Don’t fight a tax on deductions

By Felix Salmon
December 17, 2012

James Stewart has a long attack this weekend on the one idea from the presidential campaign which managed to receive genuine bipartisan support: the cap on deductions. He’s a first-rate reporter and columnist, so it’s worth going into some detail about all the different places he’s wrong.

Stewart starts off his column by summing up his two main arguments against a cap on deductions:

Without addressing larger tax preferences, like a lower rate on capital gains, it does almost nothing to cure the so-called Buffett problem, in which Warren Buffett’s secretary pays a higher effective rate than her billionaire boss. It doesn’t even raise much revenue.

Saying that a cap on deductions doesn’t cure the Buffett problem is a bit like saying that some random bit of Dodd-Frank doesn’t solve too-big-to-fail, or wouldn’t have prevented the 2008 financial crisis. It’s true, but it’s irrelevant. You can’t approach the current fiscal negotiations with the idea that solving the Buffett problem is a necessary precondition for any fiscal-policy tweak: you’d never get anywhere if you did. The task right now is to come to an agreement on a set of policies which will raise revenues and cut expenditures; a cap on deductions does exactly that. And what’s more, while it won’t mean Warren Buffett paying a higher tax rate than his secretary, it will at least reduce the distance between them.

As for the idea that a cap on deductions “doesn’t even raise much revenue” — well, that’s in the eye of the beholder. The dog not barking here is that Stewart never actually comes out and say how much money a cap on deductions would raise. Here are the numbers, from the Tax Policy Center: a cap at $50,000 would raise more than $700 billion over ten years, while a cap at $25,000 would raise some $1.2 trillion. That’s real money. Even if you exempt charitable donations from the cap, you’re still raising almost $500 billion at the $50,000 level, and more than $800 billion with a $25,000 cap.

Stewart is at least honest about the main reason he opposes this cap:

It would hit people like me: taxpayers in higher brackets who rely on earned income as opposed to investment income or an inheritance, who give to charity and live in a high-tax state. Assuming a $35,000 limit on itemized deductions, my federal tax last year would have risen to 27 percent of my adjusted gross income, from 22 percent.

Stewart talks about his own personal tax rate a lot in his column; he must think it’s of great interest to the rest of us. Interestingly, he always talks about his tax rate as a percentage of his adjusted gross income, which is surely a lot higher than his tax rate as a percentage of the total amount of money he makes every year. (As a self-employed professional, Stewart can take a large number of expenses, including housing expenses, and deduct them from his income before calculating any tax at all.)

Stewart’s point is absolutely correct, as far as it goes. The three major deductions are state and local taxes; mortgage interest payments; and charitable contributions. So people who spend a lot of money on those three things every year — people like Stewart — are going to be precisely the people who are most hit by a cap on deductions.

At the same time, however, Stewart is rich, and everybody knows that the rich are going to have to pay more in taxes, one way or another. Indeed, Stewart says he’s OK with that: he claims that he “wouldn’t mind paying more” in taxes, just so long as the top 400 taxpayers in the country all paid more in taxes as well.

But here’s the thing — they would! According to Stewart’s own calculations, the taxable income of the top 400 taxpayers would rise by $32 million, on average, while their overall tax rate could go up to 25% from 20%. Seems like a big hike to me. But because that 25% is lower than Stewart’s own 27%, he’s decided that we’d be better off not capping deductions at all.

This is profoundly myopic. I can see how on a philosophical level it makes sense to ask the top 400 taxpayers in the country to pay a higher tax rate than James Stewart. But the top 400 taxpayers are, by definition, a highly exceptional bunch, who spend millions of dollars a year on tax-avoidance strategies. It might or might not be possible to construct a tax regime which makes the top 0.0001% pay a higher tax rate than James Stewart, but I really don’t think that failure to do is reason to do nothing at all.

Maybe realizing that he’s on to a losing argument here, Stewart shifts course at this point, describing the deduction cap as “a stake aimed at the heart of the charitable deduction”. And once again, the dog doesn’t bark: he quotes lots of people who work in the non-profit sector, saying that this move would reduce the amount of money that people give to charity. But not once does he hazard a guess at the amount by which charitable giving might decline; indeed, he quotes Patrick Rooney, of the Center on Philanthropy at Indiana University, as saying that he hasn’t studied that question.

