Are You Calling Me A Socialist?

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Disgruntled Republican Voter: I’m sure glad that I’m not one of those takers who expect the government to subsidize their health care. Everyone who takes a subsidy from the government is lazy and needs to get a better job that covers them.

 

Disembodied omniscient voice from above (think James Earl Jones): I’m glad you don’t want your health care subsidized by the government. So you will be in favor of having your health care from your employer being declared as income, and then you can pay taxes on it, right?

 

Disgruntled: I say – what are you talking about?

 

Disembodied: Health care benefits have never been considered as taxable income. This is a historical artifact from the time that health care was first provided to employees in WWII as a way to skirt wage controls.

 

Disgruntled: So what difference does it make who pays for it?

 

Disembodied: If businesses had to declare the value of health care as income for their employees, then the employees would be liable for taxes on this income. You just said you’d be happy to pay the taxes, right? Just so you wouldn’t be taking a subsidy from the government.

 

Disgruntled: I’m not sure … how much are we talking about here?

 

Disembodied: Let’s just use average figures here. You have family coverage, right?

 

Disgruntled: Yeah.

 

Disembodied: Average employer cost for a family policy last year was $12,600 per year. Now you are pretty successful, you make between $19,000 and $75,000 per year, right?

Disgruntled: Yeah.

Disembodied: Then you are in the 15% tax bracket. So if you had to declare $12,600 more in income, that means that the federal government is giving you about $1900 in tax subsidy for your policy from your employer. The one that distinguishes you from the moochers who get a government handout, right?  But then there’s more.

Disgruntled: More?

Disembodied: You live in a state with an income tax, right? Say the tax bracket for your state is 5% for your income. Then the state is giving you a tax subsidy of over $600.  That brings your total tax subsidy to about $2500 per year. But then, there’s the FICA tax to consider.

Disgruntled: What?

Disembodied: Since your taxable income just went up, you owe social security and medicare tax on this new income. So for $12,600, your tax that you don’t have to pay at all is almost another $1000 per year.  And your employer also avoids another $1000 per year that they’d have to pay to match your contribution.

Disgruntled: Ouch!

Disembodied: I calculate that due to the way that health care is accounted for in the tax code, your avoided tax is just about $3500 per year, and your employer avoids paying an extra $1000. So I’m glad that you’ve decided not to be a taker of government money, because your government could sure use the extra $4500 that you said you’d be willing to pay.

Disgruntled: Now wait a minute, I never said …

Disembodied: Oh yes you did. You said that you’d never want to be one of the takers who takes a subsidy from the government. That means you want to correct this problem in the tax system. Of course, if you were in a higher tax bracket, like 25%, you’d be getting even more free money from the government.

Disgruntled: You’re using fake facts. You’re probably part of the lying media. I’ve never seen anything about this on Facebook.

Disembodied: Believe what you will. Reality does not change based upon your beliefs. The facts are that you get money from the government to subsidize your health care benefit that you earn. Of course, you still pay all of the out-of-pocket and shared premium as well.

Disgruntled: And they keep going up and up. It’s all due to Obamacare.

Disembodied: Health care costs have been going up faster than inflation for decades before the ACA came into being. One reason is due to the screwy way health care gets paid for. We spend over 25% just on the administration. Funny thing is, when you have a single payer system like Medicare, that administrative burden goes down to about 5%.

Disgruntled: You mean single-payer would cost less? Why don’t we consider it?

Disembodied: Because the 1% class you put into the government believes that only moral reprobates who have immoral habits get diseases or have accidents, and they are the ones who drive up costs for the superior class of folks who have employer-paid health care. Besides, the 1% gets a hell of a lot of tax cuts when the taxes that supported the ACA are backed out.

Disgruntled: Yeah, but isn’t single payer socialism?

Disembodied: You mean the current system that gives free money to taxpayers and employers to have employer-based coverage isn’t socialism? Isn’t that government picking winners and losers? You’re a loser if you work three part time jobs and 60 hours a week but none of your employers provide health care and you don’t deserve any government subsidy? You’re a winner if you work for someone who provides health care as a benefit?

Disgruntled: Nobody knew health care could be so complicated.

