Unfortunately, there are costs to everything. Take universal healthcare. There are only a few ways to pay for universal healthcare. You either have taxpayers pony up for the uninsured and keep all reimbursements the same (passing all the costs to taxpayers) or you slash reimbursements and the cost of drugs (putting all the costs to companies).

Neither of these are good. If you do the latter, quality of care will plummet. People will stop practicing medicine. Hospitals and doctor's offices will be overcrowded. Drug companies will stop spending money on R&D because they won't get an acceptable return. Further, they will relocate to outside of the U.S. and we will lose jobs and tax revenue.

If we let the taxpayer subsidize it all, well, that's just a massive tax hike or massive deficit spending. Those two are IDENTICAL. We simply don't have the money.

All that being said, I'm liberal. I would love to see a form of universal healthcare. It's just very very tricky. You can't put the burden on business. The effects will be dramatic in our quality of life.

That's why I put the question to you types. Obviously you don't want people to just crawl into a hole and die (at least some of you) but at the same time you want the US to remain economically strong. I realize it's an incredibly difficult question, but how do we get both of these things? Can we get both of these things? If we can't, which one is preferential?

Theoretically, the government could provide those services. But it never turns out that way. Health care, for example, becomes more expensive when the government gets involved because of the ridiculous paperwork it requires and the fact that the government likes to stiff people on the payments. The politicians don't purposely plan for that to happen, but politicians rarely, if ever, understand the systems they're dealing with.

I'd say the US remaining economically strong is more important. If the US has a bad economy, where is the money for that health care coming from? Any social program has to be supported by production, and if there's no production, well... you get the idea. We'll have to borrow that money from somewhere.

Based on our current debt load, current deficit, and the state of the economy, we are in a real bind.

Taxes need to be raised on the top 1% pretty dramatically, but not capital gains taxes. People will just move stuff offshore or simply move offshore. Companies will no longer list their stocks on US exchanges. Yes, the cap gains rate was higher just 8 years ago but I think its a terrible decision to mess with it now. Also dividend rate (same thing).

But marginal tax rates need to go up. We need to keep the estate tax. Too much wealth is accumulating at the top 1%. It is very dangerous.

Regarding health care, you need to come up with a balance. Maybe you can't insure everyone for 'free'. Maybe you have tiered layers. Maybe everyone can't get that heart transplant done by the greatest surgeon in the country. Socialized medicine is not for the faint of heart. There are REAL costs - which I outlined in the previous post.

I do think every citizen should be given a basic level of healthcare. It is incredibly sad that for a country as rich as ours we can't provide basic necessicities like healthcare to all of the citizens.

Now, if we got out of Iraq and additionally slashed the defense budget - we would have a lot more wiggle room for just about every liberal pet project.

This is where the "smart" part comes in. Couldn't this all be handled electronically, greatly reducing beauracracy and paper work? Isn't that the model businesses and schools have been following in order to save time and reduce waste? Isn't there a smart way that will provide services and cut costs?

A lot of bureaucracy comes from all the rules themselves, not the method it's processed. Speaking as someone who has electronically programmed paperwork before, there's still a lot of work that has to be done--especially if the rules are constantly changing.

I do it myself, and it does suck, but ultimately it's much quicker.

I'm just bothered by the fact that we haven't figured this shit out yet. It seems like it's about time to actually come up with something that works.

If you dramatically raise the top 1% tax bracket, then won't you see capital gains and thus capital gains tax revenue decrease because there is less money available to invest?

I assume you mean quicker for the programmer. But it is possible for electronic form design to have extra work that doesn't exist traditionally. Take health care forms, for instance. You have HIPAA regulations that demand absolute confidentiality in sensitive data, so you must design excellent security measures. The same is true for a digital signature to verify that the person does agree to everything they've filled out. I'm sure you could find some other difficulties with other processes.

I meant quicker in that you have a database to work from rather than files that need to constantly be pulled.

It won't decrease, it will increase at a lower rate. IE, instead of me having $25,000,000 to invest this year I will now only have $20,000,000. This is on incremental earned income, not retroactive to someones net worth.

