Health care reform: A simple explanation

[RaZor]

Insurance is supposed to cover catastrophic events that you HOPE will not happen, but that you want to be prepared for in the event that they do. There is no guarantee that a hurricane will hit Florida even once a year, or if it does hit, that it will be strong enough to demolish your house, or do serious damage to it. But you are paying a premium for protection against an event that you hope will not happen.

 

Here in Pennsylvania, we don't experience the full fury of hurricanes, but people still buy homeowner's insurance to protect against fire or flood. Even though not one of the people I know - either among friends or family members - has had their house burn down or lost their home in a flood. But they all have protection against those events, just in case.

 

Meanwhile, EVERYONE gets sick with minor illnesses at some point in their lives, and regular check-ups at the doctor, dentist and eye doctor are supposed to be the norm for all of us. In other words, these are not unforeseen events. This is not comparable to homeowner's insurance against natural disasters or unforeseen tragedies (fire and flood, for example). This is more like a regular maintenance for your car.

 

Imagine what your car insurance premiums would be if your automobile insurance policy were expected to cover oil changes, regular maintenance, unforeseen accidents and car theft.

 

To take the comparison one step further, does your homeowner's policy cover repainting the exterior, cleaning out the rain gutters or having the heating and cooling system checked out every year? Ours certainly doesn't.

 

If you were limiting the discussion to health insurance against catastrophic illnesses - cancer, heart attack, stroke, ALS - you'd have an apt comparison to your homeowner's policy. There are lots of people who never have those diseases or conditions, but they would like to be insured in case they do contract them, so that their assets won't be wiped out in paying for the treatment regimen. But you aren't limiting the push to that type of plan, and neither is President Obama or other proponents of health care reform.

 

So your initial comparison is inaccurate.

Well, I guess to be fair - you are probably not aware that insurance companies are indeed requiring homeowners (and businesses) to update their homes/buildings . . . in certain parts of the country. . . it started several years ago . . . and is increasing.

 

For instance, it started in Florida (and will continue in all of the states that border on the Gulf of Mexico and up the eastern coast from Florida up to the upper mid-Atlantic). Insurance companies now feel that they can dictate how long a roof will last. I can get a new roof that has a 30 year (even a 50 yr) guarantee . . . but insurance co.'s are now mandating that once a roof is 15 years old . . . is becomes a high risk . . . insurance-wise. Recently they have added mandating plumbing and electrical updates to current standards to acquire insurance coverage (as you put it homeowners). Painting the exterior mandated by an insurance company (or place you in a high risk group/pool)? Oh yeah, it's already here.

 

Of course, that is different than yearly check-ups at the doctor or dentist, but try calling up a plumbing or electrical firm and get an analysis of bringing your entire house up to the latest standards.

 

Oh, but you may say, my house is per code and standards. I don't know about PA, but they have made many changes along those lines in recent years. For instance, let's say you have an electrical water heater. It now has to be hard-wired -- the cord and 220 plug no longer meets standards. If you cannot visually see the electrical circuit-breaker panel from the WH, the hard-wired connection must have a switch. Seems like small stuff, eh? If you have the old screw-in fuses . . . upgrade electrical to circuit breaker (specified service minimums) with all circuits meeting the standards . . . if not, a re-wiring job. It's not the gov'ts that are forcing this (here) . . . it's the insurance companies.

 

Guess what, insurance companies now are checking for adherence to these updates. . . in the underwriting process. If your home is over 15 years old . . . many won't even underwrite a policy. What does that sound like to you? See any connection there?

 

Fortunately, I did a complete renovation of my home in the last couple of years and accomplished all of that and passed the wind-storm rating analysis with flying colors (even though my tile roof is 17 years old). But I fully expect to have to re-roof before too many years pass(at a cost of $35K this year - can count on it being more in a few years)

 

My insurance agent told me that this insurance "trend" is starting with the Gulf & Atlantic Coasts . . . but will become a nationwide issue in the not-to-distant future. In recent times most insurance companies do not cover for mold damage, or sink-holes, and all sorts of calamities - that were all covered just ten years ago. Of course, you know that flood damage is not covered by almost all (homeowners) insurance companies throughout the country - you have to buy a separate policy for that.

 

You may have heard of the battles with insurance companies after Katrina (we had them too - here in Fla) over agents that told their clients that they were completely covered and then the insurance companies refused to pay one red cent after the insured lost their entire structure. Those battles are still going. What year was Katrina?

