Tuesday, January 26, 2016

The Only Dem "Tax Fake Out" Is From Hillary

Megan McArdle of Bloomberg News claimed in a recent article ('The Democrats' Tax Fake Out', D. Post, Jan. 10),  that both Hillary Clinton and Bernie Sanders want to jump start new programs (worker training, free college, preschool care etc.) but "are probably not going to be able to pay for it with the piddly sums from raising higher taxes on the rich".  She goes on to claim:

"Yet both of them seem wedded to the idea that taxes should not rise significantly for anyone who makes less than $250,000 a year"

Of course, this has since been skewered as Bernie made it clear in a town hall meeting last night (and based on his tax plan released over a week ago) that the middle class WILL have to pay more in taxes, if they expect to reap the enhanced benefits he has proposed.  It is actually Hillary who's vowed middle class taxes won't go up, and even proposed tax cuts. But then she is also the Dem candidate who has indicated we can't afford to expand Social Security or offer free college to deserving kids. After all, you only get what you pay for...or don't!

McCardle cites Bryce Covert of Think Progress "who does a good job of making the case that Democratic priorities can't be funded without broader based taxes.".

McCardle then begs the question - based on Covert's lack of explanation - of why the Democrats are "avoiding this obvious arithmetic". But again, it's Hillary doing so, not Sen. Sanders. And the only reason to dodge higher taxes for the middle class is the same as it was after Obama got elected and the Bush tax cuts finally faced expiration: lower taxes could be used as political opportunism. But Hillary, like Obama, wouldn't inform voters it would mean cuts to their favorite program later. Hence, Obama's 2010-11 advocacy of Social Security cuts (via the chained CPI) and his "Debt Commission". Bait and switch anyone?

But this isn't some new revelation. As early as 2009-10, The Financial Times' Clive Crook warned that continuing the Bush tax cuts would be a serious error, and undermine Democratic -backed social programs.  He showed using carefully documented math - from stats parsed from the Government Accounting Office- that keeping the Bush tax cuts in place (which the Dems did for two years) would have serious repercussions. He was right, and we then saw the chained CPI appear as well as cuts to the SNAP (food stamps) program over two successive years.

I argued in several posts that Americans needed to stop falling for this horse shit and accept higher taxes like Europeans do,especially  if they wished to protect social insurance and other domestic benefits programs.

Last night,  in a Town Hall meeting response to a blunt question from CNN's Chris Cuomo -  on  wanting "big government back" -  Bernie correctly and deftly dodged the acceptance of the loaded language and instead vowed he'd protect the American middle class from further inequality. He also explained how this might translate - in the case of his single payer health program  - into maybe $5,000 a year higher taxes. But before the audience had a collective heart attack he reminded them this would be in place of paying higher private health care insurance premiums of say $10,000 - as many families are doing in exchanges and health coops under the ACA. (Or if they don't have the benefit of a federal subsidy under the ACA and hence have the option of only higher deductible plans).

So pick your damned poison. DO you want $5k higher taxes or $10k yearly premiums (likely to increase each year, as they are doing now - according to the WSJ - by an estimated 9.4%). Sanders also did the math for Cuomo and the audience noting the arithmetic results in a $5k savings.

Another woman asked about the high drug prescription costs and again, Bernie - as he did in Dem debate 2 - vowed to rein in the Big PhRmA price gougers.  His plan, again, is overhauling the entire PhRmA price gouging constellation and forcing them to simplify as well as rationalize drug prices. There is also no reason U.S. seniors have to pay so much more than those in other nations. Why should our seniors and other citizens foot the bill for others around the world? Well, because we allow it to happen!

Thus, the ACA was forged by crafting an $80b deal with PhRmA to disallow any import of cheaper drugs from Canada, as well as prohibiting Medicare from bargaining for lower drug prices like the VA. All of this would change under a Bernie Sanders' administration. The savings to Medicare alone, just to allow drug price bargaining like the VA - would save $200b over ten years.

Sanders' simplified drug plan, such as for Medicare, would also obviate the need for so many seniors to do twenty five hours of research each year to ensure they're not getting screwed over by keeping their current drug plan under Part D. (Which program originated under the Bushies' 'Medicare Modernization Act' - one of the biggest corporate giveaways ever.). In many cases while the senior finds the monthly premiums do go down, the tiers of the drugs he needs are changed so he still ends up paying more. Only careful research, consuming many hours of time, enables him to see another Part D plan may be better so he signs on - but then they may change tiers for their own drugs next time!

Bernie's solution would dispense with this smoke and mirrors BS as well as eliminate the notorious 'donut hole' once and for all.  The $64 question is whether Americans are grown up enough to accept higher taxes to solve these issues, or would they rather keep lower taxes - as well as sniff for tax cuts - but face cuts to their social programs later.

Time will tell, and the first look will be after the Iowa caucuses next week.

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