Saturday, December 24, 2011

Retirees, Not Millionaires, Will Pay For Extension Of Unemployment Benefits

I read the bill recently passed by Congress which extends the payroll tax cut and unemployment benefits. The Republicans demanded terms that were unrelated and unacceptable to the Democrats and a few moderate Republicans. First the Senate then the House Republicans finally agree to extend the benefits and cuts for two months so that they had more time for debate. The Democrats accepted some of the Republican terms in order to get the temporary extension.

The Republicans wanted to require that all unemployment recipients take a drug test every month as is already required of some welfare recipients. I can't imagine my Mom having to submit a urine sample every time she picked up free food when we were on welfare. Congress compromised, the extension allows (instead of requiring) each state to determine if it will test all recipients for drugs and whether to deny benefits if drugs are detected. Florida required its welfare recipients to pass a periodic drug test. Only 4% tested positive but they spent more money than they saved by testing everybody. I’ll bet the incidence of drug use among temporary unemployed persons is lower than 4%. This is, in my opinion, a way of vilifying the unemployed. A favorite pastime of the self-righteous.

In order to pay for the extended benefits the Democrats wanted to tax people who earn more than one million dollars per year. Republicans disagreed with taxing the Rich - the Republicans demanded that retired persons who earn more than $88,000 a year pay more for Medicare in order to pay for the extension of unemployment compensation and tax cuts. Therefore, I will be paying more for Medicare so that millionaires don't have to pay more income tax. The bill doesn’t state how much more I will pay for Medicare but I am already paying twice the base amount so my guess is that they will probably triple the base amount.

Raising the cost of Medicare for fixed income retired persons instead of raising taxes on those that work and especially those that can afford it is immoral. I don’t really mind that I now pay $1,200 more each year for Medicare because I spent (not earned) more than $88,000 of my IRA savings. And, I don't mind paying $2,400 more for Medicare if everyone is paying a share based on their ability, but the cost is not being shared by all. Only retirees who make more than $88,000 will pay more -multi-millionaires will contribute nothing. I hate any politician who would rather charge the elderly more for their healthcare insurance than increase the tax rate of people who earn more than $1,000,000 per year.

Based on a past proposed rate hike, a person making $1,000,000 per year would not pay an additional tax. The additional tax would apply only to the earnings over $1 million. A person making $2,000,000 per year would pay an additional $5,000 or (0.25% of their total income). Instead, retirees who spend $88,000 of their savings will probably pay an additional $1,200 (1.4% of their income). That doesn’t seem fair to me but it sure makes sense to our congressional Republicans

146 million Americans live in poverty -less than $22,000 for a family of 4; less than $10,000 for a single person. The majority of these are employed or are members of a family with one or more employed people. Most of the people in poverty are working but earn less than $10 per hour. While the working class is making less this year than the year before, the average CEO earns 36.6% more this year than last year. The 10 highest paid CEOs earned a total of $770 million this year. Next year they are expected to earn more than $1 billion but they will not share in paying for the extension of unemployment benefits. I will.

Remember this when you vote in the next election.

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