 

So for you, in Pennsylvania, or those in the Midwest (etc) you may not see a connection . . . but for me . . . there definitely is one. If I were to forced to do all of those updates (I know someone that did after he bought an investment property), it would easily cost me $70k + (it cost my friend over $200k).

 

I have always had excellent health and have paid my doctors/health incidental costs myself (I have a $5k deductible) for many years. Some people want their ins coverage to pick up all those sorts of things, some don't . . . that is the beauty of choice (of what is being proposed - more choices). Although homeowners in the past have not been required to perform "maintenance" and check-ups (etc) -- it is coming. Yes, and they (ins co) won't pay for that . . . the HO does. A decade ago, I would have said the same thing as you . . . but it's different now . . . and if what I hear is true, it is coming to your neighborhood . . . some day.

 

It's like the people/companies in Orlando. They were all convinced that hurricanes NEVER hit Orlando (probably like most in PA that think tornadoes will never hit PA) . . . right up to the time they had 2 blow through in the span of 2 weeks five years ago.

 

It was always said, that once hurricanes hit the coast that they rapidly loose their strength (drop a category as soon as they go onshore). Then along came Wilma -- it grew in strength (1 whole category) while over the middle (land) of the state. There are weather forecasters that predict that there will be hurricanes that hit the mid-Atlantic states . . . in the near future (can you imagine a Cat 3 or 4 proceeding up the Chesapeake Bay?). We are in the highest level of activity in the Atlantic over the last 1,000 years . . . so I wouldn't doubt it at all.

 

Guess it all boils down to different points of view . . . different experiences.

[fmccap]

We are in the highest level of activity in the Atlantic over the last 1,000 years . . . so I wouldn't doubt it at all.

I remember them saying that a few years ago and since it has been quiet.

[Ford Jellymoulds]

Insurance is supposed to cover catastrophic events that you HOPE will not happen, but that you want to be prepared for in the event that they do. There is no guarantee that a hurricane will hit Florida even once a year, or if it does hit, that it will be strong enough to demolish your house, or do serious damage to it. But you are paying a premium for protection against an event that you hope will not happen.

 

Why do they make timber frramed house's from balsa wood in Florida? We use mainly brick construction with cemented tiled roofs in the UK, we get hurricanes sometimes in the UK biggest problem is wooden fencing, you might hear of somebody having the odd roof tile coming loose.

 

The wolf huffed and he puffed and he blew the wooden house down.

 

The wolf huffed and he puffed and could not blow the brick house down.

[RangerM]

And if we only match their "Tariff" percentage to percentage - nation by nation?

We will be hurt just as much as they.

How would you fix the trade deficit? Or do you think trade deficits are not a problem?

Make it cheaper to conduct business here.

 

Eliminate all income (corporate and personal) taxes, and replace them with a consumption tax imposed at the retail level. NOT a VAT. VAT is too easy to hide.

[RangerM]

Why do they make timber frramed house's from balsa wood in Florida? We use mainly brick construction with cemented tiled roofs in the UK, we get hurricanes sometimes in the UK biggest problem is wooden fencing, you might hear of somebody having the odd roof tile coming loose.

 

The wolf huffed and he puffed and he blew the wooden house down.

 

The wolf huffed and he puffed and could not blow the brick house down.

The average home built in the U.K. between 2003 and 2006 was 818 square feet and cost over $350,000 (US)

 

The average home built in the U.S. in 2006 was 2430 square feet and cost $230,000 (US)

 

At that differential, I'd HOPE you're getting something other than screwed on the price.

[grbeck]

Well, I guess to be fair - you are probably not aware that insurance companies are indeed requiring homeowners (and businesses) to update their homes/buildings . . . in certain parts of the country. . . it started several years ago . . . and is increasing.

 

For instance, it started in Florida (and will continue in all of the states that border on the Gulf of Mexico and up the eastern coast from Florida up to the upper mid-Atlantic). Insurance companies now feel that they can dictate how long a roof will last. I can get a new roof that has a 30 year (even a 50 yr) guarantee . . . but insurance co.'s are now mandating that once a roof is 15 years old . . . is becomes a high risk . . . insurance-wise. Recently they have added mandating plumbing and electrical updates to current standards to acquire insurance coverage (as you put it homeowners). Painting the exterior mandated by an insurance company (or place you in a high risk group/pool)? Oh yeah, it's already here.

 

Of course, that is different than yearly check-ups at the doctor or dentist, but try calling up a plumbing or electrical firm and get an analysis of bringing your entire house up to the latest standards.

