2017 Politics open thread, March 26 — April 1

Will the Republicans learn anything from this past week’s debacle?

Trump vs. Congress:
Now What?

Does this sound right?

A political scientist explains the real reason Obamacare repeal is so hard

Advertisements

44 thoughts on “2017 Politics open thread, March 26 — April 1

  1. If Trump could focus on something for more than 5 minutes, he could work with the Dems to modify Obamacare and make it better. I don’t have much hope for this, but it would be fantastic if he could do so and it has the possibility of strangely aligning the Trumpsters and the Dems.

    Hopefully they move to taxes next (why they didn’t start with this is not clear). While I think it is irresponsible to lower taxes, it is probably one of the less damaging things on his agenda and more money in my pocket will be a lovely consolation prize.

    I thoroughly enjoyed the healthcare stuff. Trump looked ridiculous and totally ineffective. Bannon’s order to the Freedom Caucus was laughable. Ryan looked like an idiot. All in all a very good week! And we still have the Russia stuff to await. Flynn had allegedly made a deal with the FBI.

  2. Good article on the general difficulty of eliminating/significantly modifying social welfare programs, a problem that goes at least back to bread and circuses in the Roman Empire. When Trump’s election happened, I thought about the electoral college and the fear of pure democracy that led the Founding Fathers to create it. They had clearly studied why/how democracies fail. On days I think Trump will be a less bad president than Clinton would have been, it’s because of her commitment to expanding social programs- government-subsidized childcare and free college even though only a minority of jobs require a college degree, and that minority would be smaller if employers paid more of the cost for their requirement.

    One of the reasons I liked Romney is that he had created an actuarially sound insurance program for Massachusetts. If I were to change the Affordable Care Act, I think I would
    1) Allow older people to be charged up to 5x (or actual, whichever is lesser) the cost of young adults, not limit it to 3x.
    2) Calculate the desired subsidy for poor older Americans and raise income taxes (not medical insurance costs for young adults) to fund that subsidy long-term.
    3) Reduce mandatory coverage of services of statistically limited benefit (healthcare program treatment of addiction vs. Alcoholics Anonymous)- this would be controversial.) Establish a system to notify patients/get approval when their “preventative” services become “non-preventative” and pay for physician guidance around follow-up treatment. For example, an anomalous prenatal scan or radiology review of mammogram/follow-up treatment wouldn’t become a huge medical bill without the patient’s knowledge/involvement. The fact that only non-problematic situations remain “preventative” is a policy glitch.
    4) Allow married adults as well as unmarried adults to remain on their parents’ insurance policies until age 26- I personally hate policies that discourage marriage among people for whom marriage is the appropriate choice. This policy proposal might have helped Clinton in the Rust Belt states, where marriage in early 20’s is more common than in the states that overwhelmingly voted for her.
    5) Possibly create a “public option” where people of any income level can buy into Medicaid so everyone has an option of last resort, whether any private insurers participate in the market or not.

  3. 4) Allow married adults as well as unmarried adults to remain on their parents’ insurance policies until age 26- I personally hate policies that discourage marriage among people for whom marriage is the appropriate choice.

    I agree with that one.

    I had a coworker who got married at 19. Her parents had told her that if she remained single they’d pay for college, but if she got married she was on her own. I never understood that. They weren’t even opposed to her getting married — very conservative, religious family. They just thought that one day you were a child and the next day you were an adult. I’d pay for the kids’ college even if they got married young, as long as I was saving for it anyway.

  4. WCE, just curious, how strongly is the mandate enforced in MA? Do you know? I haven’t checked that one. I do think that is one of the problems for the ACA, and was from the beginning.

    I would like to see the Democrats put forward a set of reasonable, moderate tweaks to the ACA to put it on a stronger footing. By moderate, I mean not calling for single payer, and giving some room to Republicans. I would like to see them do this and ask the Republicans to work with them to fix the ACA. Of course, I do not have high hopes that the Democrats would do that OR that the Republicans would then negotiate. But one could always dream

  5. Mooshi, the problem is that politics is no longer about trying to what’s best for the country, it’s about winning.

  6. WCE, not sure I understand your point on the marriage issue. Marriage doesn’t disqualify a young adult from coverage under a parent’s policy.