Rooney has studied similar questions, however. For instance, his institute looked at the effect of capping the deduction at 28%, even for taxpayers with a higher marginal tax rate. That tweak would reduce charitable giving by some $2 billion per year, they found — but it would raise ten times that amount in new tax revenues.

And when the CBO recently looked at various different ways of changing the charitable tax deduction, they came to much the same conclusion:

In each case that CBO examined, the reduction in the subsidy (and thus the increase in revenues) would exceed the reduction in charitable contributions, whether measured in dollars or as a percentage change.

If there’s one constant when it comes to the charitable deduction, it’s this: its opponents love to get quantitative, while its defenders generally refuse to talk numbers at all. For instance, check out Bob Shiller’s column this weekend: despite the fact that he’s a fine economist, he never once talks costs and benefits, instead relying on general principles such as the one saying that “income that is freely given away should not even be considered as taxable income”. And then compare Dick Thaler, or any of the many other critics of the charitable deduction: they ground their arguments in reality, rather than in the clouds.

So when Stewart starts saying that capping deductions will hurt the poor, on the grounds that the poor go to hospitals and museums, and those hospitals and museums are reliant on charitable donations — well, take it all with a pinch of salt. And move on to Stewart’s next argument, which revolves around the deductibility of state and local taxes:

According to the Census Bureau, state taxes per capita in 2011 ranged from $3,491 in New York to $1,674 in South Dakota. For many higher-income taxpayers in high-tax states, state and local taxes alone would exceed the cap limit, completely depriving them of the mortgage and charitable deductions.

This is an interesting use of the word “many”. If the cap was put at $25,000, that would be more than seven times the average state taxes in the state with the highest taxes in the union. If the cap was at $35,000, it would be more than ten times New York’s average state taxes. So yes, if you pay ten times the average amount of taxes in your state, and if you live in New York, then you might use up all of your cap with state taxes alone. You’ll excuse me if my heart doesn’t bleed.

Stewart concludes by reiterating that he would rather see other people pay more in taxes, rather than himself — especially people who rely less on income and more on capital gains. I’m inclined to agree with him, on a policy level: I too would like to see unearned income taxed at the same rate as earned income. But the fact is that all the big deductions — charitable, mortgage-interest, even state and local taxes — are bad public policy. We should cap them, at a high level if necessary, and then bring down the cap over time, until it reaches zero. That, in turn, will help income tax rates to converge on capital-gains tax rates, again over time. Few things in fiscal policy happen overnight. But capping deductions is a step in the right direction. And Stewart should embrace that, rather than fighting it.


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All points well put. But Stewart should consider this one that’s been completely left out, it’s better to get something than to get nothing.

Tax the rich too much and what do they do…? They leave! There are plenty of past examples and the little set to between Gérard Depardieu and the current French government underscores it with France getting nary a French Franc in the end. California’s seeing the same thing, but the lefties there won’t acknowledge the truth either and there are more cries to raise taxes even more.

Better to get just a little more, plus what you’d been getting, than nothing at all.

Posted by Twinkbait | Report as abusive

I’m not so sure Felix. It’s really, really hard to see any tax reform that doesn’t *start* with a big hike in cap gains (back to its historical average of 28%) as anything but yet another salvo in the ongoing war of capital against labor, even though the latter is already desperately waving the white flag.

Posted by mw1 | Report as abusive


Deductions have to be allowed for taxes. Consider the following hypothetical case in a dystopian future:

Gross Income = $100,000.
State taxes = 55% of gross income = $55,000
Federal taxes = 55% of gross income = $55,000

Total tax liability $110,000, which exceeds income. What is the taxpayer to do?

This example although very unlikely is _theoretically_ possible.

Posted by HughLoebner | Report as abusive

Let’s compromise and have all three!

* Higher maximum tax rate (not much higher, but 40% is fine).

* Higher taxes on unearned income, especially the “carried interest” that hedge fund managers don’t earn. A 25% top rate on LTCG and dividends is fine, and would dovetail nicely with a lower corporate tax rate (that corporations don’t pay anyways, because they are superb tax-dodgers).

* Abolish Schedule A all together. Give people a somewhat higher standard deduction (perhaps eliminating some of the various tax credits aimed at the lower middle class) and don’t allow anything beyond that. It’s your money, spend it as you will — we don’t need to subsidize your McMansion.