 

Oh, but you may say, my house is per code and standards. I don't know about PA, but they have made many changes along those lines in recent years. For instance, let's say you have an electrical water heater. It now has to be hard-wired -- the cord and 220 plug no longer meets standards. If you cannot visually see the electrical circuit-breaker panel from the WH, the hard-wired connection must have a switch. Seems like small stuff, eh? If you have the old screw-in fuses . . . upgrade electrical to circuit breaker (specified service minimums) with all circuits meeting the standards . . . if not, a re-wiring job. It's not the gov'ts that are forcing this (here) . . . it's the insurance companies.

 

Guess what, insurance companies now are checking for adherence to these updates. . . in the underwriting process. If your home is over 15 years old . . . many won't even underwrite a policy. What does that sound like to you? See any connection there?

 

Fortunately, I did a complete renovation of my home in the last couple of years and accomplished all of that and passed the wind-storm rating analysis with flying colors (even though my tile roof is 17 years old). But I fully expect to have to re-roof before too many years pass(at a cost of $35K this year - can count on it being more in a few years)

 

My insurance agent told me that this insurance "trend" is starting with the Gulf & Atlantic Coasts . . . but will become a nationwide issue in the not-to-distant future. In recent times most insurance companies do not cover for mold damage, or sink-holes, and all sorts of calamities - that were all covered just ten years ago. Of course, you know that flood damage is not covered by almost all (homeowners) insurance companies throughout the country - you have to buy a separate policy for that.

 

You may have heard of the battles with insurance companies after Katrina (we had them too - here in Fla) over agents that told their clients that they were completely covered and then the insurance companies refused to pay one red cent after the insured lost their entire structure. Those battles are still going. What year was Katrina?

 

So for you, in Pennsylvania, or those in the Midwest (etc) you may not see a connection . . . but for me . . . there definitely is one. If I were to forced to do all of those updates (I know someone that did after he bought an investment property), it would easily cost me $70k + (it cost my friend over $200k).

 

I have always had excellent health and have paid my doctors/health incidental costs myself (I have a $5k deductible) for many years. Some people want their ins coverage to pick up all those sorts of things, some don't . . . that is the beauty of choice (of what is being proposed - more choices). Although homeowners in the past have not been required to perform "maintenance" and check-ups (etc) -- it is coming. Yes, and they (ins co) won't pay for that . . . the HO does. A decade ago, I would have said the same thing as you . . . but it's different now . . . and if what I hear is true, it is coming to your neighborhood . . . some day.

 

It's like the people/companies in Orlando. They were all convinced that hurricanes NEVER hit Orlando (probably like most in PA that think tornadoes will never hit PA) . . . right up to the time they had 2 blow through in the span of 2 weeks five years ago.

 

It was always said, that once hurricanes hit the coast that they rapidly loose their strength (drop a category as soon as they go onshore). Then along came Wilma -- it grew in strength (1 whole category) while over the middle (land) of the state. There are weather forecasters that predict that there will be hurricanes that hit the mid-Atlantic states . . . in the near future (can you imagine a Cat 3 or 4 proceeding up the Chesapeake Bay?). We are in the highest level of activity in the Atlantic over the last 1,000 years . . . so I wouldn't doubt it at all.

 

Guess it all boils down to different points of view . . . different experiences.

 

I believe that the changes you are talking about are being driven by the Uniform Construction Code and the regular revisions to it. Pennsylvania adopted it around 2004...we were the last state to do so.

 

Also, the changes you are describing are not related to regular maintenace (i.e., cleaning rain gutters) but ensuring that the house is sound for a longer period of time (i.e., at least until the mortgage is paid), or better able to withstand major events. The root of the problem here is substandard construction with components that wear out quickly or that cannot withstand storms or hurricanes, so insurance companies are making sure that they can minimize their losses. You cannot, for example, build a house in the Miami metropolitan area the same way you build one in the Harrisburg area. I have the sneaking suspicion that many people DID do that for years, and received a rude awakening during one of Florida's severe storms.

 

I would think that homeowners benefit, too...the house is less likely to be destroyed in a major storm, and will last longer with higher quality components. Insurance companies probably don't want to insure older houses because they aren't built as well (probably before standards were toughened). If the house were upgraded, then the companies would probably cover it.

 

This is still different from health insurance to cover basic care. The big cost drivers here are an aging population that expects to receive the latest and greatest in care and technology at little or no increased cost. All of those wonderful new drugs or techniques cost money to develop and implement, and they aren't necessarily cheaper than what was used before.

