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Friday, November 20, 2009

$850 Billion. Oh, the horror, Oh, the humanity!

Time for a little perspective perhaps? That's over 10 years, so it's $85 billion per year -- out of a Federal budget calling for $2.8 trillion in 2010. That's about 3% of the Federal budget, and about one-half of one per cent of GDP, to solve the biggest problem of the generation!

The U.S. has about 150 million taxpayers. That $85 billion per year amounts to $47 dollars per month on average for every taxpayer. Yes, that's 47 Dollars and 00 cents.

But, of course, nobody is proposing any increase in Federal taxes on middle class or below. Sometimes the formula is a surtax on incomes above $250,000, sometimes on income above $500,000. Under those proposals, the cost will be borne by those already paying tens of thousands of dollars or more in taxes (on their hundreds of thousands or more on income). The main purpose of any revenue increase in these healthcare bills is to help people who otherwise cannot afford it to buy insurance in the new system.

Let's take someone making $1.5 million in taxable income – maybe $2 million actual gross (the answer to the question, “How much do you make?”) before adjustments, exemptions and deductions. That person might pay $500,000 in taxes. So if we suppose for this person the added liability to help low income people protect themselves against financial devastation due to a health problem is 30 times that $47 per taxpayer average amount (we are being very rough here for thinking purposes), those taxes go from about $500,000 to $517,000. The net after taxes of real income is $1.483 million instead of $1.5 million.

Oh, the humanity! Will Humana and Wellpoint CEOs be able to survive such rampant populism? At least the Blue Dogs from the states that once were the center of American populism are looking out for those poor babies.


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