  7. Scarlett, it appears that you are definitely right about individual policies and new employee plans. I can’t quite tell if existing employee plans are grandfathered or if my hearsay knowledge on this is inaccurate. I suspect I’m wrong about the married dependent part.

  8. I am strongly opposed to lowering taxes at the same time he wants to increase spending. We have still not dug our way out of the debt increases that occurred that last couple of times this policy was used. At a minimum, current tax levels should remain in place, and I would not be opposed to a modest increase. As interest rates begin to rise, that debt service will consume an ever larger piece of the pie, and it is irresponsible to foist the consequences of that on the next generation.

  9. I just don’t want them to get rid of the estate tax. Please! I don’t care about anything else in terms of tax policy.

  10. L, Why do you want to keep the estate tax? From what I’ve read, it doesn’t generate much tax revenue and a lot of time and money go to avoiding it.

  11. Pseudo – that is her livelihood as an estate and trust attorney. I felt the same way about international corporate tax reform when I was working.

  12. Similarly, Turbo Tax and accountants have lobbied against simplifying the filing of individual tax returns.

  13. Meme has it – it would make my job less needed for the HNW demographic. We still have a MA estate tax, but it is not as big of a punch. I don’t really want to shift focus to planning for capital gains – blechhh.

  14. Reduce mandatory coverage of services of statistically limited benefit

    So this was one of the selling points of Obamacare – we would spend money researching what are cost effective solutions. Currently there is very little research on what is the most cost-effective way to treat things. This is called “comparative effectiveness research” and the Heritage Foundation thinks it is a short descent from there into cash incentives for abortions (okay, I made the last part up, but conservatives hate CER). http://www.heritage.org/health-care-reform/report/comparative-effectiveness-research-under-obamacare-slippery-slope-health

    An aside: until AA allows scientists to observe what they are doing, we’ll never know if it is more cost effective than other treatments. If you haven’t worked with alcoholics, you may not realize that AA is not appropriate for a significant subset who have a physical addiction to alcohol. Those folks need inpatient detox. Abruptly stopping alcohol use can be deadly (unlike abruptly stopping heroin, cocaine, and most any other drug). Some people need medical supervision to “dry out”. Confining them to church basements will kill them. Which I suppose may be cost-effective.

  15. NPR’s Project Money did a Tax episode last week that discussed the lobbying that Tubo Tax did to defeat the California simplified tax bill that would’ve shifted to the way other countries collect taxes.

  16. I don’t understand keeping the estate tax. The money has been earned and taxed already and if you are over the threshold to pay estate tax, you can fairly easily work around it through putting assets in LLC, trusts or family LP’s. I am all for simplifying the tax code even if it means getting rid of deductions. I HATE stimulating decision making through tax policy. It has lead to the behemoth tax laws that we have now that are burdensome and actually make it more difficult to do your own taxes.

    I would simplify tax code and basically have an app that is similar to Mint – all my data aggregates for income and it spits out a number that you owe for tax. Basically only people with a lot of cash income or with very complicated returns would need to fill out paperwork and/or hire an accountant.

  17. you can fairly easily work around it

    It doesn’t have to be easy. Personally,
    I’d favor taxing it as income to the recipient.

  18. “Basically only people with a lot of cash income or with very complicated returns would need to fill out paperwork and/or hire an accountant.”

    When people learn that you are or were a tax lawyer, they often have questions about their returns. Last week, I met a young man working as a physical therapist at the hospital who pays someone to do his taxes, “because they told me that they could find more deductions.” He’s single, no dependents, owns a cheap house with minimal mortgage payments, and most of his income is from a single W-2, with a small 1099 from an outside gig. He wanted to know whether he could deduct the travel costs for CE seminars not reimbursed by his employer. I told him that I didn’t know the answer off the top of my head without Googling, but that Turbotax does, and anyone who can enter data into their work laptops as he does can also do their own taxes with Turbotax, which would probably even be free for him. He had no.idea. Had never heard of Turbotax. I told him that his “accountants” are ripping him off. He can’t even itemize deductions in his situation.