Edited August 21, 2009 by grbeck

[RaZor]

Why do they make timber frramed house's from balsa wood in Florida? We use mainly brick construction with cemented tiled roofs in the UK, we get hurricanes sometimes in the UK biggest problem is wooden fencing, you might hear of somebody having the odd roof tile coming loose.

 

The wolf huffed and he puffed and he blew the wooden house down.

 

The wolf huffed and he puffed and could not blow the brick house down.

It is very difficult to build a wood-framed house in most parts of Florida - and it has been that way in the southern portion for round 15 years. You can still do it but you are talking about 2"x 6" (minimum - depending on length) wood studs. By the time you attempt wood frame, you're right at the cost of of concrete/steel reinforcement.

 

Of course, North Florida, esp the panhandle is way behind, as there were counties there that didn't even have effective building codes until just recently. When they got wiped out a few years back, people couldn't even rebuild & obtain insurance. Jeb was the governor at the time and he was more concerned about making ticket scalping legal, than mandating the whole state meet high velocity wind codes adopted in So Fla in 1994.

 

My home has been through at least a dozen and half hurricanes during its life and has never even suffered any damage . . . with the exception of around 12 tiles that were broken during Wilma when the neighbor (across the street) lost some barrel-tile roof cap tiles and they flew over and broke some of mine.

 

One of the big miss-truths that the ins industry perps on us is age determines a structures ability to withstand a storm. Total BS. Construction methods and materials determine that. We were exposed to 120+mph winds for over 28 hours a few years back when a storm stalled just east of us and the only thing that I lost was half-dozen trees. Zero damage to house. A couple newer homes in this neighborhood did receive damage.

 

FMC, we aren't even to the active part of hurricane season yet this year, remember hearing about Andrew (worst storm in US history) well that was first named storm of that year (hence the "A") and that occurred on Aug 29. The report was for the decade (btw)

 

Good thing for mid-Atlantic states that there is a cool front pushing east on the coast redirecting Bill to swing back into the Atlantic, or it could be the one that smashes into that area.

[Ford Jellymoulds]

The average home built in the U.K. between 2003 and 2006 was 818 square feet and cost over $350,000 (US)

 

The average home built in the U.S. in 2006 was 2430 square feet and cost $230,000 (US)

 

At that differential, I'd HOPE you're getting something other than screwed on the price.

 

Thanks for that

 

Average UK prices $350,000

 

You would be hard pressed to find a 1 bedroom Flat/Condo the size of a walk in wardrobe in Florida in my area for $350,000. Still a least it won't blow away up the next road every time Hurricane Bill passes through.

 

Good point, you win l give you that one.

[Ford Jellymoulds]

It is very difficult to build a wood-framed house in most parts of Florida - and it has been that way in the southern portion for round 15 years. You can still do it but you are talking about 2"x 6" (minimum - depending on length) wood studs. By the time you attempt wood frame, you're right at the cost of of concrete/steel reinforcement.

 

Of course, North Florida, esp the panhandle is way behind, as there were counties there that didn't even have effective building codes until just recently. When they got wiped out a few years back, people couldn't even rebuild & obtain insurance. Jeb was the governor at the time and he was more concerned about making ticket scalping legal, than mandating the whole state meet high velocity wind codes adopted in So Fla in 1994.

 

My home has been through at least a dozen and half hurricanes during its life and has never even suffered any damage . . . with the exception of around 12 tiles that were broken during Wilma when the neighbor (across the street) lost some barrel-tile roof cap tiles and they flew over and broke some of mine.

 

One of the big miss-truths that the ins industry perps on us is age determines a structures ability to withstand a storm. Total BS. Construction methods and materials determine that. We were exposed to 120+mph winds for over 28 hours a few years back when a storm stalled just east of us and the only thing that I lost was half-dozen trees. Zero damage to house. A couple newer homes in this neighborhood did receive damage.

 

FMC, we aren't even to the active part of hurricane season yet this year, remember hearing about Andrew (worst storm in US history) well that was first named storm of that year (hence the "A") and that occurred on Aug 29. The report was for the decade (btw)

 

Good thing for mid-Atlantic states that there is a cool front pushing east on the coast redirecting Bill to swing back into the Atlantic, or it could be the one that smashes into that area.

 

Thanks for that info, just packing my suitcase now.

 

Gotta say l enjoyed Florida at least you got the sunshine even if it is a bit commercial sort of place, l was a bit pissed off l didnot do the space centre last time we went. At least you don't develop webbed feet like we do in the UK it never stops raining here.