Comments

Dino Manalis Added May 11, 2017 - 2:43pm
Health care should be treated as an economic issue, we need both high quality and affordable prices across the healthcare industry for insurance premiums to come down!  Buying health insurance, should be like buying auto; homeowner's; or life insurance.  It shouldn't be the employer's decision, anyway, it's a personal health decision!
Utpal Patel Added May 11, 2017 - 3:53pm
The fact employers provide a tax-free benefit to their employees is not equivalent to socialism or an example of the government picking winners and losers.  It’s because of the ill-advised income taxes that employers have found a creative way to compensate employees.  To the extent taxes were 0%, employees would prefer the money and then they could go out and buy whatever insurance they deemed necessary.  For those not lucky enough to have a job that provides this benefit, socialism would be giving everyone else insurance because they don’t have a job.  You see, there should be benefits for those that are successful in life and draw backs to those that aren’t.  We shouldn’t just give everyone whatever they want because some other person earned it.    
Jeffry Gilbert Added May 11, 2017 - 4:25pm
“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” - John Steinbeck 
John G Added May 11, 2017 - 10:25pm
You see, there should be benefits for those that are successful in life and draw backs to those that aren’t.
Why?
Even A Broken Clock Added May 12, 2017 - 9:30am
Utpal - I disagree with your premise. My point was that employee based health care is an example of government subsidization of the health care process because of the tax preferences it provides to employees and providers. It appears that you are part of the population who view only those who are fortunate enough to work for an entity that provides health care as worthy of having health insurance.
Mike Haluska Added May 12, 2017 - 11:15am
Broken Clock - you're far beyond a "broken clock", you're a molecularly disembodied phantom of a clock.  Your statement exposes the typical "sleight of hand" Socialists always use because if they speak clearly they know their initiatives will be rejected.  Anyone who works for a living, can do simple arithmetic and believes that the money he EARNS is HIS wants nothing to do with any Socialist program:
 
"I’m sure glad that I’m not one of those takers who expect the government to subsidize their health care."
 
The key phrase is "expect the government to subsidize".  In plain, factual English it should read :
 
"expect the government to confiscate money from working taxpayers to pay for their entitlements (whole another subject with that word)"
 
Get it through your addled brain - the GOVERNMENT CAN'T "GIVE" ANYTHING TO ANYONE WITHOUT FIRST TAKING IT FROM SOMEONE ELSE FIRST!!!
John G Added May 12, 2017 - 6:54pm
Get it through your addled brain - the GOVERNMENT CAN'T "GIVE" ANYTHING TO ANYONE WITHOUT FIRST TAKING IT FROM SOMEONE ELSE FIRST!!!
 
Oh the irony. Taxes are paid with $ that the government had to spend into existence in the first instance.
Without government spending you'd have no $ you clown.
Steve Bergeron Added May 12, 2017 - 8:28pm
The misguided notion that people who have succeeded somehow "owe" people who refuse to work, an equal share of everything, will lead, eventually, to chaos, mayhem, and death.   This foolish notion of "distribution of wealth by the government" relies on giving what someone earned, usually through hard work and shrewd investment, to someone else who hasn't bothered to work hard(usually lazy people with little or no work ethic - today's "entitled" generation), or who has been foolish with their time, talent, and treasure.  Throughout history, I think this has been called theft.  It is an injustice and will not lead this country to peace and prosperity.  It will lead this country to mediocrity and failure.
Gerard Oosterman Added May 12, 2017 - 10:53pm
I am proud to be called a socialist. Social democracies have by far been more successful economically than the blatant Capitalists as seen in the US and my own country of Australia.
Take Norway; the rate of incarceration about 70 per 100.000 per capita
The US; 700 per 100.000
Australia the UK, also high rates of prisoners and rising. The system is broke(n)
 
John G Added May 12, 2017 - 11:19pm


Steve Bergeron 



The misguided notion that people who have succeeded somehow "owe" people who refuse to work
Why do you believe that people refuse to work? There aren't enough jobs because the Federal government deliberately underspends to maintain a pool of unemployed labour to push wages down.
And taxes pay for nothing.
Steve Bergeron Added May 13, 2017 - 4:10pm
John G, wages should be determined by market supply and demand, not the government.  The government's job is to protect its citizens and their rights, as defined in the Constitution, not to insure material "happiness."  As I taught my children, the harder it is to learn something, the more it usually pays. (Yes, a general statement, but it is generally  true.)  If an individual refuses to work hard enough to gain the skills to make him/herself marketable, then why should they have the same material advantages as those who do?  And why should the people who invested in themselves aquire get these skills, pay for the material goods of those who refuse, to make them materially equal?  Help me out here.  Where is the justice in that?
John G Added May 13, 2017 - 5:05pm
John G, wages should be determined by market supply and demand, not the government.
That's a simplistic statement that ignores macroeconomic reality. While there is unemployment caused by insufficient demand (spending) the 'market' is skewed against labour.
There seems little point in having an economy that pays below subsistence wages while the plutocrats rake in windfall profits and further remove spending.
John G Added May 13, 2017 - 5:06pm
Bergeron, you reminded me of this.
The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
John Kenneth Galbraith:
Mike Haluska Added May 16, 2017 - 11:01am
Gerard - a nation's Incarceration Rate is NOT a measure of economic prosperity!  There has NEVER been a nation that even COMES CLOSE to the economic productivity and standard of living of the United States - period!  The amount of "Free Stuff" that a Socialist Nation "gives" its citizens that think that they are "entitled" to is a measure of legalized theft from productive people and resources - not economic growth!  
 