  19. if you are over the threshold to pay estate tax, you can fairly easily work around it through putting assets in LLC, trusts or family LP’s

    It isn’t that easy. I’ve been through it.

  20. if you are over the threshold to pay estate tax, you can fairly easily work around it through putting assets in LLC, trusts or family LP’s

    There is nothing easy about it.

  21. Oops – didn’t see UsedtoLurk’s comment. Well, there is the link to that story!

  22. ” a short descent from there into cash incentives for abortions”

    Wouldn’t that line of reasoning suggest just not spending on health care and letting people die?

  23. Well, before we go full-nihilist…

    We can perhaps make the assumption that most people (on all sides of this issue) want to promote long, productive lives unburdened by disease for each and every person. The questions are “how valuable is it to be unburdened by disease” and “how long is long enough” and “at what cost”.

    From an economic standpoint, subsidizing or providing cash incentives for abortions makes a ton of sense. Also, from an economic standpoint, no providing any healthcare beyond vaccines probably also makes sense.

    I don’t really want to debate abortion funding (well, I do, just not in this context). I just tried to come up with some hyperbole about how bad the heritage people seemed to think CER was.

  24. ” a short descent from there into cash incentives for abortions”

    OTOH, that would tend to mitigate against human contributions to global warming and species extinction.

  25. It is not that complicated – expensive, yes. Well worth the cost. Or you can just start spending a ton of money on frivolous spending to avoid gifting it to the US government.

    Rhett – I would not oppose some sort of tax on the income of a recipient but I would prefer to see it taken over time – say a 5-year period.

  26. It is not that complicated – expensive, yes. Well worth the cost. Or you can just start spending a ton of money on frivolous spending to avoid gifting it to the US government.

    No, it really isn’t that simple. Trusts, etc., do not exempt you from the estate tax. L, could you chime in, please?

  27. “Trusts, etc., do not exempt you from the estate tax.”

    My understanding is that the trusts DW and I had created, as well as the ones my parents, sibs, ILs, etc, had created, maximized and preserved all the exemptions available to us, but did not exempt us from the estate tax for amounts beyond that.

    “Or you can just start spending a ton of money on frivolous spending to avoid gifting it to the US government.”

    Or you can start giving it away, e.g., personal gifts below the taxable threshold, paying kids’ or grandkids’ college tuition, and charitable gifts.

  28. IMO, the estate tax really sucks when it causes jobs to be lost, e.g., when family businesses have to be sold or broken up to free up cash to pay the tax.

  29. Trusts are particularly useful in places like California, where probate can be onerous (and expensive). The trusts can allow you to skip probate. They’re less important in states like Colorado, although they definitely still have their uses.

  30. Mia, what kind of structures are you talking about? Yes, you can put assets into an FLP, but if they are publicly traded securities or you retain any control whatsoever, you CANNOT take a giant discount to get under the exemption – the IRS will come after you. (See the Strangi line of cases, etc.) You can transfer assets to irrevocable trusts to get them out of your estate, but after gifting $5.5M, you will have to pay gift tax on any further gifts.

  31. The trickiest trick that my attorneys did to try to minimize the estate tax was to take a piece of real estate and somehow demonstrate that because it was held in trust, it was hard to sell, and should be discounted. Or something. I couldn’t follow the explanation. But a house that would have gone for $1.1M on the open market, and was assessed at $900K, came in at $600K after they hired (for 4K) magical accountants to say the property was a PITA in some way. My regular tax accountant looked at it and choked, and commented that this was why he got out of that line of business, because that kind of maneuver was sleazy (though legal).