 

Hope Bill misses you and hits Nicks house instead

[napfirst]

Thanks for that info, just packing my suitcase now.

 

Gotta say l enjoyed Florida at least you got the sunshine even if it is a bit commercial sort of place, l was a bit pissed off l didnot do the space centre last time we went. At least you don't develop webbed feet like we do in the UK it never stops raining here.

 

Hope Bill misses you and hits Nicks house instead

I live near the coast in Va...we are expecting 10-15 ft. swells all weekend....good for surfing....

[Ford Jellymoulds]

I live near the coast in Va...we are expecting 10-15 ft. swells all weekend....good for surfing....

 

Newquay is the surf capital of the UK they have 1.3 to 1.7M waves all this weekend with temperatures hitting 66F this weekend.

LINK

 

I live close to the River Thames the swells not to good here about 1/2" an inch, so l won't be out surfing this weekend.

[NLPRacing]

We will be hurt just as much as they.

 

Make it cheaper to conduct business here.

 

Eliminate all income (corporate and personal) taxes, and replace them with a consumption tax imposed at the retail level. NOT a VAT. VAT is too easy to hide.

 

You're a "Fair Tax" kind of guy, huh? You must of been sad when Huckabee lost the primary. You think outsourcing happens because of income taxes? Do you think a 23% federal sales tax is "Fair" (Link - FairTax.org)? Don't get me wrong, I am intrigued by the Fair Tax plan. In theory, it sounds good. But if implemented, I'm not sure how fair it would actually be for people making less than $100,000, $50,000, or $25,000 a year. Is there a country that currently uses a "Fair Tax" kind of system?

[jpd80]

You're a "Fair Tax" kind of guy, huh? You must of been sad when Huckabee lost the primary. You think outsourcing happens because of income taxes? Do you think a 23% federal sales tax is "Fair" (Link - FairTax.org)? Don't get me wrong, I am intrigued by the Fair Tax plan. In theory, it sounds good. But if implemented, I'm not sure how fair it would actually be for people making less than $100,000, $50,000, or $25,000 a year. Is there a country that currently uses a "Fair Tax" kind of system?

It depends how you define "Fair".

 

Should a tax be broad based so that the tax net is spread as wide as possible

making tax rates cheaper for business but adding tax burden to private citizens?

 

OR

 

Should the tax system reflect capacity to pay and have a sliding scale on income

charging businesses more and enabling less tax pressure on private citizens?

 

Not that simple is it.

Edited August 21, 2009 by jpd80

[NLPRacing]

It depends how you define "Fair".

 

Should a tax be broad based so that the tax net is spread as wide as possible

making tax rates cheaper for business but adding tax burden to private citizens?

 

OR

 

Should the tax system reflect capacity to pay and have a sliding scale on income

charging businesses more and enabling less tax pressure on private citizens?

 

Not that simple is it.

 

When I was saying "Fair", I didn't mean it in the sense of the definition of fair. I was referring to the tax plan described on www.FairTax.org

[RangerM]

You're a "Fair Tax" kind of guy, huh? You must of been sad when Huckabee lost the primary. You think outsourcing happens because of income taxes? Do you think a 23% federal sales tax is "Fair" (Link - FairTax.org)? Don't get me wrong, I am intrigued by the Fair Tax plan. In theory, it sounds good. But if implemented, I'm not sure how fair it would actually be for people making less than $100,000, $50,000, or $25,000 a year. Is there a country that currently uses a "Fair Tax" kind of system?

Several countries have no income tax, but I think they are mostly Middle Eastern where the oil revenues largely substitute. The closest thing I can think of is states with no income tax: Florida, Alaska, Texas, Nevada, Washington, South Dakota, and Wyoming. Tennessee has no personal income tax, and relies on higher sales taxes, however without a way to enforce the sales taxes from goods brought in from surrounding States (like the U.S. can with imports), it may not be a good example.

 

"Outsourcing" happens because the company in question determines that the cost of doing business in their current country of operation is too high to allow for profit. This can originate from many factors. They include the cost of labor, raw materials, taxes and the cost of compliance, transportation, energy, environmental regulation, or other unspecified regulatory considerations.

 

The theory behind the FairTax is the more you spend, the more taxes you pay. Buy a Lincoln instead of a Ford? Shop at Macy's instead of JCPenney? You'll (probably) pay more in tax.

 

Usually the goods that people can afford (or purchase) is related to their ability to pay, and by extension their income.

