Wednesday, September 28, 2011

A Conservative Plan to Soak The Rich

Mark Thiessen has a smart column in today's Washington Post, in which he lays out how St. Paul of Ryan would end subsidies and initiate means testing for wealthy beneficiaries of taxpayer largess.  I gotta be honest with you--there isn't an idea in this column I don't support.  Not a one.  The Kitten and I have been having a lot of discussions lately in which she accuses me of being soft on my Conservatism (this, from a closet lefty) because I support means testing, and because I support programs that would peg retired healthcare premiums to one's retirement pay--so a retired three star would pay more than a retired staff sergeant. 

She gets on me about this.  Her point is that presumably the healthcare is the same--so why should "richer" people pay more for it? This is a good question and it caused me to do a lot of thinking on the subject.  Additionally, means testing Social Security and Medicare benefits strikes her as horrific, adding to the horror is her perception of my inconsistency.

So here goes.

I believe in the graduated income tax (uh oh, here comes Hammer).  I believe it is fairer to ask people who make more money to shoulder more of the burdens of government--proportionally as well as in real terms.  In theory--the graduated system works well.  Now, we've screwed the system up in a way that creates a huge (47%) class of wage earners who pay no income tax, and that's wrong.  But the concept of a graduated tax sits well with me.  Do I think the rich should pay MORE now?  No--of course not--we should cut spending, and ensure everyone pays SOMETHING in income taxes.  But the system is already pointed in what I consider to be a fair direction.

Military retirement healthcare?  Not so much.  The system is bankrupting DoD (along with other personnel costs).  There's nothing "graduated" about it.  A 3 star retiring this year with 35 years of service will take in over $13K a month in pension in his first month of retirement, while an "E-6" retiring this year with 20 years of service will take in $1700 a month in his first month of retirement.  For BOTH, the healthcare premium for their families under "Tricare Prime" is a little under $500 a year (or $42 a month)--which turns out to be .3% of monthly income for the three star but 2.5% of the E-6's monthly retired pay.  Where is the fairness here? If it were graduated (and proportional) the three star would pay $342 a month--certainly do-able on $13K a month. 

As for means testing Social Security and Medicare, the Kitten can't believe I support it.  She thinks it is cosmically unfair to means test it--but again--the system is bankrupting, and social security represents an already skewed transfer of wealth from the young and productive to the old and unproductive.  Sorry folks, that's indisputable.  Where older folks have the means, they should have their benefits strung out over a longer period of time, in essence, reducing their checks.  In a system in which more and more people are taking more out of the system than they put in (longevity), we need a way to extend the program's life to pay for what essentially is old-age welfare for those who live longer than what they paid in will support. 

Hard choices here folks, and if we all don't start rowing in the same direction soon, the whole system will crash.  


Anonymous said...

Absolutely right in all respects! Those who benefit more from the opportunities America provides should contribute more. At the same time, no one should be exempt from taxes. As long as a person contributes a dollar,they have equal griping rights with those who contribute a million, in my opinion.

Anonymous said...

CW, Wow, you should consider shifting your focus to the campaign of Elizabeth Warren in MA. You echo her (and uncle Karl's) belief in the concept of from each according to his ability, to each according to his needs. Would you also argue that the E-6 should draw the same pay as the three star while on active duty? Why not? That seems fair as they are both serving and may even work the same amount of hours. The graduated system is fundamentally unfair and on this issue you seem to be guided by your emotions, rather than by your usually sound logic.

"The Hammer" said...

I don't see a problem with means testing social security especially since after three or four years most recipients have received back much more than they every paid in (interest included).

CW the rule on taxes is they should be low and broad based. I can live with a graduated tax but I'd prefer a much flatter scheme than we have now. A consumption tax (specifically the FairTax) also looks really good but there's always the law of unintended consequences.

The problem with taxes is not so much the rate but the loop holes and set asides. The bean sprout farmers get this, alternative energy gets that. And of course, the 47% who pay nothing. Crap like this is a major source of power for politicians...and that's why it has to be stopped.

Anonymous said...

I'll go out on a limb and say the health care costs of the retired SSG will exceed those of the retired 3-Star. When you compare the general level of personal fitness, family members to support, "non-emergency" emergency room visits, and lifestyle habits, I assert the SSG's health care costs, over the remainder of his/her remaining lifespan, will go far beyond the 3-Star during the remainder of his/her lifespan.

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