Under Free Market Capitalism, the economy is freed to PRODUCE wealth so that those who innovate, work hard and take risks are justifiably rewarded.  Under Socialism, wealth is REDISTRIBUTED regardless of hard work, innovation and risk taking and growth is STIFLED. Eventually, the "economic cannibalism" chases off the producers to free market nations and the remaining parasites must resort to greater and greater degrees of force to produce even the most basic needs.  This is when you get a Hitler, Mussolini, Stalin, Mao, Pol Pot, Hussein, etc. who enslaves the population to work for strictly for the benefit of the politically elite.  Name ONE capitalist nation that produced tyrants like these!!
Even A Broken Clock Added May 17, 2017 - 12:09pm
Mike - are you familiar at all with the works of the historian Toynbee? His review of civilizations reveals that societies decline and fall when the internal proletariat grows both large enough as a percentage of the population, and also does not share in the bounty of the society.
 
So if you get a larger and larger population of disempowered who do not share in the prosperity, eventually it will not matter how successful you have been because the barbarians within the society will bring it down. And you will be fighting your fellow Americans for whatever crumbs you can secure for yourself.
 
It would seem that the prudent course of action would be to discover ways to include the disempowered into becoming participants in the economy rather than being just parasites as you classify them.  One of the ways to do that might just be to provide a subsidy for health care insurance like the government already does to those who have employer provided coverage.
 
It is quite another discussion to try to "fix" the problem of excessive health costs in the US as compared to all other developed nations who have a health care system that is primarily administered by the government of the nation. The US hybrid system seems best in creating perverse incentives to maximize treatments in order to maximize payments and profits for the entities involved. Thus we have the administrative arms race where the billers seek maximum return, and the armies of deniers within the insurance industry fight back to minimize payment. Thus we have 20-25% administrative cost built into our system.
 
 
Mike Haluska Added May 17, 2017 - 5:05pm
Clock - your assertion:
 
"So if you get a larger and larger population of disempowered who do not share in the prosperity, eventually it will not matter how successful you have been because the barbarians within the society will bring it down."
 
assumes that prosperity is not spread across all economic levels in Free Market Capitalism.  The disparities in income and wealth in the US are NOT due to FMC but due to government interference and attempts to "force outcomes".  Prior to FDR, America rose from a backwater agricultural nation to the most prosperous nation with highest standard of living in human history! 
 
Why?  Because for the first time in human history the government stepped out of the way of ordinary people and let them pursue their own separate interests and dreams.  For the first time in recorded history ORDINARY PEOPLE became wealthy through their own efforts starting with NOTHING!  Name ONE other nation that can make that claim on any scale close to America.
Mike Haluska Added May 17, 2017 - 5:11pm
Clock - your suggestion:
 
"One of the ways to do that might just be to provide a subsidy for health care insurance like the government already does to those who have employer provided coverage."
 
is brilliant!  Hand outs ALWAYS result in producing people with self-motivation and initiative!  Making everyone "equal" reminds me of the Ukrainian steel worker who was asked by a Western reporter why the USSR steel mill workers had such low productivity?  The Ukrainian steel worker's response:
                        "they pretend to pay us, we pretend to work"
wsucram15 Added May 17, 2017 - 7:47pm
Clock..ignore Mike, he is an angry man and as usual he is over reacting.
Well written and concise. Take the negative nancys  with a spoon of sugar and move on..its just an article and they are just people looking for someone to put down to make themselves feel good.
Dino..nice comment.
Utpal..I earned my healthcare, for 40 years working, can you say the same? Also I still pay for some of it..
 
Mike Haluska Added May 18, 2017 - 12:14pm
You can always tell the people accepting handouts because they always try to rationalize their parasitic behavior by claiming they're "entitled" or they somehow "earned" the right to have a doctor serve them for free or have someone else pay.  You want charity - fine, I will be glad to help anyone.  Just don't try to shame me or anyone else into thinking I am somehow obligated to pay your bills.

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