  32. It is a misconception that estate tax applies primarily to money that has already been taxed. Yes, the cash in your bank and the value of your bonds has already been taxed. All the cost basis (what you paid for it) of stocks, real estate, cash re invested in a business. Unrealized appreciation of businesses (good will, trademark value or value of intangible assets such as patents and know how), stocks, real estate have never been taxed. If any of those assets were sold during the owner’s lifetime, in general the gains would be taxed at capital gains rates. If they are left to heirs, the heirs get an automatic step up to fair market value in basis, and can sell them the next day for no tax liability. An additional avenue for double taxation is traditional IRAs or 401ks left to someone other than a spouse – the balance is included in the estate and also taxed at the beneficiaries’ tax rate when distributed. (this all very general – your situation may differ)

    Yes, there are family businesses and farms that end up having to be sold to pay estate taxes. But a little investment in professional advice (after all, for Fed purposes estates held by married couples can avoid estate tax on the first 10 million) can usually figure out how transfer ownership gradually over many years to minimize estate taxes. And frankly, the family patriarch/matriarch may need to let go of the family business – either sell it or let the younger ones own it and make it grow or run it into the ground, as the case may be. .

  33. Kate – I don’t know, but I think they are low down on the list of priorities. The Obama administration had on its list to make the minimum term of any GRAT 10 years, but that went nowhere. I am still doing 2-year zero-out GRATs for several clients who have assets to spare.

  34. One side has done a family LP and paid tax on the transfer of assets at the time of transfer. At the time of the formation, the estate tax threshold was much lower and right now, it is bordering on not being worth the extra cost for the LP and the entity and they are considering dissolving it. On the other side, we have used regular gifting to children’s trusts to fund education but that really doesn’t scratch the surface. There are charitable pledges that will be due at the time of death to reduce the value of the estate, life insurance that can be used to pay the estate tax if we are over the threshold and if all of the money is spent, the life insurance is the only inheritance the children get (tax free). Given the ages (mid-70’s), I would transfer assets to a trust for their anticipated life expenses not to exceed the $5.5 million and then start gifting everyone to the max and give larger charitable donations. If they live to 90, the remaining assets should be below the threshold triggering the tax.

  35. “But a little investment in professional advice (after all, for Fed purposes estates held by married couples can avoid estate tax on the first 10 million) can usually figure out how transfer ownership gradually over many years to minimize estate taxes. And frankly, the family patriarch/matriarch may need to let go of the family business – either sell it or let the younger ones own it and make it grow or run it into the ground, as the case may be.”

    Meme – yes, this is exactly what I was getting at although far less eloquently. I am managing a trust for a family friend that’s sole existence is to have someone continue to be their mother beyond the grave. It is not enough money to corrupt anyone and I should have said “no, thank you” to the assignment.

  36. While everyone was paying attention to healthcare and Gorsuch, the Republicans snuck in an attack on Internet privacy

  37. I can’t link the article on my phone but I just read through a Yahoo news article about 3 teens in Oklahoma who were shot while robbing a house. Going off the pictures at least 2 of the 3 were white. There were a few “these poor boys didn’t deserve to die,” type comments. But the vast majority were along the lines of “they got what was coming to them, ” and they were frequently referred to as “thugs.” I find this interesting in light of the recent “thug is a racial term” conversations we’ve had here recently.

  38. Just in case you didn’t think psychology and psychiatry were political. “Ferguson says he has heard indirectly that some of the WHO’s interest in gaming disorder stems from leaders in countries that want to see the behaviors pathologized so that people can be coerced into treatment.”

    https://www.addictionpro.com/article/adolescents-and-emerging-adults/researchers-question-establishment-video-gaming-disorder?utm_campaign=Enews&utm_source=hs_email&utm_medium=email&utm_content=49411515&_hsenc=p2ANqtz-8r52GTwuwd9VVZ9C_VhFrh96Y11NrrU4IpAxqcdz8EIu8ueVdxHjfLkf0LOTTWlzjy7GCT-dMTGFO1TWVEIkZ1t6i2ug&_hsmi=49411515

Comments are closed.