Joe Guarino writes on his blog Guarino
How Obama Will Pay for Health Care
We are now beginning to see the early rough confines of the plans Barack Obama and the congressional Democrats have to pay for the massive new health care entitlement they envision; and for the rescue of Medicare, which otherwise would bankrupt the nation on its current path.
These financial undertakings are going to be attempted after having already expanded health care entitlements with the SCHIPS that was recently passed; and the Medicaid expansion under the stimulus bill. And we need to remain mindful that we are simultaneously seeing huge bailouts of financial industries, the automobile industry and certain mortgage holders; the horrendous spending in the stimulus bill; and other massive expansions of the welfare state. With apologies to the late Everett Dirksen, a trillion here, a trillion there, and sooner or later it adds up to real money.
In any case, how are we going to pay for all Obama wants to do with health care? Here are some pieces of information now coming into focus:
1. We are going to see the income tax rate for those with incomes above $250,000 rise to 39.6%.
2. Upper income Medicare beneficiaries would have to pay more for prescription drug coverage.
3. Itemized deductions are going to be reduced for higher income taxpayers for things like charitable deductions, local taxes and the like.
4. And ultimately, it seems likely there will be higher payroll taxes as well. This will likely include all taxpayers; but will disproportionately affect those with higher income once again, because there will be an enormous temptation to eliminate any income cap on payroll taxes.
The sum total of all these changes to pay for health care is that taxes will likely be increased on most Americans; and there will be very steep net tax increases on Americans with incomes greater than $250,000. The problem, of course, is that these tax increases will be much greater than what Obama disclosed during the presidential debates, when most Americans were paying attention. The net effect is a massive redistribution of income.
Obama did not disclose what his tax policies would be because he wanted to win the election. But he also felt the need to obscure his tendencies toward socialistic approaches.
Many of the people who will be paying sharply higher taxes are not really "rich". Instead, they are upper middle class. They are working people, and small business owners, who create jobs and give generously to charity. Some might not have huge amounts of assets. And many already pay a hefty burden in combined federal, state and local taxes, which causes their real net income to be much less than it might otherwise appear. Weakening this class of Americans economically by redistributing their income might be politically tempting, but will ultimately backfire, because less jobs will be created by small business-- the dynamic incubator of new job creation in the modern economy-- and less will be saved and invested. The stock market seems to agree with my assessment. It has done very poorly since Obama has had the opportunity to announce all his plans.
And taking even 100% of the income of higher income taxpayers will not be sufficient to eradicate all the deficits caused by the current bailouts, and all the current and future spending. It will not pay for all the health care schemes we are witnessing.
On Tuesday night, Barack Obama invoked themes of responsibility repeatedly to persuade those listening to his speech. But in fact, his plans for health care and the welfare state suggest to me he should be claiming the converse:
The above is from Joe Guarino's blog and you can read the rest of this great article here
I found the article after doing a search for how Obama is going to pay for health care. I was up late last night and caught the tail end of a news broadcast that said that Obama is going to pay for his new healthcare system by decreasing Medicare benefits and Medicaid benefits and decreasing charitable deductions and mortgage interest deductions. Well call me a dimwit but doesn't that mean that people will then, in turn, decrease their charitable deductions, think twice before buying a home, and probably never be able to fully retire, at least those who will only have social security to depend on. And doesn't Medicaid aid those who are economically disadvantaged? So we are going to penalize them, as well. According to the article by Mr. Guarino, it is only the rich who will be feeling the pinch, at least most of it, but it looks like all of us who are working will be paying higher taxes (gee, I can't tell you how that just warms my heart when I see all those who are not working, and I don't mean the ones who are laid off, I mean the ones who just don't want to work and please don't pretend they aren't out there!). They will probably have better healthcare than me. Also, one of the ominous clauses in the Stimulus bill points to government regulation of medical care to the point that they will decide whether a person on Medicare actually needs medical care, i.e., an 80-year-old just might not get that hip if the government believes they don't have that much of a productive life left. I'd just like to take a moment and thank all the asshats who voted for this dim bulb. We are all socialists now.