September 10, 2009
Politico-Heritage chat: Stuart Butler on healthcare
Since employers don't "pay" for employees health insurance and it is part of your salary, will my employer add the $5,000 plus, being sent to the insurance company on my behalf,to my salary?
We must be concerned because of the current unfunded liaability of Medicare and Social Security. The future for our children is dark. Check what will be needed in Income Taxes to fund the current Medicare/Social Security requirements for the Baby-Boomers who are retiring. You need to read the following:
National Center for Policy Analysis (NCPA)
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Social Security and Medicare Projections: 2008
Brief Analysis | Economy | Federal Spending | Social Security | Taxes
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Wednesday, April 30, 2008
by Pamela Villarreal
The 2008 Social Security and Medicare Trustees Reports show the combined unfunded liability of these two programs has reached $101.7 trillion in today's dollars! That is more than seven times the size of the U.S. economy and 10 times the size of the outstanding national debt. The unfunded liability is the difference between the benefits that have been promised to retirees and what will be collected in dedicated taxes and Medicare premiums. Last year alone, the size of the debt rose by $11.5 trillion. If no other reform is enacted, this funding gap can only be closed in future years by substantial tax increases, large benefit cuts or both.
Social Security versus Medicare. Social Security's projected deficit receives the bulk of attention from politicians and the media, but Medicare's future liabilities are far more ominous. The numbers in the nearby table are especially interesting in light of President Bush's efforts to reform Social Security. Note that:
* Medicare's total unfunded liability is more than five times larger than that of Social Security.
* Further, the Bush administration's newly added prescription drug benefit (Part D) has an unfunded liability greater than Social Security!
Unfunded Liabilities of Social Security and MedicareFuture Payroll Tax Burdens. Currently, Social Security and Medicare Part A (Hospital Insurance) benefits are funded by a 15.3 percent payroll tax on wages — 12.4 percent for Social Security and 2.9 percent for Medicare. But if payroll tax rates rise to meet unfunded obligations:
* When today's college students reach retirement, Social Security alone will require a payroll tax of 16.55 percent, one-third greater than today's rate.
* When Medicare Part A (hospital insurance) is included, the payroll tax burden will rise to 25.25 percent — more than one of every four dollars workers will earn that year.
* If Medicare Parts B and D are included, the burden of Social Security and all of Medicare will climb to 33.6 percent of payroll by 2054 — one in three dollars of taxable payroll, and twice the size of today's payroll tax burden!
Thus, one-third of the wages workers will earn in 2054 will need to be committed to pay benefits promised under current law. That is before any bridges or highways are built and before any teachers' or police officers' salaries are paid.
Impact on the Federal Budget. Until recently, the combined effect of Social Security and Medicare on the rest of the federal government was relatively small. The combined deficits of both programs now require about 8 percent of general income tax revenues [see the figure]. As the baby boomers begin to retire, however, that number will soar, and, as a result, it will be increasingly difficult for the federal government to continue spending on other activities. In the absence of a tax increase, if the federal government keeps its promises to seniors and balances its budget:
* By 2012, the federal government will stop doing 1 in 10 other things it has been doing.
* By 2020, the federal government will stop doing 1 in 4 things.
* By 2030, about the midpoint of the baby boomer retirement years, the federal government will stop doing about 1 in 2 things.
Impact on Federal Revenues. Total health care spending in the United States has historically grown 2.5 percentage points faster than per capita Gross Domestic Product (GDP). In particular, Medicare spending may rise even faster than the Trustees report estimates. According to the Congressional Budget Office (CBO), if Medicare spending continues to grow at the historical growth rate of total health care spending:
General Revenue Transfers to Social Security and Medicare
* Social Security, Medicare and Medicaid (the health care program for the poor) will consume nearly the entire federal budget by 2050.
* By 2082 Medicare spending alone will consume nearly the entire federal budget.
