So it's not a tax break, it's only a tax cut. Yes, that makes it sound much better.
it's a rate cut, not a tax cut. it's tax neutral in its' effect because it also closes loopholes and credits used by the rich to avoid taxation. just as the Presidents' own Bi-Partisan Commission suggested. In fact, the Ryan budget's top tax rate is
higher than they suggested.
as a quick example, let' us say that you earn 100,000 and are taxed at a rate of 25%, but you are able to write off $10,000 because you've invested it in "green energy". if I lower your tax rate by $2,500 a year, but
also get rid of that loophole;
then the actual check that you send the IRS will not change one penny. and so you haven't gotten a tax cut - you've recieved a rate cut that achieved tax neutrality.
Just as the Ryan budget does.
That is why I said if it was true. I do not know for sure, but pardon me if I don't take your word for it. Now, the effect of the plan on those under 55 is dramatic and painful.
not really. in addition to giving future retirees plenty of time to plan (which the Presidents'plan does not), it also means-tests Medicare to provide more support for poor seniors and less support for wealthy ones. in addition, by allowing them to direct their own Medicare dollars, it allows Seniors to lessen the impact by focusing the money where they individually need it most.
No, the difference is that Ryan's plan forces seniors to buy private insurance and gives them money for it. The CBO was absolutely brutal about this. Just because something needs to be done does not mean that this is the right thing to do.
and the President's plan is just to start denying coverage for services. :shrug: as for the CBO's "brutality", what i saw is that they said it would cost Seniors more - which, if they choose to maintain higher levels of coverage, is correct. however, it is very likely that their figures overshoot what the actual cost will be - Medicare D (which this plan basically is) ended up costing
40% less than the CBO said it would, thanks to the competitive power of the market.
what the CBO
doesn't discuss, however, (and this - as above- is because they are stuck with static scoring), is that this reverses the effect that Medicare has had on overall healthcosts for the past half-century.
Ryan's plan, known as premium support, would gradually bring down health costs and spending, but it's a "cut" only in the sense of slowing the rate of growth. The premium support subsidy—for seniors to choose from a list of regulated private health plans—would start at $15,000 a year and increase annually. It is also means-tested to provide more help for lower-income seniors...
Economists from the center-left to center-right have been recommending premium support for decades, and it was first proposed by Stanford's Alain Enthoven in the New England Journal of Medicine in 1978. Some version has since been endorsed by everyone from President Clinton's 1999 Medicare commission, chaired by Democrat John Breaux, to Bob Dole and Tom Daschle in 2009. Another iteration was floated this week by a group of Nobel laureates including Ned Phelps, Vernon Smith and George Akerlof.
The core economic distortion in the current health market is that consumers rarely have the incentive to seek the best value for their money. By capping the Medicare subsidy, seniors would pay for the marginal costs of their care, promoting competitive insurance. That would in turn incrementally change how doctors and hospitals provide care, encouraging competition in price and quality...
But the key point is that premium support would reduce health costs over time by changing the incentives of the health market. MIT economist Amy Finkelstein's research suggests that Medicare's 1965 creation led to market-wide changes that explain about half of the increase in real per capita health spending between 1950 and 1990. Mr. Ryan's plan would be as consequential in reverse...
but as CBO brutality goes, i would say their point that the
President's plan actually saves NO MONEY is a bit rougher.
