Tag: Taxes

South Dakota loses in Cutting Medicaid

From the 13 member Republican Health Committee that became the Senate version of Obamacare repeal, there was a cut of $770 Billion over 10 years for Medicaid. (And no matter what anybody says, it is a cut.) Senator John Thune, the #3 Republican in the Senate, is from my state (South Dakota) and is one of those members who wants these cuts. I believe that both of our Senators from South Dakota are not doing what is best for our state, just looking out for their party. Why? Take a look at how this will hurt the population.

During Fiscal Year 2013, South Dakota ranked #4 in the percentage of federal dollars as their general budget. 39.0% of the South Dakota General Budget was due to federal funds. So here we are with our United States Senators arguing that we need to have Medicaid funds slashed for the entire country. I agree that we need to cut some federal spending, Medicaid spending is not one of those things that need to be cut. In fact, it is the level of Medicaid spending in South Dakota that has allowed the economy not to follow the budgetary problems of Kansas and the failed experiment of the GOP economic arguments of lower and in some circumstances, no taxes being levied against businesses and individuals.

Talk to the people of rural South Dakota, not those in towns and cities of 15,000 or over for population. They will tell you that the economy isn’t working. They will tell you that prices keep rising, but their wages are not. They will tell you that people and businesses are not investing in their towns. They want to know what our representatives are going to do to help with their economic plight. How they are supposed to fend for their families and loved ones, while working two jobs that pay under $10/hour. They want to know how they can have a community that has enough nurses and doctors for the hospitals and nursing homes that are in that community.   These cuts will not help.

Imagine that the Nursing home in your community is one of the top 5 employers in your town. You know what business gets a majority of their funding from the government, including Medicaid? Nursing Homes. You take $77 Billion in funding out of the budget for Medicaid, guess who has to make either cuts or charge more? Nursing Homes. Guess where families have to pay over $6,500 on average to have their elderly family members taken care of in small communities? You guessed it, nursing homes. Now for a family who has the husband and mother working 60 hours each week at $10/hour, they receive $1,200 per week before taxes. A month would bring in $4,800. Tell me how they are supposed to live and pay for their family members stay in the nursing home for a month? I would say government assistance. Now you are taking away some of that assistance. Where does the money that is supposed to help come from? The state of South Dakota? The state passed a state tax on internet sales because they needed more revenue this past year. So I don’t think that the state has enough money to make up what the Medicaid cuts will leave on the table.

It is crazy to think that politicians are willing to see lower-income Americans struggle even more while the wealth gap will increase by their own policies to help wealthier Americans keep more of their own money. But that is where we are. Senator John Thune sold out his own state to do the national GOP’s bidding. That goes for Senator Mike Rounds and Congresswoman Kristi Noem. Unfortunately, there will not be any backlash from the political class here in South Dakota. We are a true red state and cannot get past “culture war” issues like abortion. Otherwise, we might have a congressional delegation in Washington that looks out for their constituents. Not politicians that know they are safe from the voters.

 

Advertisements

Increase the Marginal Tax Rate And Cut Spending To Eliminate The Deficit

With tax reform coming down the pike from the Trump Administration, we are hearing that middle class income tax cuts are coming. And of course with them, comes the financial bonanza of the tax cuts for the higher levels of income. And while I do identify myself as a Democrat, I am not a spend to the moon Democrat. Some programs need to be reformed, some need to disappear, and some need to continue as it has been in the past. But this tax cut should be scrapped.

Here are some highlights using the Federal Individual Marginal Tax Rates for selected years, adjusted for inflation according to 2012 dollars (all tax rates using single person unless annotated):

1950:
The lowest rate is 20%. $0-$19053 in income gets you that rate. $50,000 in income gets you a 26% tax rate. $100,000 in income gets you a 38% tax rate. $250,000 is a 62% tax rate. $500,000 is a 75% tax rate. $1,000,000 is a 89% tax rate. And finally an income of $1,905,344 is in the 91.0% tax rate. In 1950, the American debt is $256 Billion.

1960:
20% is the lowest tax rate. To get into that rate, you earn less than $15,513. $50,000 is a 30% tax rate. $100,000 is a 43% tax rate. $250,000 is a 65% tax rate. $500,000 is an 81% tax rate. $1,000,000 is a 89% tax rate and finally, a 91% tax rate for people earning over $1,551,311. So from 1950 to 1960, the tax rates have gone up on people. And yet, many people remember those years as a golden age for America. In 1960 the debt is $290 Billion. Only $34 Billion in debt is accumulated. But yet, we aren’t trying to close that gap.

