Bob's Links and Rants

Welcome to my rants page! You can contact me by e-mail: Blog roll. Site feed.

Monday, August 16, 2004

In case you haven't noticed...

Our pResident is a total moron. Here he is "speaking" at a campaign stop in New Mexico:
Rudy is an S corp. That means he pays tax at the individual income tax rate. And so when you hear my opponent talking about taxing the rich, that means running up the rate, the high rates, he's really taxing small businesses. See, they put out $2.2 trillion of new spending promises. He hasn't even got to September yet, by the way. (Laughter.) And he says he's going to pay for it -- (applause) -- he says he's going to pay for it by taxing the rich. That means that S corps that are doing okay are going to pay higher taxes. We don't need to be taking money out of the small business coffers as this economy is beginning to grow. If most new jobs are created by small businesses, and most small businesses are sub-chapter S or sole proprietorships, it makes no sense to run up the taxes on these people as this economy is beginning to grow. (Applause.)

You know what else I think? You know what else I think when they say, tax the rich? Most rich people are able to avoid taxes, and if you can't raise enough money from taxing the rich, guess who pays the taxes? Yes, you do. But we're not going to let him. That's what this campaign is about, to make sure we've got good tax policy.
So taxing the rich means taxing small businesses. But they're rich, so they know how to avoid taxes, but somehow that still hurts their small businesses, even though the middle class is paying the taxes. Amazingly though, after the tee shirt screening and the loyalty oath, W isn't the dimmest bulb in these crowds. How did they response to this totally nonsensical blather?
AUDIENCE: Four more years! Four more years! Four more years!
Here's a less obvious inanity, but one everyone should know about when trying to converse with Bush supporters:
Bush: I like the idea of health accounts where people own them and manage them so that the principal decision-makers for health care are doctors and patients, not bureaucrats.
There's one very simple word for health savings accounts (HSA's): scam. HSA's do little for low-income people, because they are basically an income-tax deduction. Since the biggest part of the tax burden for low-income people is in the payroll taxes, not the income taxes, and because they're already in a low bracket, the possible savings are very minimal. I don't have the exact numbers, but here is approximately how I think it would work. Suppose that you were making $6.50 an hour, or about $13,000 per year. I think you'd be in a 10% tax bracket, and the standard deduction would be about $4000. So you'd be paying 10% on $9000, or $900 a year in income taxes (plus a bunch in payroll taxes--FICA, medicare). If you somehow could find a way to put $1000 into an HSA, it would drop your taxable income to $8000, and your income taxes to $800. So far, you've given $1000 to an HSA management company (bureaucrats!), and gotten $100 in tax savings. What a deal! Now if you were "lucky" enough to have exactly $1000 in medical expenses for the year (for which you may well have paid more than most people because, well face it, you're poor), the HSA company will probably reimburse you for the $1000 you gave them (without giving you any of the interest they've been earning on your money), and you're $100 better off than without the HSA, in theory. What bank you had to rob to come up with that additional $1000 to pay the bill before you're reimbursed isn't something Bush or the HSA will help you with. (And don't expect any bank to give you a loan--you're poor, remember?) If you make it through the year without medical bills of $1000? The HSA keeps the difference. They may decide to keep the difference even if you do run up $1000 in bills. You might try suing them, if you can find ANOTHER $1000 to retain a lawyer (this ain't malpractice--the lawyer won't take your case on contingency). Of course, if the Bushies have their way, yours would likely be one of those "frivolous" lawsuits they want to eliminate.

Now if you're wealthy, it's a whole different story. Most of your medical expenses are already covered by insurance--the HSA just goes to cover deductibles and copayments. You've also got a good idea of how much you normally spend on health care a year, and you may even have an accountant to keep track of it all for you. In fact, the HSA is just one of the many ways you have to avoid taxes, like all rich people (according to Bush). Your HSA management company is probably more reputable, and they know you can afford a lawyer if they try to screw you.

As far as the principal decision-makers for health care? I don't see how HSA's make much of a difference. For low income people, HSA's are a huge gamble, offering very limited potential gain while risking a large percentage of one's income. For the HSA management company, which most certainly has given large donations to the Bush campaign, there's basically no risk. In the worst case scenario (the patient uses all of the HSA on medical bills), they get the interest on other people's money for the better part of a year. In every other scenario, they get more--sometimes much more.

HSA's have as much to do with providing health care to those who don't already have it as the war in Iraq had to do with protecting us from terrorism. (That is, zip, zilch, nada.)

(BTW--I'm not an expert on this. If I'm wrong in my analysis, please let me know. But I did have an HSA in conjunction with my medical insurance for two years. The first year, I had enough in copayments and other allowable expenses to get fully reimbursed the $180 I put in, so I saved maybe $45 on my income tax. The next year, I had very few medical bills, and lost the receipts for those. The HSA company got to keep my entire set-aside.)

All that nonsense, and aWol hadn't even gotten to foreign policy. It ain't any better, folks, but it's time for me to get to bed. Read it and weep, if you've got the stomach for it.

BTW: Why are Bush's campaign speeches on Shouldn't they be on his campaign web site, not the web site paid for out of our taxes (not the rich people's taxes, because they don't pay any, unless they run a small business, or something...)?