 

The goal (the way I see it) behind the FairTax is two-fold. Revenue neutrality and making taxes transparent. The idea is that instead of paying the taxes that are hidden in the cost of everything, it's right out in the open where you can see it (on your receipt), and since it's intended to be revenue-neutral, you wind up paying about what you were before.

 

The "pre-bate" is the great equalizer, in that everyone is only obligated to pay taxes on everything purchased above the poverty line.

 

Yes, I voted for Huckabee in the primary (partly due to his support of the FairTax). No, I wasn't happy he lost, but my team doesn't win everything, nor do I expect it to.

 

It depends how you define "Fair".

"FairTax" or "Fair Tax" in this usage is a proper name.

Edited August 21, 2009 by RangerM

[RaZor]

Personally, I don't think it has a chance of getting implemented because they have not addressed one critical area - circumvention. One example is services . . . as services are a sizable part of the economy (greater in recent years), they would have to be taxed and so far I haven't seen a way they would thwart negotiating away the tax . . . for cash payment.

 

An example is the guy that does the lawn, services your appliances, just about any service (as well as goods) . . . even an attorney performing relatively simple legal tasks. They ask how you want to pay - check, credit card . . . or cash. If cash, they will deduct the Fair (sales) tax. A very big enticement to do business off the books for typically around 30% discount. Why 30%? By the time you add states sales taxes (typ 4 to 8%) and the Fair tax (typ 20-25%) together. . . that's about where it will be. A big temptation for many on both sides of a transaction.

 

Wasn't there someone who complained that a border tax for imports could hurt sales of products? How about 20-25% additional for everything (like all cars) w/ the Fair tax -- and it still would not provide an incentive for domestic manuf to bring production home (or even foreign co's to manuf here instead of at home) and match what foreign countries have been doing to us for a long, long time. . . hurting our industry.

[RangerM]

Personally, I don't think it has a chance of getting implemented because they have not addressed one critical area - circumvention. One example is services . . . as services are a sizable part of the economy (greater in recent years), they would have to be taxed and so far I haven't seen a way they would thwart negotiating away the tax . . . for cash payment.

 

An example is the guy that does the lawn, services your appliances, just about any service (as well as goods) . . . even an attorney performing relatively simple legal tasks. They ask how you want to pay - check, credit card . . . or cash. If cash, they will deduct the Fair (sales) tax. A very big enticement to do business off the books for typically around 30% discount. Why 30%? By the time you add states sales taxes (typ 4 to 8%) and the Fair tax (typ 20-25%) together. . . that's about where it will be. A big temptation for many on both sides of a transaction.

 

Wasn't there someone who complained that a border tax for imports could hurt sales of products? How about 20-25% additional for everything (like all cars) w/ the Fair tax -- and it still would not provide an incentive for domestic manuf to bring production home (or even foreign co's to manuf here instead of at home) and match what foreign countries have been doing to us for a long, long time. . . hurting our industry.

What you've said is certainly true, to an extent, however even monies earned from illicit sources (drug dealing, prostitution, etc) will eventually be spent at a retail store, or service. At that point, the money from that "underground economy" is subjected to the tax.

 

Yes, it's true that the person who performs a service could circumvent, however he still has to buy his goods from someone else. At that point the money is taxed. The day laborer he pays "under the table"? Yup, when spent at the Walmart, it's subject to the tax.

 

It was me who said tariffs would hurt trade. It still holds true, because the tax is instead of, NOT in addition to. Imports are taxed when they're bought, not when they're imported.

[jpd80]

When I was saying "Fair", I didn't mean it in the sense of the definition of fair. I was referring to the tax plan described on www.FairTax.org

OK, read the plan.

I am more concerned with how the government spends its money than how it's collected.

That being said:

 

1. Undocumented residents cannot avoid paying tax...Good

2. So long as the prebate schedule is adequate and indexed I see no problem.

Edited August 22, 2009 by jpd80

[mikem12]

and one statemet from Michigan Demo on healthcare

 

[macattak1]

and one statemet from Michigan Demo on healthcare

 

 

Right on!

 

Peace and Blessings

[Mark B. Morrow]

and one statemet from Michigan Demo on healthcare

 

 

 

He's not a Democrat, he's a Republican parroting the party line.

[mikem12]

He's not a Democrat, he's a Republican parroting the party line.

 

 

Really, from what I watched he was parroting the bill before congress.

