April 5, 2010--Financing Health Care Reform--Yes, Taxes
Pretty much every morning at the Owl one of my Republican friends wags a finger at me and says, "Obamacare will cost at least a trillion dollars and you'll see everyone will pay more taxes to bail it out."
They are right. It will cost about that much. But when I say, "That's true, but it's paid for. In fact, the independent, non-partisan Congressional Budget Office says that it will also save at least that much over the next two decades," when I say that they shoot me a look as if I'm crazy.
Since to them I'm besotted by Obama's charisma, they don't even bother to add, "This makes no sense, how can it cost a trillion but also save a trillion? That's BS and why everyone will be paying higher taxes."
If they were to say this to me I would respond, "Well, you're right about one thing--Americans will pay more taxes. That is some Americans. But not all. How does it sound to you that only three percent of Americans will pay more taxes? Only those making over $200,000 a year? I hope you are fortunate enough to have this problem.
"And," I would rush to add, "also according to the CBO do you know how much more in actual dollars families making between $200,000 and $500,000 will pay in new taxes? Go on, take a guess." I would wait to see what they might say, but since they would be trying to ignore me, I would answer for them, "On average just $560 a year. How does that strike you? Enough for you to join the Tea Party to protest the fact that these well-off folks will have to pay the cost of a few fancy dinners so that 30 million more Americans can get coverage and the rest of us will not go bankrupt while the current system spirals out of control?"
Actually, I do say these kinds of things even though they don't want to hear them.
I also point out that those making above a half a million a year will also be asked to ante up more. If you're fortunate enough to earn between $500,000 and a million, you'll pay an average of $5,200 more a year in taxes. And if you take in more than a million, expect to ante up $45,800.
And believe it or not, a full 74 percent of the money needed to fund the entire cost of health care reform will be born by those making at least a million a year. Like the top twenty hedge fund managers who last year made at least a billion each.
"So," I say, "if you want to scream and yell at town hall meetings for the sake of these guys, be my guest."
This rouses them, though they studiously avoid expressing public concern about increasing the taxes of the very rich, and they ask pointedly, "But what about the crazy thing you and your liberal friends keep saying about how it will cost a trillion but also save a trillion? You must have flunked arithmetic in elementary school."
Ignoring that jibe, I say, "Simple. To be exact, it will cost $965 billion over the next decade to cover the 30 million and close the prescription drug donut hole and allow children until they're 25 to remain on their parents' health insurance plans and to eliminate restrictions on pre-existing conditions and end caps on lifetime coverage and give tax credits to small businesses to offset the cost of offering coverage to their employees. All true. And all good things to do. Wouldn't you agree?" I am usually met with silence.
"So, that's how the trillion will get spent. But, then there are the savings that will phase in. Forty-nine percent of all that will be saved comes from limiting the growth of Medicare payments, cutting Medicare Advantage, reducing fraud and abuse, and a variety of other smaller things. And then the rest will come from taxing the top three percent that I just mentioned."
I pause to allow this to settle in and then add, "In total, these first decade savings and new taxes add up to $1.1 trillion which, if you subtract the decade-long additional cost of $965 billion, yields a savings of $135 billion.
"Are you still with me? I know this is higher arithmetic." Most of my friends eyes by then have glazed over. Not from the numerical complexities but rather because they don't really like these, to them, unsettling facts.
"Then during the second decade," I race on, "another trillion will be saved over the cost of the benefits. And by my arithmetic, which I didn't fail by the way, that adds up to $1.35 trillion in savings over the next 20 years. But, I will concede to you before you even feel the need to respond, yes, the out-year numbers get fuzzier and fuzzier. They are admittedly difficult to project. But these are the best, again non-partisan CBO figures. And even if they are off by a factor of fifty percent, saving half a trillion or so for us taxpayers isn't chump change."
I am usually met by more silence. "And if you don't believe me, which I know you don't since I'm a New York City socialist, don't take my word for it and go look the CBO numbers for yourself. Admittedly that's a lot of work, especially if your mind may already be made up, so if you go to the page I've linked below and click on the Multimedia chart, it's all laid out for you."
Since I'm on a roll, I can't help myself from adding, "If you want to talk with me about this and not just echo Republican talking points, this is your homework assignment. As I've said to you before, 'You're entitled to your own opinions, but not your own facts.'"