Posted by TFF | Report as abusive

Given the premise that “all the big deductions are bad public policy,” it’s easy to say that capping them is a good way to raise revenue (conversely, if rate preferences for capital gains and dividends are bad policy, its easy to say that eliminating them is a good way to raise revenue). But if that’s the argument, make it up front. If that premise is not accepted, it’s hard to understand why capping deductions is a good substitute for raising marginal rates for any reason other than political gamesmanship.

Posted by srb87 | Report as abusive

I would bet that most of the top income earners would not be affected by a limit on deductions. Most of their income is from capital gains, interest, and dividends, and the tax rate is already low. If they have deductions like interest expense, they are most likely shifted into a business expense, rather than a mortgage deduction (have your business borrow money and deduct its interest expense, and use your personal property as collateral).

The tax will mostly impact upper middle class earners in CA, NY, NJ, and MA (and urban areas in other blue states), where they have high state tax rates, high property values relative to the rest of the country, and higher incomes to afford those taxes. So if you’re making $200K a year, and have a $8000/month mortgage that is 90% interest, and pay $15K in state taxes, limiting your deductions to $25K is going to significantly increase your taxes.

While limiting deductions is a great idea, it’s incredibly unfair to apply it only to income that is taxed at a much higher rate than income derived from speculation and investments (capital gains, dividends, and interest). If those forms of income are taxed at the same rate as ordinary income, then the overall rates could be lower, and all deductions eliminated.

Posted by KenG_CA | Report as abusive

@KenG, the counter-argument is that capital gains (at least retained profits) and dividends are already taxed at the corporate level. I’m all for raising the tax on unearned income, but this should be accompanied by reduction in the corporate tax rate (or a reform of the entire corporate tax system).

Best thing about this proposal is that it has the chance to be a win-win. Corporate profits are at record highs (as a percentage of GDP). Corporate tax revenues are at record lows. Might be possible to literally double corporate tax receipts (would still be below the historic norm) AND bring some of that cash home to the US through a restructuring of the tax code. If so, that would be $200B/year of revenue that doesn’t need to be raised from individuals. displayafact.cfm?DocID=263&Topic2id=20&T opic3id=21

Posted by TFF | Report as abusive

The point, Felix, is that the cap is being proposed as an *alternative* to what you claim to prefer (higher marginal rates and cap gain rates). The latter is going to happen as part of current law, so there is no reason to accept the alternative that will favor the super-rich at the expense of the well-off.

Posted by Doubleday | Report as abusive

TFF, yes, dividends are taxed at the corporate level, and I think that should be eliminated, by allowing corporations to deduct dividends as an expense. But it’s still income at the personal level, and that’s where it would be most efficient to tax.

As for capital gains, not all gains are impacted by corporate taxes, and profits from speculation are not impacted by taxes, especially short term, as they are based on differential values, not absolute profits.

As you probably remember, I am for raising corporate tax rates, while allowing substantial tax credits for investment in R&D, capital equipment, training, etc. In theory, corporations shouldn’t have to pay taxes, but then they just hoard cash, which decays the economy. If corporations either distributed their profits or re-invested them in their business, I would have no problem with them paying zero taxes, but they don’t do anything that approaches that. Instead, they extract their profits from the economy and keep that capital out of circulation.

Posted by KenG_CA | Report as abusive

Most of these comments as well as Felix’s article are wrong on many points.

1) Wrong: Dividends are already taxed at the corporate level. Look at the actual Federal corporate tax rate that Exxon, GE and others paid in the past years – nearly -0-!!

2) Wrong: Limiting deductions only hurt NY, CA, NJ and MA. Many, many states fund their budget with sales tax like WA, Miss., ALA, GA. Their middle class income residents would loose out as well.

3) Wrong: the wealthy leave high tax jurisdictions. Don’t see the super rich abandoning NYC which is the highest taxed locale in the USA nor L.A. and Hollywood. Do you really think they will move to Mississippi?

Caps on deductions is merely a backhand way to raise taxes again on salaried/wage earners whose only income is reported on W-2s. The low, low tax rates on 1099, 1098, K-1 income/gains is what has benefited the super rich over the past 30 years to the detriment of the US economy and its democracy (or what’s left of it).