Can Higher Taxes Solve the Problem? The CBO also found that if federal income tax rates are adjusted to allow the government to continue its current level of activity and balance the budget:
* The lowest marginal tax bracket of 10 percent would have to rise to 26 percent.
* The 25 percent marginal tax bracket would increase to 66 percent.
* The current highest marginal tax bracket (35 percent) would have to rise to 92 percent!
Additionally, the top corporate income tax rate of 35 percent would have to increase to 92 percent.
Pay-As-You-Go. Social Security and Medicare are in trouble precisely because they are based on pay-as-you-go financing. Every dollar of payroll taxes is spent. Nothing is saved, and nothing is invested. The payroll taxes contributed by today's workers pay the benefits of today's retirees. However, when today's workers retire, their benefits will be paid only if the next generation of workers agrees to pay even higher taxes.
What about the Trust Funds? Like other government trust funds (highway, unemployment insurance and so forth), the Social Security and Medicare Trust Funds exist purely for accounting purposes: to keep track of surpluses and deficits in the inflow and outflow of money. The accumulated Social Security surplus actually consists of paper certificates (non-negotiable bonds) kept in a filing cabinet in a government office in West Virginia. These bonds cannot be sold on Wall Street or to foreign investors. They can only be returned to the Treasury. In essence, they are little more than IOUs the government writes to itself.
Every payroll tax check signed by employers is written to the U.S. Treasury. Every Social Security benefit check comes from the U.S. Treasury. The trust funds neither receive money nor disburse it. Moreover, every asset of the trust funds is a liability of the Treasury. Summing over all three agencies (both trust funds and the Treasury), the balance is zero. For the Treasury to write a Social Security check, the government must first tax or borrow.
Conclusion. The Social Security and Medicare deficits are on a course to engulf the entire federal budget. If our policymakers wait to address these growing debts until they are out of control, the solutions will be drastic and painful.
Pamela Villarreal is a policy analyst with the National Center for Policy Analysis.
employers 'pay' for your insurance. yes, we get a tax deduction as a cost of doing buisness. I pay 100% of my employees health insurance. I have paid for every increase in premiums. If we did not get the tax deduction, i would NOT cover my employees. I would add my current cost to their checks (which they would then pay taxes on) and then when increases come thru, they would be on their own. Loose, loose for the employee.
What can be done in the free market, should stay in the free market. It is a moral and ethical duty of government to have the decency to appreciate and respect the freedom of the people to conduct business and the people's freedom of choice to purchase, without the government's unconstitutional interference.
But they're trigger happy and power hungry!
Health care is not insurance. Take-over is not reform. Government threats are not constitutional.
Comparing the cost of health care in the free market to a "public" government program is not an accurate comparison.
If the our government get's their hands on our health care, it will give them unlimited access to all of the "uneccessary" cash we have. It will give them the ability to increase our taxes (and they will) far beyond what we are all paying now for our coverage
America, they don't care about providing health care for the people who don't have it. They want the cash and the power over our money.
You see Brian, this administration has contempt for small businesses like yours and mine. They don't like us as a voting block, and they don't like the money they think we make.
Viva La 2010!
The only answers to Fascism lie with the Fascist! Just remember, you can't ask Obama, he lies! Quite the conundrum isn't it?
We must understand that Obama has been taught for years by radicals beginning with Saul Alinsky's principles. Alinsky's goal in his book "Rules for radicals" was to destroy "capitalism". This ultimately destroys our country. Look at Obama's decisions and takeover of the automotive corps. and the banks and his future decisions as being aimed at destroying capitalism and hence our country. We must stop him!
I can't remember at any given time all the areas of our nation's institutions that the Obama Administration is penetrating, with the apparent intention of controlling them. Autos, Financial, 2nd Amendment, Environment, Communications, Defense, Foreign Relations, Our Adversaries, Energy….and more. We must deep the feet of our Congressional people to the fire (Democrat or Republican) or by 2011 our nation will degrade towards 2nd or 3rd class status losing, perhaps permanently, any significant status or influence in world affairs, with a similar economic situation, as well.
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