the General Welfare" phrase of the pre-amble. The progressive tax code is the traditional way this has been done.
For the people who cry about the progressive tax code, it's the only one that works. Most people who say "flat tax" really mean single-rate rate, like Pennsylvania. But Pennsylvania exempts so much in poverty income, and then they exempt seniors' pensions, etc. The problem with single rate systems is they end up taxing all different sorts of things, and tax at the state and county level, etc. You end up filling out five forms where one would do.
If people who go to college should have to pay "more", then there should be a couple percent surtax for x number of years. Current federal tax rates are lower (10%, 12%, 22%) than one similar value income in the 1970s, when college was still mostly free. So the college borrowers pay 70s rates for x years, and that is that. Fair is fair. They pay what the Baby Boom generation paid for part of their careers.
Continued....
Look at the colleges today. It’s really the same thing going on - cost shifting. Needs based scholarships are all that are available at top schools and are generally available at good schools.
What does that tell you? That tuition is not just bloated because of greed by the universities, but also by cost shifting to cover the costs of those need based scholarships.
So look at that - in health care, in education I am getting soaked by hidden taxes to support less financially able people.
And then go to my tax return....
You are so enamored by the graduated tax rates and there is all this jibber jabber about the wealthy paying their “fair share”.
But I ask you this? In what world is there a system based upon people paying their ”fair share” that results in almost half the people paying ZERO or less?
That’s a fact - almost half the people who file Federal income tax returns have a zero or negative tax. The negative tax comes from refundable credits such as the “earned income tax credit” and now, refundable child care tax credits.
And to be clear - I have never gotten a “tax cut” for the wealthy, although I am no doubt defined as such.
I say that because every time - from Reagan forward - that my tax rate was reduced, they took away something else that actually raised my tax bill. Reagan took away many deductions, and imposed the “passive loss rules” that deny me the ability to claim actual cash losses. Trump took away my SALT deductions. So as they reduce rates they redefine taxable income upwards. When I had children, I was denied an exemption for my children so as to increase my taxable income so that I paid more taxes to help support support someone else’s children.
It’s as simple as this 40% of $100 is $40. 25% of $180 is $45.
And through it all, with all this talk about tax cheats, and the carried interest, the most often abused provision in the Federal income tax code is the earned income tax credit.
And then you have people - such as Chris - with a zero or negative tax rate whine that OTHER people should pay more to subsidize them by discharging their loans, increasing their health subsidies “health care is a right!!!” and increasing their refundable credits.
Sorry. I pass. I’m already paying enough of your bills. Get some skin in the game.
If you are actually paying someone else's bills. If you lived your life in Central New Jersey, you were routinely facing 5-figure federal tax bills, most of the money being sent to states that get TWICE or more the federal money in, as what their state pays. You are right that the secret sauce of Reagan generation (Reagan and afterwards) tax cuts are to offer one break and take two others away from the middle class. And Trump's writers did exactly that with the SALT and the personal exemptions. But people liked his big mouth and the fact that he short-term scammed the IRS with keeping a partnership economic interest while writing off his share, and then asking the IRS for a $72 million refund. They don't figure out Trump's tax cheating had to be made up out of their own pockets. Maybe because, as you point out, most Trump voters pay zero in taxes and get back big Earned Income Tax Credits and Child Tax Credits. I think the most abused portions of the tax code, though, are the ones where the filer can manipulate the amount of basis, or can control when income is actually received for tax purposes. Real estate is the playground for this kind of thing.
I actually did raise my family in Central NJ. Western Monmouth County. And my tax bill was typically in the high 6 figures and occasionally 7 figures, all in.
And it’s funny that you talk about NJ. I am old enough to have lived in NJ before there was an income tax. Yes folks, it’s true. NJ used to be a red state before it was invaded in the North by fleeing New Yorkers and from the South fleeing Philadelphians. People who ran away from the effects of the welfare states they created only to recreate them all over again, ruining New Jersey’s state finances. Florida and Texas, get ready for ruin......
Yes I paid other people’s bills before I ran away to Florida - to New Jersey as with as the US.
NJ first imposed an income tax in 1976 as a funding gimmick to deal with a State Supreme Court ruling that forced the state to ensure that poorer counties had enough money to improve the quality of their school systems.
So they imposed a low rate GROSS income tax (with essentially no deductions) - and simultaneously created a homestead tax rebate computed to raise and payout the same amounts.