Also, a majority of the money in the market is institutional and would not be effected by a hike on the 1% of taxpayers.

Sure, but the administrative costs to manually pull the files may be offset by the technological costs needs to upkeep the system.

Not sure if I'm following you.

Say I make half a million a year, and I'm currently taxed at 35%, putting my aftertax income at 375k. Let's say I regularly spend 75k a year, leaving me 300k to invest.

Now, I'm taxed at 50% (I don't know what you're defining as a "dramatic" tax hike, btw), changing my aftertax income to 250k. After I regularly spend my 75k, now I'm only left with 175k to invest. That's a decrease of about 42% in what I invested before resulting from only a 15% tax hike.

(I guess my figures could be altered if you have a good ratio of spending:investing for the top 1%.)

Are you arguing for this hike as a short term fix, because capital gains will continue to generate from previous investment? If not, I don't see how investment can be sustained at the previous level.

Yes. You are neglecting your current balance in the stock market. That money will not change and will continue to generate the same revenue it generated before. But you are correct, the 'trickle' down effect of you having less INCREMENTAL money to invest will result in less 'new' capital gains taxes. But who cares, the money was taken from you out of your paycheck anyway so net net the government gets more money.

interesting thread....I care alot about the economy..My wife is a wall streeter as are alot of my good friends...I do think we are in a recession now and it should be confirmed in the following 2 months or so..some think its going to be a doozy but I take the contrarion view on it....anyway, keep this thread going we can learn more....for now, I'll get my news, good or bad from Erin Burnett and Maria Bartiromo...

You can have full coverage without having the government run it, so this really isn't an issue. The cost is the issue.

What do you mean by this?

Very crude example:

Making $500,000 a year. Tax rate = 35% = after tax income of $325,000. Taxes to govmt = $175,000. Let's say you invest everything over $100,000 in income. So you invest $225,000 and the government gets some income from that investment. We can pretend that you return 10% a year and get taxed at 15% long term rate. so $22,500 X 15% = $3375 in taxes. Total taxes collected that year = $175,000 + $3375 = $178,375

Now let's hike your taxes to 50%. You get $250,000, govmt gets $250,000. You invest $150,000 at that 10% return. Total return = $15,000. Taxed at 15% = $2250.

Total money to Govmt = $250,000 + $2250 = $254,250.

Now there is a small caveat here. By you investing $75,000 less, assuming the 10% return in perpetuity and the 15% tax rate, the goverment is not collecting that future revenue as well. But that number is still much lower in net present value than the 50% tax rate scenerio. It's the difference of $3375 and $2250, in perpetuity. So call it $1125, every year, forever. (Also your capital grows but let's just put that aside for now). $1125 in perpetuity at a 5% discount rate = about $20,000 in NPV. Again, nowhere near the amount of taxes collected in the 50% scenerio.

How aobut starting with the fact that there is no necessity for an industrialized nation like the US to provide basic services to its citizens, especially when it comes to healthcare. When it comes to transportation, sure, when it comes to security sure. But even when you get to a local level, I believe that local governments should have more say in their police forces, fire departments, so on and so forth.

There is no constitutional mandate to provide people with free healthcare. And it would kill our economy.

I've read some interesting information about how what we have been subsidizing is just blowing the costs of medicine out of the water as it is. It creates what is called "infinite demand." When people are subsidized by the government they get more medical care than they need. Doctors exploit this whenever, and whereever they can. They schedule unneeded medical procedures. The prescribe unneeded pills. And they do this because they know they will get a blank check. Conversely, people who are on medicaid 100% tend to visit doctors much more often than regularly insured people. The real hit is quite possibly in the pharmacuetical industry who, with a universal healthcare plan, can arbitrarily inflate the costs of their product to pretty much anything, and the government will pay for it.

Why is it that the government must provide basic services, but that we are not supposed to be responsible for ourselves?

How can individuals who advocate universal healthcare reconcile the need to give up so much freedom, and say over your own body, and cede it to the mother fucking government.