Look at the preferred tax rates in real estate (1038 exchanges completely avoid cap gains taxes), oil/gas partnerships use depletion allowance and other tax preferences to pass on virtually untaxed income in the forms of K-1; huge int’l corporations increasingly shift their global income out of any tax jurisdiction, etc. And, worse of all, the low rates on short term cap gains, day trading, derivatives, carried interest, etc. have skewed the US economy to a highly leveraged casino just ripe for speculation.

THe US tax structure needs to not only create a level playing field (no difference between salaries, wages, dividends, interest incomes) but reward the long term investor and discourage speculation.

Felix completely misses the points that Stewart was making, but even worse completely ignores the economic consequences of our skewed tax code.

Posted by Acetracy | Report as abusive

Felix: Why is the charitable deduction “wrong” in all cases? Why *should* the deduction be phased down to zero? You have not made the case for your bald assertion.

Acetracy: Low rates on s/t gains and day trading? In what jurisdiction? Treated like ordinary income on *my* returns.

Why *should* l/t gains be treated like ordinary income? Just because “the rich” use it? The rest of us benefit from a higher savings and investment rate that lower capital gains rates facilitate. Bill Clinton and Newt Gingrich knew this. That’s why they unpinned cap gains taxes from ordinary income. And the rest is history.

Posted by Publius | Report as abusive

Acetracy, while I agree with much of your comment, I didn’t mean to imply that only residents of those 4 states would be impacted, but rather that those states have a higher percentage of residents who would be impacted than most other states. Because home prices are so high in those states, even the middle class with homes in the high six digit values would see a tax increase if their mortgage deduction was capped. That isn’t as true for AL, MS, and GA. And these four states have higher sales and income taxes, also.

But I agree with the rest of what you said, especially your next to last sentence.

Posted by KenG_CA | Report as abusive

The rich do leave, and many don’t come back. Just look at Connecticut and how many have permanently left NYC, though they commute and work there, particularly Greenwich. There are other areas surrounding NYC where they “live” as well, and don’t pay NY taxes.

Additionally, many “super rich” also have other abodes which they list as their primary residences.

To claim it’s “Wrong” that the rich don’t leave is “wrong” and the examples of what’s happening in France only underscore that when they’re gone, they’re often gone for good.

Posted by Twinkbait | Report as abusive

@KenG, corporations are hit with a 35% tax if they do either of the activities you recommend. If they bring the cash home to distribute to their shareholders, they first pay a 35% tax. If they reinvest their cash in the US, they first pay a 35% tax. Raising tax rates will only further discourage these behaviors.

A lower corporate tax is the simplest approach. As AceTracy points out, corporations respond to a 35% tax rate by gaming the system. They bring home no more cash than can be covered by their tax credits (and so end up paying plenty of taxes to other jurisdictions but none to the US). Sometimes lower rates result in higher revenues.

Posted by TFF17 | Report as abusive

Why not eliminate ALL itemized deductions and then just increase the amount of the standard deduction and personal/dependent exemptions by 20-30% (enough to blunt the impact on the middle class while still raising a significant sum of tax revenue)?

People need to start viewing deductions as the expenditures they are. A person facing a 20% marginal tax rate who donates $10k to their church is mathematically no different than the government giving $2k to that church. Likewise, the mortgage interest and state/local tax deductions amount to the federal government PAYING people to buy houses or live in high tax states. It’s silly.

Posted by RueTheDay | Report as abusive

Couple quick points on state taxes.

A $200k AGI household living in a $400k home in California with a $300k 4% mortgage would likely pay about $17k in state property and income taxes and $12k in mortgage interest. Less you think this is a high income household — my now-retired fire captain dad and teacher mom made a little more than this when they retired 4 years ago. A $25k deduction cap would be much too small to avoid hitting them.

Incidentally, that same couple living in a $400k home in Houston, Texas would only pay about $10k in state property taxes and $1900 in sales taxes (according to IRS calculator). In other words, their deductions wouldn’t be taken away with a $25k cap.

Now, a Texas might argue that superrich Texans (those who would benefit most from a deduction cap proposal since it’ll limit the amount by which their rates will go up on this compromise) shouldn’t subsidize California’s decision to spend and tax more than Texas.