Naturally, individually, higher income earner got back less than they paid in under the capped rebate. Others got back more.
And just as naturally, the rebate disappeared over time as the tax rate skyrocketed to 9% and almost 11% now. The use of the income tax as a gimmick disappeared and it became a big revenue raiser to fund a ravenous nanny state that redistributes income. And now natives like me who loved NJ as it was run away from the broken system that former New Yorkers and Philadelphians imposed. NJ has a high rate of outbound immigration.
And I don’t agree that NJ and NY pay more to the US than they get back. Lots of money spent in other states is for national defense that benefits us all.
As far as Trump and other conservative candidate voters are concerned, look to places like Detroit, Milwaukee, Philadelphia, and Atlanta in swing states as well as Chicago, Boston, St. Louis and Los Angeles and you will see big nanny states that always go Blue, no matter how bad the candidate.
That's interesting. So you know how NJ people pay the higher federal rates, and then that money disappears into other states. And it's a joke to think that the money spent in other states "is to benefit us all". It's usually just a huge income transfer for no clear purpose. Just like what the critics of student loan reform cry about the money spent in that sector.
I remember when New Jersey adopted the state income tax, in July 1976, after Chief Justice Hughes' (former Governor Hughes') court closed the public schools until the Legislature came up with a fair funding formula. Governor Brendan Byrne (former Judge Byrne) signed the 2% income tax. It had nothing to do with New Yorkers and that. For years, people were getting priced out of their houses in old age because of the real estate tax. The income tax allowed there to be "homestead rebates" and other programs to make it easier for seniors to stay in their homes. More school funding was raised off income tax. Supposedly, Byrne was going to lose in 1977 (so-called OTB - One Term Byrne - a play on the acronym for Off Track Betting). But Byrne won in a landslide versus state senator Raymond Bateman --- of Somerset County!
So I know the story very well. Hardly nanny state. The New Jersey people realized that railroad fees, or tourists paying 5% sales tax at shore resorts, was not going to fund a contemporary state government. Local real estate tax was not going to do it, at least not fairly. Even Governor Cahill understood this, but he had to face Sandman in the primary in the 1973, with no plan except finance magic.
The schools were going to be closed because the Court essentially demanded income redistribution.
And while seniors getting priced out of their houses was an issue, it turned out to be a Trojan Horse for the welfare state. If NJ really wanted to help seniors, they wouldn’t have done it via a smallish rebate that went to EVERYONE. They would do what Florida does - it limits the assessed values to an increase of no more than 3% if you are domiciled there. Valuation increase is the bane of seniors far more than rate increases.
And I assure you that a GROSS income tax rate nor 9% or 11% isn’t needed to help seniors.
As for funding education “fairly” that fairly qualifier hints at “fair share” income and wealth redistribution which is not “fair”.
And contemporary state government does NOT have to be a nanny state redistribution scheme.
As a person whose profession has been the Federal Tax code for more than 40 years, I can professionally opine that it is completely broken.
In theory, a tax code should be one that focuses on its original intent - to raise money. In practice, it has been corrupted to affect behavior. In western civilizations, it has been used more for social policy than true economic policy, with income being restricted via “transfer payments”. The economy is greatly distorted by exploit taxes and hidden taxes.
Look at the so-called payroll tax. It’s called insurance, which is the I in FICA. That’s why so many people claim their Social Security and Medicare are “earned” benefits.
As a self employed person, I’ve paid in well more than $1 million in so-called Medicare premiums and it won’t be until next year that I will be eligible for benefits, which I will not take because I continue to work and my private health insurance provides far better coverage.
That’s $1 million in so-called insurance premiums for a deferred retirement benefit - paid far in advance - for a program that will not provide me any benefits for some time. I assure you that it would cost me far less to provide my ultimate retirement health insurance when I stop work. So the excess is quite a real tax.
Similarly, I assure you that my actual current plan costs much higher than it would cost me if norm for the cost shifting that Medicare (and Medicaid) causes - another hidden tax.
The health care industry is a great example of what happens in the overarching economy (including student loans which actually is a great example of how government money given freely can undermine the structure of an industry).
Reimbursements under Medicare and Medicaid cause huge hidden taxation by forcing participating providers to accept far less than is economically sound, causing the providers to shift their costs to other consumers of health care.
It costs me $25,000 a year for each married person I employ as my share of their benefit. When I started providing health coverage, it was less than one quarter of that. And that’s after increasing the share the employees pay via higher payroll deductions and higher co-pays.