1970:
A 14% tax rate for people who earn under $2,959. $50,000 is a 28% tax rate. $100,000 is a 42% tax rate. $250,000 is a 58% tax rate. $500,000 is a 68% tax rate. Anybody earning over $591,737 is in the 70% tax rate. Less tax rate levels and the people earning huge amounts of money get the tax cuts. Not saying that it wasn’t needed, but in reality, the huge income earners were catered to in this decade. National Debt is $380 Billion. The $90 Billion in debt that was added in the past decade isn’t worried about and taxes are cut. Cutting spending isn’t a viable political option.

1980:
No income taxes if you make under $6,409. $50,000 is a 30% tax rate. $100,000 is a 49% tax rate. $250,000 is a 68% tax rate. Income over $301,760 is in the 70% tax bracket. Tax rates actually rose during the decade. Yes, there was a energy crisis and the Cold War was in full effect, but we effectively raised taxes during the decade. The National Debt is now $909 Billion. The energy crisis of the 70’s and the political turmoil of the Cold War are looked at as the major factors. But yet, still hardly anyone on both sides of the political spectrum are worried about the increase of the debt.

1990:
A 15% tax rate if you earn under $34,167. 28% tax rate if you earned over $34,167. (A 33% Bubble Rate for people that earned $44,900 and $93,130 to recapture the revenue from upper-income taxpayers had saved by applying the 15% tax rate). The 80’s were a great decade for tax cuts. In 1982, the top tax bracket went from 70% to 50%. In 1987, the top tax rate went from 50% to 38.5%. In 1988, the bubble rate was instituted and the top rate went from 38.5% to 28%. Here you have the makings of deficit spending. Tax revenue is going down just due to the cutting of the top tax rates. The government is still spending more and more to subsidize programs, businesses, and individuals. In 1990, the debt has exploded to $3.2 Trillion. So during the Reagan years and his fiscally great administration, the debt more than tripled. And yet, we hear about how unfair the tax system is but nothing from the people that would become deficit hawks.

2000:
A 15% tax rate if you earn less than $34,999. A 28% tax rate for those that earn $50,000. $100,000 in income is a 31% tax rate. A 36% tax rate for those that make $250,000. Over $384,457 in income gets a 39.6% tax rate. In 1991, congress added the 31% tax rate. In 1993, the 36% and 39.6% tax rates were added. The additional tax rates were added in the hopes that it would help increase revenues to combat the deficit. Didn’t really help. But it did give political talking points to those who whine about the tax rates going up and the need to slash government programs. The debt is totally out of control now. It is up to $5.6 Trillion. This is funny. Basically the one President that held office for most of these years and vilified by the GOP for his economic policies and sticking cigars and his mole ridden penis where they shouldn’t be, did not even double the National debt. It is still a serious even perilous problem, but at least the growth of the debt is slowing down.

2010:
A 10% tax rate if you make under $8,818. 25% tax rate if you make $50,000. 28% if you make $100,000. 33% if you make $250,000. 35% if you make over $393,421. In 2001, the tax rates were cut by 0.5%. In 2003, the tax brackets were changed to 6 brackets and lowered by at least 2%. In a decade, the amount of marginal income taxes you pay have decreased by 3%. What that means is that the government is taking in less than what was expected and yet inflation is going up. Prices for upkeep are going up, and more deficit spending. More stupidity by our elected leaders. $13.5 Trillion is the debt now. Basically we ran up the debt 2.5 times during the decade. Invasions of Iraq and Afghanistan help with that. A severe depression starting in 2006 also cause economic problems for the country. And the deficit hawks are mostly silent when these things are going on. Imagine that, politicians looking out for their own political careers.

2013:
The same rates and basically the same amount of income to qualify for those rates. The debt is $16.7 Trillion. The economy is out of freefall. The war on Terror is in it’s second decade and will never end. Reforms seem to be what can help one party or the other. The debt is projected to be $22.4 Trillion in 2020. Nobody is being serious about trying to slow that down. Each political party is entrenched in their decades old rhetoric on how to stop the debt from growing. But neither is right.

People are arguing that we need to cut the rates. OK. Here is what I am going to say. Take a look at what is happening. The government is spending more than it takes in. I think that everybody can agree on that. The question is how we can eliminate $500 Billion per year from the federal budget. That is tough. 7% of the FY18 spending is on interest of our debt, so that cannot shrink. 25% of FY18 spending is on pensions that have been promised. We need to stand by our word. That hurts our ability to spread around spending reductions.

