Holes in Baucuscare

Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

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13 Responses

  1. Bob Cheeks says:

    Gummint should not be allowed anywhere near health care, better a bloody insurrection…fewer people hurt and maybe the armed forces would join us!Report

  2. Brian says:

    I’m missing something here. These families are getting zero assistance with their health-care coverage now. So because they’d be getting less assistance than families with lower income, this is considered an implicit tax on them? How’s that work? Won’t they still be better off than they are now?Report

    • Andy Smith in reply to Brian says:

      Yes, I wanted to make the same point. Whether you call something a subsidy or a tax depends on your point of view. When I see someone using food stamps in the grocery store, I don’t regard it as my paying a tax to buy the same food. As long as the person is in genuine need and trying to find employment (one or both of which assumptions may not always hold, but that’s for another discussion), I don’t have a problem. Similarly, if I’m paying no more for health insurance under this proposed new plan, it doesn’t bother me that someone else is paying less than I do. I’m not really familiar with the details, but from what I’ve seen, these middle income families would not be paying more for health insurance, they would most likely be paying less. I can’t conceive of any plan that insures people currently uninsured that does not give a break like this to people with low income.Report

      • E.D. Kain in reply to Andy Smith says:

        The problem is they will be forced to pay for it. Right now if you’re a family of four making $40,000 you might be living paycheck to paycheck depending on expenses, depending on cost-of-living in your area (which varies remarkably across the country). Adding another $6,000 to your bills might not be possible. And maybe $6,000 will be possible, but what if costs aren’t contained and the prices need to go up. What if it becomes $10,000 unsubsidized. A lot of families at that income level might not have an extra $10,000 lying around, not to mention the co-pays and out-of-pocket expenses on top of that. What I’m arguing for is a better sliding scale, that’s all, and nation-wide inclusion in the exchanges as Sen. Wyden has proposed.Report

  3. I’d like to see two things happen:


    And second?Report

    • Right that wasn’t clear at all was it?

      First – cost controls; second – wider inclusion in the exchanges and more generous subsidies (I think all three work together, with higher competition and inclusion in the exchanges bringing down costs and increasing our ability to raise subsidies).Report

  4. Nob Akimoto says:

    It’s an “implicit tax” because of the added feature of mandates. Meaning that despite the subsidy they have to pay out an extra amount of money they otherwise wouldn’t. Then when you factor in that they lose their subsidy as they make more money, this becomes a tax on their additional income because they’re losing subsidy money simply by virtue of actually earning money.

    And I agree, the subsidy level should be well over 300% poverty line in the league of 400-500%, and I also agree about the Wyden amendment.Report

    • Andy Smith in reply to Nob Akimoto says:

      You mean that people who currently have no health insurance have to pay for it? If that’s what you mean, I can only point out they are paying no more for it–if I understand the figures–than they would have paid if they had had it before. It’s only an implicit tax in the sense that they no longer have the choice about whether to have the insurance or not. But they are getting value for their money. It’s not like an income tax, which doesn’t buy the payer anything at all.Report

      • E.D. Kain in reply to Andy Smith says:

        That’s a good point, Andy. Though we also have to consider that this is money that is no longer being spent on other sectors of the economy as well. This will take money people may have been spending on any number of other things out of the economy.Report

  5. steve says:

    Nice to divide up numbers to make things worse. What you really need to do is compare what that $48,000 family without insurance is now paying in out of pocket costs vs $7,400 they would pay under this plan. You should also then compare this with the costs for what the families at this income level are paying for insurance now.

    Next, you should look up how much much families at this level actually pay in income tax. All these numbers are pretty easy to find. Now, if you just want to stop subsidizing the poor, the real point he is making here, just say so. This whole thing was pretty disappointing. Reihan used to have a brain.


    • Ryan in reply to steve says:

      I’m with Steve. This is incredibly sloppy accounting. That 30% number is completely invented by just choosing two numbers at random and dividing. Getting $7,400 less for making twice as much money isn’t a tax unless that’s actually my money in the first place – which it isn’t. Getting $9,072 in subsidy is actually a fairly large *negative* income tax – using the division method above, 9072/48000 = approx. 19%. I actually get a tax benefit of 19% (which is smaller than I would get if I made half as much, yes – welcome to progressive taxation).

      If you want to take into account the ways that the mandate changes the math here, you’d have to do what Steve suggests above. Calling it a 30% tax, though, is just incredibly stupid math.Report