We are going to end up with the most financially expensive health plan:

We are going to end up with the most financially expensive health plan:

Two separate pools:

1. Healthy people will buy less care and pay smaller premiums

2. All chronically sick or in need will be lumped together in the "sick pool". This will be very expensive as there are no longer healthy people to spread these costs around. So the premiums will be HUGE. Cruz know this. So Cruz is proposing that the government simply pays these premiums. To private insurance companies.

So get this.

The fiscally responsible republicans are rejecting the concept of spreading the costs of insurance across all members.

Instead they will simply spend our tax dollars directly on this expensive sick pool.

This is a Frankenstein mish-mash where the "healthy will not have to pay for the sick". Except of course you do through your taxes.

And there will be no negotiation, no bargaining or price constraints that you would get whenever buying anything in bulk.

Instead the private insurance companies will charge whatever they feel like, and the federal government is going to pay for it.

This is actually how it is going down.

Why?

It is the only solution that fits the GOP platform.

Controlling all three branches of government and given their jackassery of the last 9 years, the MUST repeal Obamacare or their partisans will put their heads on spikes.

They know they cannot cut-off health insurance to the 20+ million in the sick pool as the majority of these are in their very own red states. And again heads on spikes.

They instead they are actually going to go for SINGLE PAYER / UNIVERSAL HEALTHCARE. The Republicans.

But the most expensive, stupid way to spend the money. Let the private health insurance companies charge whatever and soak the taxpayer.

Oh, and do not forget, who is going to pay these taxes? Not the rich. It is all the folks who actually work for a living and have a W2. PAYROLL taxes are now the #1 source of revenue for the Federal budget. Not income taxes, not corporate taxes, not excise taxes. Payroll taxes.

When America was founded what were the taxes? (Think about Boston and Tea)

We used to fund the whole country on excise/import tariffs. You want to bring in stuff and profit off the American citizen? Pay a cover charge.

That worked for the first 150 years, and would have kept on working. Except for wars. Wars are very expensive. We had an income tax briefly for the Civil War, and then starting in the 1920s we had a tiny tax on income for the truly wealthy. But in WW2 boom income got taxed hard for the first time.

And after WW2 the income tax stayed high, but still corporate taxes were the largest source of income. Payroll taxes were tiny.

Rich people do not have W2s. They have 1099s. The do not payroll taxes.

Think about that for a bit.

One young man inherits $1m from his father, and follows basic orders and leaves it in an index fund and makes 8% a year, or $80k. It is on a 1099. So he pays NO payroll taxes. He also does not pay the progressive income tax. Instead he pays the much lower capital gains tax of 15%.

But a young woman who worked two jobs and took on student loans to get an engineering degree and now works at a big tech company (outside of SF) gets started at $80k a year. She has to pay payroll taxes AND she has to pay income tax.

We literally tax people who work harder than those people who do not work.

And I am the liberal, progressive snowflake? Fuck that. I am fiscally conservative.

We should collapse all forms of income into a single type. Let's call it - income. No short-term, long-term, dividend, capital gains, passive, blah blah blah. It is just fucking income.

Then wrap a progressive tax structure on income.

Kill all payroll taxes.

Take our corporate tax rate DOWN to 15%. Because the huge Fortune 100 have opted out of paying taxes, and so the current 35% tax is a massive assault on small and medium companies where "our" transnationals are playing with a stacked deck against the up and comers. (Who by the way create all the new jobs.)

Introduce universal healthcare / single payer and relieve our business from having to deal with this huge expense. And relieve our citizens from medical debt rents and lack of care.

About that progressive income tax. What should the brackets be? And how high should the rates be for each bracket?

Despite the complexity of the overall topic, this is actually not that hard to figure out how to do.

All Republicans and most Democrats believe/acknowledge that large governmental bureaucracies do not manage costs as well as a tightly managed private company. Even I - a hardcore liberal - agree. The government has a lot of waste when they spend our tax dollars.

This is a critically important point when deciding what the first bracket should be. Should the first $6k, $10k or $15k or ? Be Zero-tax?

Americans are now saving a little more than they used to, but still very few save, and most save not much.

Two sources:

http://www.businessinsider.com/chart-savings-rate-by-income-level-2013-3

http://www.financialsamurai.com/the-average-savings-rates-by-income-wealth-class/

The first two quintiles - 40% of Americans save ZERO. In the other chart the bottom 90% save ~ 5% of their income.

Why should we tax people money, and then have them in debt, then give the tax dollars to congress critters to screw around with? It is silly. We should allow the FREE MARKET to allocate these dollars. See? Who is the Free Market advocate now? Who is the snowflake again?