It is estimated that we will spend $1.21 Trillion on medical care in FY18. That is 28% of the budget. Some sort of reform is needed here. We need to figure out how to cut $200 Billion from this budget. And yes, I know that is going to hurt services available to people. And yes, I understand that it will hurt rural areas more acutely than urban areas. But if you are serious about reducing the debt, you cannot grow the economy fast enough to catch up with the spending that the country is doing. So we need to find areas to cut. Here is one of those areas. Prescription drug negotiations for Medicare and Medicaid should be happening for the government. Cut the growth for reimbursement spending, so that stays at the same level. And yes, that is a cut in spending, not just holding the costs the same. Prices go up and you pay the same amount, you are cutting the costs of your spending.

Another place where we could cut spending is the military. Let’s be honest. China is the 2nd largest spending country on their military and they are at about $500 Billion. The United States is at $880 Billion. We all know that there is waste in this budget. I wouldn’t cut it to the bone, but eliminate $130 Billion from the defense budget to get it down to around $750 Billion per year. If a service says that they don’t want a weapons system like the F-35 or the Osprey, then stop spending on it. The Military Industrial Complex gets way too much money for political reasons. We can eliminate some of that waste and actually to some cost analysis for what we need to have on the battlefield. 21% of our budget is spent on defense. President Trump has said that NATO members are now spending 2% of their GDP on defense, so we should be able to cut back a little bit there. Close a couple more bases in Europe. That helps eliminate spending on things that we do not need.

So if we find the savings in those two budgets that I have pointed out, we are spending $330 Billion less than what is in the budget. We have already addressed over 75% of the budget. Next up is Welfare. I do agree that there has to be some reforms, but not draconian measures. The budget calls for $400 Billion to be spent on Welfare. The future projects that the government will spend more on welfare. So we need to have less spending on welfare in the future. That is where the economy can help. If it continues to grow, eventually the spending on Welfare will decrease. But we would cut Welfare spending by 10%. That means $40 Billion would be saved. And yes, people will feel the crunch that are on welfare. But we need to all feel the pain of stopping the debt from growing larger.

We are at $370 Billion in savings. If we stop now, the debt only grows by about $150 Billion per year. But let’s not do this half-assed. Let’s go all the way like the deficit hawks want. Next up is Education spending. At 3% of the total budget, it receives $120 Billion. If the GOP had it’s way, this would become $0. And we would save $120 Billion and almost balance the budget. We know that would be a bad idea. But let’s trim $12 Billion off the budget and find areas where we can save money like eliminating any federal money to going to charter schools. You want your child to go to a charter school, pay for it out of your own pocket. The public school systems of most states need help and any money being siphoned off of that problem just hurts everybody. So with the $12 Billion in savings, we are at $388 Billion. Still need $112 Billion to balance the budget.

And finally here is the point of the post. Increase the marginal tax rates of individuals. A millionaire is not going to miss a little bit of money that needs to go towards taxes. And in conjunction with that, eliminate the special tax rates for investment income and the special tax breaks for corporations. Let me put it this way. If you bring in $1,000,000 in income for a year, you are charged 35% at the current time. That is $350,000 for your marginal tax rate. If you change it to 37%, that is an increase of $20,000 in taxes for them. In 2015, there were 500,000 people in the United States that had an annual income of a million dollars or more. So if you take the 500,000 people that have an income of a Million or more and multiply that by the $20,000 tax increase I would propose to try and balance the budget, you would get 500,000 X $20,000 or $10 Billion.

Increase the tax rate on the $500,000 income earners by 1% or to 36%. There are 1.4 Million people that earn that annual income. That is an extra $14 Billion in tax revenue a year that would help with the deficit.

With just those 2 small adjustments we raise $24 Billion in revenue. With that extra revenue, combined with the cuts that I would make we are at $88 Billion for the deficit in FY18.

If you increase the rest of the marginal income tax rates nominally, you can have the deficit eliminated or it become so small that if the economy does pick up like the politicians have promised, then you could actually start paying off some of the deficit. You would spend less than the previous amount on subsequent interest payments. Imagine that. The future would look better for America and your children. The economic uncertainty would be lessened and then finally people would feel better about their future. You can believe in an America that looks like it’s best days are ahead of it. That is how you get the American people to start believing in their leaders again, not by the bluster that they spew.

Why I Cannot Join The Conservative Movement

I grew up in a conservative household. Both my mother and father are conservative. My grandparents on my fathers side were conservative. My brother and sister are conservative. Me? No. Why? I believe that I ask too many questions and get tired of the hypocrisy. And before you go, there is hypocrisy on the left, let me tell you this: I know. There is hypocrisy all along the political views. But I grew up in a home where the conservative viewpoint was preached and that is the view I identified with. It also made me the most disgusted with the right leaning politicians here in the United States.