They are right. It will cost about that much. But when I say, "That's true, but it's paid for. In fact, the independent, non-partisan Congressional Budget Office says that it will also save at least that much over the next two decades," when I say that they shoot me a look as if I'm crazy.
Since to them I'm besotted by Obama's charisma, they don't even bother to add, "This makes no sense, how can it cost a trillion but also save a trillion? That's BS and why everyone will be paying higher taxes."
If they were to say this to me I would respond, "Well, you're right about one thing--Americans will pay more taxes. That is some Americans. But not all. How does it sound to you that only three percent of Americans will pay more taxes? Only those making over $200,000 a year? I hope you are fortunate enough to have this problem.
"And," I would rush to add, "also according to the CBO do you know how much more in actual dollars families making between $200,000 and $500,000 will pay in new taxes? Go on, take a guess." I would wait to see what they might say, but since they would be trying to ignore me, I would answer for them, "On average just $560 a year. How does that strike you? Enough for you to join the Tea Party to protest the fact that these well-off folks will have to pay the cost of a few fancy dinners so that 30 million more Americans can get coverage and the rest of us will not go bankrupt while the current system spirals out of control?"
Actually, I do say these kinds of things even though they don't want to hear them.
I also point out that those making above a half a million a year will also be asked to ante up more. If you're fortunate enough to earn between $500,000 and a million, you'll pay an average of $5,200 more a year in taxes. And if you take in more than a million, expect to ante up $45,800.
And believe it or not, a full 74 percent of the money needed to fund the entire cost of health care reform will be born by those making at least a million a year. Like the top twenty hedge fund managers who last year made at least a billion each.
"So," I say, "if you want to scream and yell at town hall meetings for the sake of these guys, be my guest."
This rouses them, though they studiously avoid expressing public concern about increasing the taxes of the very rich, and they ask pointedly, "But what about the crazy thing you and your liberal friends keep saying about how it will cost a trillion but also save a trillion? You must have flunked arithmetic in elementary school."
Ignoring that jibe, I say, "Simple. To be exact, it will cost $965 billion over the next decade to cover the 30 million and close the prescription drug donut hole and allow children until they're 25 to remain on their parents' health insurance plans and to eliminate restrictions on pre-existing conditions and end caps on lifetime coverage and give tax credits to small businesses to offset the cost of offering coverage to their employees. All true. And all good things to do. Wouldn't you agree?" I am usually met with silence.
"So, that's how the trillion will get spent. But, then there are the savings that will phase in. Forty-nine percent of all that will be saved comes from limiting the growth of Medicare payments, cutting Medicare Advantage, reducing fraud and abuse, and a variety of other smaller things. And then the rest will come from taxing the top three percent that I just mentioned."
I pause to allow this to settle in and then add, "In total, these first decade savings and new taxes add up to $1.1 trillion which, if you subtract the decade-long additional cost of $965 billion, yields a savings of $135 billion.
"Are you still with me? I know this is higher arithmetic." Most of my friends eyes by then have glazed over. Not from the numerical complexities but rather because they don't really like these, to them, unsettling facts.
"Then during the second decade," I race on, "another trillion will be saved over the cost of the benefits. And by my arithmetic, which I didn't fail by the way, that adds up to $1.35 trillion in savings over the next 20 years. But, I will concede to you before you even feel the need to respond, yes, the out-year numbers get fuzzier and fuzzier. They are admittedly difficult to project. But these are the best, again non-partisan CBO figures. And even if they are off by a factor of fifty percent, saving half a trillion or so for us taxpayers isn't chump change."
I am usually met by more silence. "And if you don't believe me, which I know you don't since I'm a New York City socialist, don't take my word for it and go look the CBO numbers for yourself. Admittedly that's a lot of work, especially if your mind may already be made up, so if you go to the page I've linked below and click on the Multimedia chart, it's all laid out for you."
Since I'm on a roll, I can't help myself from adding, "If you want to talk with me about this and not just echo Republican talking points, this is your homework assignment. As I've said to you before, 'You're entitled to your own opinions, but not your own facts.'"
posted by Steven Zwerling at
5:27 AM
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