[Ralph Greene]

Economists say health care costs are increasing 12% per year in the US. At that rate, in 6 years (rule of 72), health care costs will double again. Of those folks who say they like the status quo, I wonder how many of them understand they won't be able to afford their premiums or any healthcare in the not so distant future.

 

I think our politicians, for all their politicking, do understand this urgency. So some changes will probably happen. We'll see if they do any good. But what amazes me is how those most likely not to be able to afford any health care or premiums in the future, are some of the ones howling the most for status quo.

[RaZor]

What you've said is certainly true, to an extent, however even monies earned from illicit sources (drug dealing, prostitution, etc) will eventually be spent at a retail store, or service. At that point, the money from that "underground economy" is subjected to the tax.

That’s the best part of the proposed plan. There are just too many people in this country that still don’t realize that there are some things that a certain portion of all societies will always do (drugs & prostitution) and that Prohibition did not work and only gave crime syndicates a big in-road in our society (that they still enjoy to this day to some extent) and that the only way you can combat drugs, is to take away the huge profit basis of them. De-criminalization/legalization is the only thing that can do that, would raise (if properly taxed) money to combat the use (abuse) of them, and help eliminate the criminal element.

 

That also applies to prostitution. They call it the oldest profession for a reason. Legalizing it, regulating (health checkups etc), taxing (user fees) it (self pays for regulation), would greatly reduce the crime element involvement and certainly reduce health concerns. That was the way it was in the Nam. The Army did monthly medical test for all girls in surrounding villages (they had to register if they chose that as a source of income) and if she failed, she was taken off the block. With the “Black Syph” prevalent over there, they had to do it. It also makes it so the girls think twice about taking extra $ for allowing non-use of protection. . . as, if they came down with something . . . they loose a lot more income.

 

But you’re right, that in lieu of sensible laws concerning both of those . . . this would get the job done. I knew several models in Detroit (before the war) when I was working for a commercial photo studio (that had Big 3 brochure contracts), and several of them were also professional call-girls, making hundreds of thousands of dollars of income per year from that line of work – and that was in the sixties. They never claimed that income.

 

Yes, it's true that the person who performs a service could circumvent, however he still has to buy his goods from someone else. At that point the money is taxed. The day laborer he pays "under the table"? Yup, when spent at the Walmart, it's subject to the tax.

 

It was me who said tariffs would hurt trade. It still holds true, because the tax is instead of, NOT in addition to. Imports are taxed when they're bought, not when they're imported.

The problem with thinking that circumvention is “OK”, is that it just furthers the notion that circumvention of the “Rule of Law” thinking of our citizens/residents is "OK" and at some point we become a lawless society, it costs revenue, and gives an unfair advantage to competitors that go by the law. And I’ll repeat. . . it costs revenue. Sure you get some when it’s spent . . . but we loose the revenue of the original transaction . . . remembering that the whole idea is “revenue”. It will fail miserably if it brings in less revenue than is needed and only result in a higher percentage tax.

 

The purpose of the “border tax” is to return the favor that these other countries having been paying us since WWII – undermining our own industry, jobs (is there anyone that doesn’t realize that jobs are paramount to economic recovery?), and the economic future of your offspring. Funny how all of a sudden, we hear conservatives now speaking words like ‘taxes that our children will have to pay’ (when you never heard that when $7 trillion in additional debt was being rung up during Bush’s admin – even when $12 billion in cash all of a sudden went missing as soon as it touched the ground in Iraq).

 

It would NOT hurt trade - one would to be naive to believe that. Do you actually think that all of these countries (Japan, S.Korea, Germany, China - to name a few) would actually draw back their imports into this consumer economy? Not at least now. Maybe someday when we no longer are the biggest (or, one of the biggest) consumer economy in the world - if we keep doing what we are doing. Then we won't matter. . . and it will be too late. It is pretty hard for them to cry or to call us protectionists (see above referenced countries) -- when THEY themselves are very strict protectionists.

 

Free trade has been a disaster. Free trade only exists in a balanced trade environment. Once there is a deficit to either side - then it no longer is Free trade - and there exists a winner and a loser. We have been a loser since the eighties.

 

We need to withdraw from the WTO as they are doing nothing more than raping us. It (Free trade) must be replaced with intelligent trade that prevents foreign predatory practices and better serves U.S. interests. And guess what? There is nothing wrong with protecting our own interests, is there? Our foreign policy has been built on that for a long time, why not apply that to our economic interests too.