One particular thought that is liked throughout the conservatives here in the United States is that we need to drug test any person who is getting welfare. Because anybody that is getting welfare is living high on the hog and spending all their money they get from the government on drugs and booze. Great. let’s save some money by kicking the drug users off welfare. In fact, if you want to save the government money, then anybody that gets government money needs to be tested. And since the Supreme Court has said that U.S. Corporations have the same rights as individuals, they also need to be drug tested. How? Everybody on the Board of Directors of a Corporation that receives money from the U.S. Government takes a drug test. So let’s say that Halliburton gets a new government contract. The Board of Directors all take the same drug test that a woman in Plano, TX takes when receiving her welfare money. If one member of the Board is found to have drugs in their system, the Corporation defaults on the contract and is not eligible for anymore government contracts for 4 years. Might cause some problems for corporations that continuously have people going to rehab on their boards. But it would help get rid of some problems for the people.

Another is taxes. We need to cut taxes so low that businesses can reinvest their capital as well as wealthy individuals. So goes the thought process of the right. It would cause massive growth and everybody will be able to rise. Excuse me as I go puke. The one shining example of how the conservatives want America to be as a nation can be found in Kansas. Yes, that Kansas. The one that said that businesses didn’t have to pay income taxes. The one that cut taxes and said that would fix the budget deficit that the state ran because of all the investment that would come into the state and by the reinvestment of profits from the businesses already in the state. The one that is now trying to figure out how to fund their schools, their roads, the actual state government. The state where the GOP runs the statehouse and wants to start passing tax increases. Tax Cuts favor the rich. And we continue to see that it doesn’t matter how much money you have in savings when you live comfortably. Once you have made it to that level, then you just like for it to accumulate. There was an article in Forbes, I believe a couple of years ago that interviewed Millionaires. The overwhelming thought coming out of that article is that the Millionaires thought that they were being squeezed by the government because the people that were richer than them were making more money than they were and they were getting more tax breaks than they were. So they wanted better tax breaks for them so they could accumulate wealth. Mind you, these people are already millionaires. That means that they had over 1 Million Dollars in wealth. And they could invest in many things. But they were more worried about getting more. Tells you what tax cuts do. Allow people to be hoarders.

And let’s talk about Trumpcare for a minute. They are floating that people will get a tax break to purchase health insurance. Let me ask you something. If you make $25,000 a year, do you think that you will get the same amount of a tax break as someone who makes $100,000 or $200,000 a year? I’ll give you a second to think about it. Time’s up. We all know that the answer is no. So if you are a working class shlub at a Target, you might get a $500 tax break to purchase insurance. For those on Wall Street, you will be looking at a 5 digit tax break. More give to the rich and to hell with 99% of the people.

Next, let’s talk religion. Here, I will make a concession to conservatives. I will call those who follow Islam and attack Americans because of their religion Islamic Extremists as long as those who follow Christianity and attack others including Americans because of their Christian beliefs are labeled Christian Extremists. Call a Spade a Spade. I have read both the Bible and the Koran due to my job in the military. It is funny that both religions believe in the Abrahamic god, and that both religions mirror each other so closely. Anyways, it is real easy to be Christian. You can commit any foul crimes in your life and in some of the sects, as long as you repent on your deathbed, you are going to heaven. Kill a doctor because he performs abortions, you are going to heaven, even though you broke one of the 10 Commandments that were handed down from the Almighty proper. You know those commandments. Thou shalt not kill. Thou shalt not steal. Thou shalt not covet. Those 10 things. But as long as you repent before you die and accept Jesus Christ as your lord, you are forgiven for all your sins. Even if you break all 10 Commandments. Perfect for today’s wanna be religious person. So fuck it, live a nasty, filthy, cheating life. Just make sure you repent before you die. The Pearly Gates are within your grasp.

Those are just 3 things that prevent me from embracing the conservative viewpoint. There is more like abortion, scope of government, even the function of government. The ultimate ends of conservatism for government is either fascism or anarchy. If conservatives were being truthful, they would admit that they are socialists just like Democrats. And that they break the Constitution just like liberals. Is the Constitution a living document like the Citizens United decision made it giving Corporations rights like people, or is it a document that we need to follow the exact wording like we live in the late 1700’s when discussing the 2nd Amendment? Until conservatives can at least figure out those hypocritical viewpoints, I cannot even imagine calling myself a conservative.