(Thursday PO) Biden says his budget plan would extend Medicare to 2050 without adding to the deficit

[GuideToACrazyWorld]

https://www.npr.org/2023/03/07/11615824 ... t-medicare

President Biden is proposing a tax increase for people who make more than $400,000 to extend the life of Medicare for another 25 years, highlighting a major element of his budget proposal which the White House will release in full on Thursday.

This year, the president's budget — a policy document that usually is largely ignored by Congress, which holds the power of the purse — comes ahead of a deadline to raise the U.S. debt ceiling.

House Republicans have said they won't raise the debt limit without substantive cuts to federal spending. Democrats, including Biden, have accused Republicans of wanting to see cuts to Medicare and Social Security, two massive sources of federal spending.

Biden published an op-ed in the New York Times on Tuesday laying out his proposal to invest in Medicare's trust fund so that the program can remain solvent into the 2050s, a plan that would increase the Medicare tax rate to 5% from 3.8% on people who make more than $400,000 a year.

He also proposed allowing Medicare to negotiate prices for more types of prescription drugs, and using the savings from that to preserve the program. The Inflation Reduction Act that Biden signed last year allowed the program to negotiate prices for some drugs.

"Lowering drug prices while extending Medicare's solvency sure makes a lot more sense than cutting benefits," Biden wrote in the Times, "These are common-sense changes that I'm confident an overwhelming majority of Americans support."

Biden said Medicare has been a "rock-solid guarantee" for retired Americans and said his proposals were "common-sense changes" that most people would support.

Recent polling shows people in the U.S. are split on how best to handle budget deficits.
Americans want Congress to deal with the debt ceiling. How to do it is complicated
Politics
Americans want Congress to deal with the debt ceiling. How to do it is complicated

In an NPR poll last month, seven in 10 people, including a majority of Republicans, said they want their representatives to compromise to find solutions when it comes to the budget. But half of those polled said they preferred a solution that mostly cut programs and services, and 46% said they preferred to see an increase in taxes and fees.

Three-quarters of Republicans said they'd prefer to see cuts in programs and services, but Republicans in Congress have been vocal that cuts to programs like Medicare and Social Security are "off the table."

[GuideToACrazyWorld]

Man I'm such an old cynic. I read the headline and my first thought is, "Biden is a liar!". Hears the thing, I think the same thing any time any politician says that their plan won't increase the deficit. The sad thing is, I'm pretty much always right.

Allowing medicare to negotiate prices should be a no brainier. The fact that we are even still discussing that is evidence of just how broken our system is. As for "tax the rich" I have my suspicions that it will ever be successful in our current environment. Our system is far to complex, and the rich will always have the money to find every nook and cranny (not as much fun in taxes as they are in muffins). What we need is a more sensible system. A good start would be a minimum net tax based on income. Get below that, no more deductions. But that would be a band aid. We need to overhaul this system.

[Tarmaque]

Our system is far to complex, and the rich will always have the money to find every nook and cranny

This is undeniably true, and smarter people than us have pointed it out. A long time ago politicians altered the tax code to encourage behavior. Get a tax deduction on loans for real estate for instance was supposed to encourage people to buy homes. Get a tax deduction for saving for retirement. And so forth. The problems with this system are manifold, but we'll focus on just a couple. For instance, tax deductions for saving for retirement is great! For people who are good at investing. Your average American is bollox at investing though. This is a tax deduction designed to encourage one segment of the population, but ends up benefiting the exact opposite part of the population.

But the truth is even worse. Tax incentives never work the way they were intended. This is because dumb people continue to be dumb, and corrupt people continue to be corrupt. Most tax incentives are designed from the get-go to benefit the rich and powerful. This is never going to change as long as holding money up to our politician's ears equates to tax benefits to rich people.

In any case, taxes should never be used as incentives. Taxes should be balanced, fair to all incomes, and used to fund the government. That's the purpose, in any society that isn't horribly corrupt.

Today we have little chance of changing anything. Too many people are making too much money off the system as we have it now. I may sound like a "flat taxer" but I'm really not. I'm open to various forms of taxation. Look into "Wealth Taxes" which is an interesting concept. But it doesn't matter if it's a wealth tax, a flat tax, a progressive tax, something else, or some combination of them all, the point is that making exceptions in the tax code will always benefit those who have over those who don't have.

The truth is That taxation isn't the problem. Back in the days where the highest tax bracket was paying 94% our economy did not implode as modern conservatives suggest. It was one of the times of greatest economic expansion in our nation's history, partially due to the fact that the government was plowing its revenue back into the economy as fast as it collected it. Was all this taxation well spent? Probably not. Certainly not. However it being spent at all encouraged the economy. It took a couple of Republican presidents and an energy crisis to kill all of that and allow them to cut taxes and government income. That's when government deficit spending reached even higher than during WWII.

"Spend and Borrow" conservatives have caused more recessions than "Tax and spend" liberals ever have.

[GuideToACrazyWorld]

The problems with this system are manifold, but we'll focus on just a couple. For instance, tax deductions for saving for retirement is great! For people who are good at investing. Your average American is bollox at investing though.

You could make the "average" argument either way. There is this weird thing about retirement savings. No matter what system a country has tried to incentivize it about 50% of people save enough for retirement and about 50% don't. It's something that both economists and anthropologists have been trying to figure it out for decades. I know, not really the point, but you just made me think of it and I've always found it interesting. What were we talking about again?

In any case, taxes should never be used as incentives. Taxes should be balanced, fair to all incomes, and used to fund the government.

You say that like it's simple. You are right, of course.

The truth is That taxation isn't the problem. Back in the days where the highest tax bracket was paying 94% our economy did not implode as modern conservatives suggest.

That's because the highest tax bracket never actually paid 94% (BTW it was actually 91% but that also isn't the point, but the geek in me can't let it go). In 1960 the top 1% of income earners only paid about 13% of taxes. In 2018 (the most recent year I found an article for) the top 1% paid about 40% of taxes. Retaliative to the rest of America the top 1% pay more today with lower top rate on the top bracket. Which is yet another example of just how messed up our system is. You can't even compare tax brackets from different years and get an understanding of how much people are actually paying.

It's funny BTW you will see the left using that time period as an example of how the wealthy paying more taxes lead to the best growth in our history. While the right will use the facts that I presented above to argue the rich pay too much today. It's all silly. The real reason for our growth during that time period was WWII and and the cold world lead to the US having basically no competition for production.

"Spend and Borrow" conservatives have caused more recessions than "Tax and spend" liberals ever have.

They are all spend and barrow today.