 

I find it interesting that America is losing a major economics war by relinquishing management and control of the economy through effects of our balance of trade deficit, out-sourcing, subsidized in-sourcing and foreign tax benefits -- and that doesn't bother some. Funny how people that claim to be patriots are the same ones that place access to cheap foreign goods – even though it undermines our own country - ahead of defending ourselves in the economic war (that we are loosing). The same applies to illegal immigrants. . . hate them, get rid of them, thrown them out . . . but I like the “cheap tomatoes & fruits, meat (packing plants) and cheaper homes (construction workers)”. Nothing but doublespeak.

 

Personally, I think all undocumented people need to leave (before they can even apply for re-entry/citizenship) – but I also realize that tomatoes are going to cost me more – to achieve that. If I want to buy a BMW or a Lexus, or a plasma TV – I will have to pay more – so that this country doesn’t just fold up because we’re giving it all away. Guess what? If the American economy fails – there will be a domino effect on the world economy - as it too will also fail. Then where will we (even if it just our children) be?

 

OK, read the plan.

I am more concerned with how the government spends its money than how it's collected.

That being said:

 

1. Undocumented residents cannot avoid paying tax...Good

2. So long as the prebate schedule is adequate and indexed I see no problem.

Generally, I agree. First of all, how Federal gov't spending should be controlled is to start with legislation that eliminates states being able to gain more Federal funding than they put into the kitty. . . with exceptions for disasters and extenuating circumstances. They need to put their houses in order and get off the Federal teet. And then there is corporate welfare – it is welfare – no different than welfare for individuals. It must be ended (again, with the exception of critical industries) or greatly reduced.

 

So, I don't have a problem with the "Fair-Tax", but they need to work on it to overcome several deficiencies - which was my original point. Implemented as is, would just add to the problems of taxation IMO.

 

We just need to be smarter business-wise (holy crap the Communist Chinese are proving to be better capitalist than we are) and realize that there never has been a free market in this country (that was circumvented in the very first gathering of Congress ), Free trade does not exist, corporations are not more important than our people (it's "We the People" - not "We the corporations") and there undoubtedly needs to be a certain amount of oversight of business to ensure fair treatment of American workers and to reduce corporate fraud which has become rampant in the last couple of decades as a result of greed . . . and goes against the principles this country was founded on. Not too much - just enough so that we don't commit economic suicide.

[RaZor]

Economists say health care costs are increasing 12% per year in the US. At that rate, in 6 years (rule of 72), health care costs will double again. Of those folks who say they like the status quo, I wonder how many of them understand they won't be able to afford their premiums or any healthcare in the not so distant future.

 

I think our politicians, for all their politicking, do understand this urgency. So some changes will probably happen. We'll see if they do any good. But what amazes me is how those most likely not to be able to afford any health care or premiums in the future, are some of the ones howling the most for status quo.

Yeah, I find that ironic too (not to mention all of those seniors that do not realize that Medicare IS a Federal gov't provided and run insurance program) and

 

I have also noticed that this hasn't been responded to either

<responding to Napfirst's post>

I look forward to your explanation how we can continue to be the dunce of global trade . . . oh, and you still haven't responded to how you plan (as a business owner) to deal with HC cost growth for you and your employees - in your small business.

My guess is that if nothing is done and if that is the outcome -- that WHEN (costs double in 6 - 8 years) that happens, that they will blame Obama and the Dems for doing nothing to circumvent the economic crisis that will ensue when everyone (middle class that is) is spending 1 out of every 3 dollars that they earn on health care/insurance.

 

It sorta reminds me of those on this (and other places) forum that lambaste the fact that dealers haven't been paid yet as proof of gov't programs don't work or are inefficient. I guess it never dawns on them the mammoth undertaking that it would be to review each and every dealer app to CARS program before approving it for payment. What was there 250,000 in the first two weeks? And then that jumped up to near 700,000 after a couple more weeks? And of course, if the apps were not reviewed for accuracy and checks were just sent out . . . that would more proof of gov't bungling.

 

Besides the fact that it is clear that many apps were improperly filled out, just how many people would it take to review that many apps in such a short time? How many apps can be reviewed in a single day - by one person?

 

A local dealer stated on the local news that he has his staff working around the clock 7 days a week -- to complete 230 apps before the deadline. Then he had the gumption to wonder why it was taking so long to approve those apps.

 

Now I can understand people that have no experience in management (organizational complexities) - or even a mindset that cannot envision such things - but good lawd, have we all lost any semblance of common sense? Watching many of those idiots (protesters) on TV news makes me feel really bad for the world that my son and his family are going to have to deal with.

Edited August 24, 2009 by RaZor