[Speed Gibson,
Tuesday March 29, 2005 at 6:21am]
Fix Medicare First?
The Minneapolis Star Tribune urges that we fix Medicare first, since it is now experiencing negative cash flow, "cashing in" the "bonds" in their "trust" fund. But as with Social Security, there is no trust fund here, either.
In fact, the Medicare tax has virtually no relation to Medicare benefits. You turn 65, you're covered. There is no difference in benefits based on what you paid in. And yet, no one really complains about the Medicare tax.
Partially, this is because many aren't even aware of it, and many more think it's just the 1.45% shown on their pay-stubs. But the true rate is nearly double that due to the "employer" match that you really also pay.
I also believe that part of also is that it's the flattest tax in the land. There are no exemptions nor caps. Everyone pays the same percentage on earned income. There are no returns to file. And at less than 3%, there are bigger fish to fry like Social Security and Federal Income taxes.
What the Star Tribune wants, of course, is a tax increase. And you know, I might not object all that strongly. If we stop pretending Medicare is an "earned" benefit, admitting it is just a socialist welfare program, the need for this tax really goes away. Just pay for it out of the general tax collections, primarily the income taxes.
But in this age when fewer and fewer actually pay Federal income taxes, I like the idea of making sure everyone pays something. I'd rather just cut Federal spending, but that's clearly not going to happen no matter who runs Congress or the White House.
In fact, the Medicare tax has virtually no relation to Medicare benefits. You turn 65, you're covered. There is no difference in benefits based on what you paid in. And yet, no one really complains about the Medicare tax.
Partially, this is because many aren't even aware of it, and many more think it's just the 1.45% shown on their pay-stubs. But the true rate is nearly double that due to the "employer" match that you really also pay.
I also believe that part of also is that it's the flattest tax in the land. There are no exemptions nor caps. Everyone pays the same percentage on earned income. There are no returns to file. And at less than 3%, there are bigger fish to fry like Social Security and Federal Income taxes.
What the Star Tribune wants, of course, is a tax increase. And you know, I might not object all that strongly. If we stop pretending Medicare is an "earned" benefit, admitting it is just a socialist welfare program, the need for this tax really goes away. Just pay for it out of the general tax collections, primarily the income taxes.
But in this age when fewer and fewer actually pay Federal income taxes, I like the idea of making sure everyone pays something. I'd rather just cut Federal spending, but that's clearly not going to happen no matter who runs Congress or the White House.