To that, I point to Medicaid spending (one of the single biggest line items in most state budgets). In 2010, according to Kaiser, the Federal government spent $671 per capita in California and $759 per capita in Texas. In other words, California residents must tax each resident $92 more just to provide the same Medicaid services as Texas. In other words, Texas is free-riding on California. (As an aside, the picture is pretty similar with Federal education dollars with TX receiving $314 per capita and CA receiving $260).

It simply isn’t equitable for Texans to get to deduct their entire state tax liability and limit Californians’ deductions when Californians have to pay higher state taxes to fund Texans’ benefits. The very least the Federal government can do is give some of that Texas subsidy back to middle income Californians in the form of extra tax deductions.

I didn’t mean to pick on Texas here (go Astros!), it’s simply the second largest state and has relatively low state taxes.

Posted by rallykeeper | Report as abusive

TFF, you’re only responding to half of my suggestion, and you’re adding repatriated income to the issue. I am suggesting that any dividends paid to shareholders be subtracted from taxable income. If a company had $1B in pre-tax income, and distributed 75% of it as dividends, their taxable income would only be $250M, and even a 40% tax on that would result in a $100M, or 10% tax on profits. However, if they re-invested just $200M of that remaining profit in R&D or new factories, they would get a 50% tax credit, meaning they would owe no federal income taxes.

I would further allow companies to exempt all repatriated income from taxes, if it is distributed as dividends or re-invested. So if Apple wants to take $5B of their cash sitting in off-shore accounts and bring it home to build a factory, let them do it without a penalty.

As far as dividends being taxed, they should be taxed at the point where they are converted into personal income. If a retiree lives off $30,000 in dividends, then they should be taxed at the rate for that amount of income (in my plan, it would be 25% of all income over $25K, so the tax would be $1250). IF a wealthy individual is receiving $1M in dividends, they would be taxed at the maximum rate.

A low corporate tax rate only provides incentive to hoard cash. Hoarding is a tool for mercenary management, which most publicly traded companies employ, and does not benefit shareholders or employes, and hurts the economy.

Posted by KenG_CA | Report as abusive

@RueTheDay. I’d generally agree with you on the Federal government paying people to live in high tax states as long as those in high tax states actually got greater benefits than those in low tax states.

If I, as a Californian, want to spend more on education and healthcare, I don’t expect the rest of America to help pay for that.

However, I’m not paying higher taxes simply to pay more for education and healthcare. I have to pay higher taxes just to make up the difference between what my state receives from the federal government and what low tax states receive. And you want to take away the deduction I get for my subsidy. It’s already inequitable (and will never be fair), but making it more inequitable? How does that make sense?

Posted by rallykeeper | Report as abusive

@KenG, thanks for the explanation, it does sound like you’ve considered the implications for repatriation of cash (which is the key sticking point right now).

I suspect you would end up raising almost no corporate income tax under that proposal, but we would see higher dividends (taxed against the recipient) and greater investment (generating taxes other ways). Wish Congress could come up with something half as innovative instead of continuing the same old broken system for a decade after everybody recognizes it is broken.

Posted by TFF17 | Report as abusive

TFF, yeah, the goal isn’t to raise corporate income tax, it’s to force them to use their profits, or distribute them to people who will use them. Every dollar of profits that is reinvested in the economy is a dollar the government doesn’t have to spend to keep it from shrinking.

So what happened to just TFF? Did you forget your password while Reuters blogs were down?

Posted by KenG_CA | Report as abusive

LOL! There was a period when I couldn’t get the Reuters login to work reliably. Created the second account then (with a different email). No clue at this point which account is attached to which email, and I haven’t cared enough to figure it out.

Posted by TFF | Report as abusive

I can’t login from some browsers, including the latest Chrome on windows 8 (it works on all other versions of chrome on older windows and mac). So on this system I have to use FF to comment. It’s clear Reuters isn’t investing a lot in their website.

Posted by KenG_CA | Report as abusive

On the expensable dividends question, I’d be perfectly happy to see that (with dividends then treated as ordinary income), _or_ see the deductibility of interest payments eliminated. It’s ridiculous that we have this massive incentive built into the tax code to shift your capital structure towards fixed payments. It makes our entire economy more prone to de-leveraging shocks or “Minsky moments”, in the face of even a small shortfall of aggregate demand.