The first $33,000 are the bottom 40%. They should absolutely not be taxed. No income taxes. No payroll taxes. otherwise it is just WASTEFUL government spending denying the FREE MARKET from doing its efficient thing.

Then you have the next two quintiles - those that make $60k a year and those that make $90k a year. They are saving at about 6% of their income.

So of the $60k group, they are saving $3600 a year, and those that make $90k, $5400.

Yet both are paying income and payroll taxes - and they are in debt with mortgages and student loans and attempting to be consumers and spend on their credit cards, small business loans and so on.

It is silly to tax these people, as they are already in debt. And again why have the government wastefully spend this money?

So I argue the first bracket should START at $90k. Heck, let's round it to $100k.

First $100k, tax-free. From any income source - rentals, capital gains, dividends. Or gasp actual work.

Then start creating more brackets above the $100k:

$0-100k - 0%

$100-150k - 10%

$150-200k - 20%

$200k-500k - 30%

$500k-$1m - 35%

$1m+ 39%

Something like that. Tweak the rates inside the brackets until your total federal revenue of the new system equals what the old system produced before under payroll, income and corporate taxes.

Who would benefit?

Everyone. Including the 0.1%

Why?

Everyone now has healthcare and the government uses its enormous size to control costs. The wealthy still can use their extra cash and go to any private doctor they want, when they want.

All businesses no longer have to stomach seeing rates increase year after year. Or spend money administering plans. Rolling them out. Changing plans. I hated the DAYS of productivity that were stolen from my companies over healthcare bullshit.

All small and medium business now enjoy a 15% tax rate that makes a small or medium American company on an even-playing field with the transnationals and foreign companies. This is incredibly important. The 35% tax rate on businesses is BAD (tm).

Those earning less than $100k a year would see a HUGE burden of payroll and income taxes lifted from them. We could even trim the IRS because suddenly only 20% of Americans even need to file! And with all of the various forms of income normalized to simply income, filing is going to be pretty fucking simple.

Now instead of these tax dollars being wasted by government, they will spend it in the market. Pay off debt. Buy fishing boats, go one vacations. Go to school. Whatever. They spend money. Economy GROWS!

We spend 18% on healthcare, we would spend 10% with true universal healthcare. That is 8% savings. With the above tax-plan, the bottom 90% would have about 10% more money to spend. The small and medium companies would be much more profitable and be able to expand, etc. etc.

We would see something like 10-20% growth if we were able to instantly roll-out these changes. And that does not even take into account the velocity of money as it turns over multiple times a year. That $100k of money might change hands 5x in a year and not once get taxed! That is Economy GO-GO juice.

Even the huge Fortune 100s would benefit from all these consumers buying a lot more crap.

So is it just win-win-win? Why is this a no-brainer?

Because there would be some losers.

A very specific set of people would lose. Those that rent their money and do no work.

These folks skip out on almost all taxes and those at the top of their game, offshore it in trusts and do get away with no taxes.

These folks would now have to pay taxes on their profits from renting money to citizens and businesses that are actually working and producing stuff.

And are we taking more from them than someone who works? NO! Just taking from them the SAME amount as a tech entrepreneur that worked her ass off and founded a successful company and is now making a great income.

Notice that I never made an appeal to fairness or morality? The above policies are simply cold-blooded, free-market facing logic. What tax-policy would cause the greatest economic growth? What tax-policy would minimize wasted government spending?

Huh - what a minute. You never cut a government program, the government is still wasting the SAME amount of money right?

Well. Yes, they are spending the same number of dollars. But by taxing incomes well over $100k, we would actually only be taxing the IDLE cash being saved at the top. These folks have surplus cash and do not know how to use it themselves to buy property and build something, or create or expand a company, or otherwise DO something with the cash. They are out of ideas so they rent that money out to other people. That is fine. Sure, I respect earned income more than passive income. Everyone does. And sure I have passive income and I am renting my money out right now. I have no problem with renting money out. I have a problem with renting of money being at a LOWER tax rate than working for money.

But, but, what about the retirees that need to live off their passive / un-earned money being rented out?? Remember the $100k bracket? Unless grandma has more than $1m of cash she is not paying ANY taxes, let alone the obscenely low 15% rate.

There are no losers. Sure the rentiers would pay more taxes, but by definition of the brackets they have plenty of money that they do not know how to use. Let's give this idle/dumb money to the congress critters. That way we do not slow-down our economy needlessly. By the magical of compounding gains, even these idle rich will continue to get richer. And their portfolios will grow with the economy.

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Originally posted on Facebook on July 10, 2017.