Tuesday, April 01, 2014

Medicare Part B's income adjusted premium

This is where the haircut begins for those in the top half of the middle class.  Medicare Part B has an income adjusted premium that can range from the base of $104 a month to a high of $336 a month.  All participants have already paid in their income based Medicare taxed amount to the government over time, but some, in fact for the most part those who have already paid by far the most, now get to pay much more than others for the coverage.  Is there a question of fairness here, or one could ask if the Federal government is just grabbing money anywhere that the defenses are limited. The additional cost is of course not adjusted on a cost of living basis, a pet peeve here that will never change.

Over time we will see manifestations of this surcharge approach that will be related to other benefits.  It is likely that social security will eventually be subject to an income adjusted reduction or one based on total assets that a recipient has at their disposal.  This will happen regardless of the administration at the time, as Democrats will leap at any opportunity to raise taxes on those who have been reasonably successful and since Republicans see their main job as protecting the top half of the upper class that will cry but the overall impact on their well being will be negligible.  Despite their protestations, Republicans do not really focus on the middle class.

If this happens, and it is presumed here that it will, it again raises the question of fairness, in particular because social security was always described as a trust fund concept, not a taxation one.  Cost of living adjustment, blah, blah, blah...

Those that are poor will also continue to see pressure as they have so recently in the SNAP program, aka food stamps.  One can easily question whether all food stamp participants are those that should qualify or whether the program provides a disincentive to family creation and productive on the books work.  At the same time one could choose to also question the amount of tax relief given to hedge fund managers and private equity investors in the form of what is called "carried interest" for some reason.  It means that their earned income is taxed at lower capital gains rates rather than at income tax rates.  The cost of this subsidy for certain wealthy investors is far greater than any leakage around the edges of the food stamp program, so get a life you self righteous ones who whine about food stamps.  Food should be close to a basic right for a country as prosperous as the U.S A.


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