Daily Archives: 9 November 2020

Joe Biden’s Agenda

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Assuming the unofficial results of the election become official. Here’s the nutshell:

Tax hikes for the rich, broadened health care coverage, and student loan forgiveness were some of the projects on candidate Biden’s to-do list.

Tax hikes on the rich will be tax hikes on the middle class and poor as well. Biden has promised to sharply increase Trump’s tax cuts on America’s businesses—which will result in higher prices to consumers, and those price increases will especially attack our poor. Biden has promised to increase personal income taxes on Americans making over $400,000, but he’s chosen not to index that to inflation, which means that more and more folks will face this tax. What’s not being talked about overmuch is his tax hike promise includes cutting back on the child care tax credit/subsidy—which hits our poor especially hard. Biden’s tax plan also includes vast increases on capital gains we have on our investments—which will badly hit our 401(k)s and IRAs. It’s true enough that taxes on investments inside those instruments go tax deferred until withdrawn, and then they’re taxed at ordinary income tax rates, which might make capital gains tax increases irrelevant. However, there are lots of stock investments outside of those tax deferred instruments, and that cap gains tax hike will deprecate those investment targets—which will deprecate the identical investment targets in otherwise tax deferred accounts.

Broadened health care coverage is the Medicare for All promise he made during the Progressive-Democrat primaries, which he now claims he doesn’t want, but which he signed up to in his Biden-Sanders Unity Platform. Even the watered down version that he now claims would, like his Medicare for All plan, throw millions of Americans off the private- or employer-provided health coverage plans that they currently have and prefer to have. Whether we want that or not. Keep in mind, too, the health care rationing and the loss of usefully timed access to specialized care that centrally controlled national health care systems universally devolve into.

Student loan forgiveness will just drive up the cost of future student loans as lenders are left high and dry. Unless they’re made whole from the forgiveness by…us taxpayers in the form of Federal make-whole payments—which is another tax on all of us, including those of us who make less than $400,000.

This makes Republican control of the Senate a Critical Item, and that control is by no means a done deal, for two reasons. Or maybe one-and-a-half reasons….

One reason is that North Carolina Senator Thom Tillis (R) only holds a 95,600 vote lead over the Progressive-Democrat rival in a race too close to call (as of Sunday). The two Georgia Senate races are going to a 5 Jan run-off, and the two Progressive-Democrat candidates are well positioned to pull out victories. Three wins would flip the Senate outright to Progressive-Democrat control. Two wins would flip the Senate to Progressive-Democrat control via the tie-breaking vote of the Progressive-Democrat Vice President.

The half reason is this: two Republican wins would leave the Senate with a Republican nominal majority of 51-49. Nominal because that would leave Utah Senator Mitt Romney (R) in a too-important position. While he’s usually a Republican vote, his animus toward President Donald Trump is such that he’ll be an unreliable Republican vote on Progressive-Democrat matters that would undermine or altogether undo a Trump policy.

City Pensions

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They’re in trouble. You knew that, though, as city budgets have long favored spending more than revenue, especially spending on public union pensions and other retirement benefits, and so debts piled up—and continue to amass.

One particular arena where that’s having potentially deleterious effect is in pensions with benefits like paid (or mostly paid) health plans.

Cities and states can’t afford to keep the same medical benefits they promised government retirees.
For all 50 states combined, revenue declines for 2020 and 2021 could reach 13% cumulatively, according to Moody’s Analytics projections, while the average cost of an employer health-care plan for an individual increased 4% in 2020 to $7,470, according to the Kaiser Family Foundation nonprofit.

The current excuse is the Wuhan Virus situation having crushed sales-tax income and tourism dollars. In the end, though, the specific crisis du jour isn’t important: there always will be a crisis that will crush city revenues. An example of the reach of any crisis is this:

The Ohio Police and Fire Pension Fund sponsored a self-insured health-care plan for its retirees from 1975 to 2018, said fund spokesman David Graham.
“With no dedicated funding source for this plan, it eventually became unsustainable,” Mr Graham said in a written statement, adding that retirees would have had to increase their contributions to keep the health-care fund solvent.

There’s a hint, in that “dedicated funding source.” There needn’t be one could retiree pension health “benefits” be structured differently.

That brings me to the “potentially deleterious” bit. Deleteriosity is only potential because the overall situation presents opportunity: privatizing health plan provision, returning the provisioning to true health insurance—premiums based on the risks being transferred to the coverage provider—and using the free market and its intrinsically competitive nature to govern both customer costs—those premiums—and product quality.  Quality especially would include the breadth of insurance products offered: single or a very few health matters insured; suites of preventive health care insurance for standard items like colds and flu, annual checkups; a broad range of other coverage offerings that might be relatively specific or relatively broad.

That opportunity often will be beyond an individual city’s capability to implement, but aggregations of cities might approach the capacity, and certainly at the national level, the health coverage industry can be privatized and included in the nation’s free market economy. At that point, cities would be able to step out of the health coverage business altogether beyond—perhaps—providing a cafeteria of market plans purchased on the open, free market for their city employee retirees.

More opportunity: with retirees responsible for choosing their own plans with which to satisfy their own needs and desires and paying for those plans with their own money—as grown adults, they really are capable of that without Big Brother Government or overreaching unions “helping”—they’ll take both their health and their insurance costs seriously.