As I’ve said elsewhere, joint surgery cost me $8,200 because I went out of network. That’s $10,000 less the Medicare reimbursement of $1,800. If I had stayed in network, the provider would have accepted $6,500 from my insurer. So look at that...there’s a clear additional tax of $4,700 at a minimum.
That’s why lots of people prefer catastrophic insurance coverage only - and negotiate fees for cash directly, which doctors are happy to do if they get paid upon performance and don’t have to deal with them ridiculous paperwork and delay required by Medicare and insurance companies.
Indeed, when I did my next joint, that’s what it did - I offered to pay the surgeon $6,500 in cash - what my insurer would have paid mid he were in network and he took the deal so fast, I was sure I could have done better.
How many times have you heard the cliche about people not wanting to earn more because it “puts them in a higher tax bracket?”
Spoken exactly like someone who was working out of a Koch Enterprises "free market" cubicle, targeting internet discussions like these. The fact is, that progressive tax rates have been accepted and defended since the end of World War II, 75 years now. Three generations. The various costs of social insurance benefits will always be debated, but one thing that doesn't get debated at the ballot box is whether we SHOULD have these benefits. The last politicians to attempt this was the late Barry Goldwater in 1964. The last Republican presidential candidate to go to landslide defeat! Even Reagan was too cowardly to go back to his 1960s rhetoric.
Most people earn whatever they can. They care clueless about marginal tax brackets. They think the marginal rate is their total rate, and so they think there's nothing they can do to control that. I know. I do people's taxes as a practitioner. If you say "35% rate", they think it's 35% on everything.
You trace the downfall of the Federal business accurately - FDR started the nanny state. The central government did very well for nigh over 150 years without needing to assess an income tax. It was only when income redistribution became necessary to fund it did graduated rates come into play. 30 years after FDR, LBJ turbocharged it. Indeed, we’ve spent more on the nanny state programs that LBJ gave birth to than the entirety of our national debt.
The Federal government is incapable of running a national nanny state - one size does not fit all. The Federal government should stick to its knitting and not draw outside the lines. Let the states decide matters about the social welfare of its residents.
And, as,to your name calling, I’m no Koch fellow. de Touqueville said that America will lose itself once the people realize that they can be bribed with their own money. In the US, they bribe people with other peoples money called taxes assessed under pain of imprisonment.
There is a difference between a social contract and a legal contract. Moreover, the student loan agreement is optional, whereas Medicaremis mandatory - you can’t opt out.
Medicare is a deal sorely in need of revising and revising NOW, not just prospectively.
Did you know that the first year that Medicare insurances assessments were made against payroll, the maximum ANNUAL tax was $27.10?
And most people drawing benefits now, paid in only on the social security wage limit for most of their working lives, while people now pay in based upon their entire earned income?
Look at this...a 25 year old professional athlete making $5 million a year - whose union contract already provides for lifetime health insurance - has $150,000 paid in on his behalf? That’s the “premium” on health insurance that he’s not eligible to use for 40 years.
Medicare and Medicaid have broken the healthcare system. I had joint surgery not long ago. I went out of network, so my insurer paid me the Medicare reimbursement rate for the code the work was done. The reimbursement was $1,800 against a surgeon’s bill of $10,000.
The only person willing to do that kind of work for $1,800 works in the meat department of your local supermarket. The guy who pays full list - and the in network insurance companies who pay more then a hidden tax on each procedure to cover the cost shifting.
The Medicare system needs substantial revision. They took the income cap off the paying in side after i entered the system. They can adjust the benefit side too.
I don't engage strawmen. Perhaps your outrage is better saved for when Matt decides to publish an article on Medicare.
Until then, save your oranges, we're discussing apples
You have a bunch of people in low income states (red states) who are paying wayy less into Medicare than they get out of it, and price gouging medical professionals who are charging wayy more than what the same procedures or advice, guidance, prescriptions, cost in other countries. My point is that people seem to get all bent out of shape about student loan tax dollars, and yet there is much more waste and moral hazard, and forced subsidies, in the Medicare system. This isn't whether it's "paid as agreed", it's where the system is set up to provide these overly generous subsidies to places and people who can't afford it, and then we are all supposed to get upset about things involving student loan reform. Don't even get me started about military waste.
A fine is a tax for doing wrong. A tax is a fine for doing well