Posted by Auros | Report as abusive

The one issue with taxing dividends, though, is that you’d pretty much _have_ to then also treet LTCG as regular income, b/c otherwise you have simply created a massive incentive for companies to process payouts to shareholders through stock buy-back programs, so that many shareholders can hold for a year and then sell into the buy-back.

Posted by Auros | Report as abusive

Auros, I’m a believer in taxing capital gains at a rate inversely proportional to how long they were held. Own an asset for under a year, pay 70% in tax on the gain. Own it for 10 years, pay 10%. Or something along those lines. There’s no reason to reward short term speculation, and lots of reasons to encourage people to hold assets for a long period.

As far as share buybacks go, the money spent buying those shares would not be deductible, so companies would have to use after-tax income to buy the shares. I think this plan would stop that practice.

Posted by KenG_CA | Report as abusive

@KenG_CA “I’m a believer in taxing capital gains at a rate inversely proportional to how long they were held. Own an asset for under a year, pay 70% in tax on the gain. Own it for 10 years, pay 10%. Or something along those lines.”

-That is a BRILLIANT idea… reward real long-term investments in productive assets while heavily taxing short-term speculation. That would be a fantastic improvement on the status quo!

The larger issue of a cap on deductions is harder… the government wants to reward people for providing for their own healthcare, retirement, housing, education, and retirement. All those things make sence to me.

They should pick the low hanging fruit first. Double the tax credit for the 1st child and don’t offer any credit for any 2nd 3rd 4th… child born after 2013. That would bend the curve slightly and reward people to think about family planning. After all if we are going to offer a path to citizenship to anyone who successfully illegally enters the country then we should encourage smaller families unless we want to wake up in 2040 with 500 million people who all expect a American (circa 2006) standard of living.

Next lower the cap on the mortgage interest deduction and exclude all 2nd homes. We need to strongly strongly encourage the ownership of a moderately valuable 1st home. That gives people access to low cost credit (because they have collateral), provides for stable neighborhoods, and gives people something to lose if they decide to become a meth dealer.

Next lets enhance the value of work and investment. Don’t tax the first 50,000 of earned income at any level. Don’t tax the first 10,000 of dividend or gain income at any level. Boost the rates on higher levels of income earned or otherwise but lets pull more people into the pool of workers and investors.

Posted by y2kurtus | Report as abusive

“Don’t tax the first 50,000 of earned income at any level.”

You are exempting a huge amount of income — presently this income is taxed at a 15% rate through FICA, even if deductions and exemptions exclude it from federal income tax. Not sure it is possible to make up for an exclusion of this size.

Besides, in the last five years we’ve seen the corrosive effect of policies like this. A Republican candidate declaring that 47% of American households believe the government owes them a living, simply because they don’t owe income tax. Better to have a low marginal rate that kicks in early — so everybody contributes something, even if it isn’t much. Find ways other than redistributive tax policies to get wealth into their pockets, such as subsidized food/housing/medical care for those in need.

Posted by TFF17 | Report as abusive

FICA is not a tax in my view… I don’t count a program which returns 100% of my contributions (social security) or 300% of my contributions (Medicare) as a tax.

Keep FICA. Lift the cap on social security withholdings to cover all earnings from $1 to infinity just like Medicare (THEN it would be a tax on high earners.)

Then redesign Medicare so with a per capita average spend at 1/2 the current spend rate. Have high blood pressure and high colesteral here’s your $4/month generic prescription fill-able at Walmart.

Need a hip replacement…. not so much… you’re going to need to cover that on your own or have your family or church group raise half the cost. Net result costs drop by half and the people who deserve/earned/worked for the care still get it.

Posted by y2kurtus | Report as abusive

Yeah, I still don’t get your accounting on FICA, especially since the value of those future promises is suspect.

I do agree that lower-income households are likely to get back everything they pay in (and then some!), but couldn’t you also say the same of federal programs funded through the income tax? Does it really matter that with Social Security somebody is tallying an account with our name at the top?

Interesting proposal on Medicare. A bit heartless, perhaps, but I suspect we’re headed that direction. The present system is unaffordable.

Posted by TFF | Report as abusive

I don’t have a link but the accounting was done by the New York Times. They basically said for the current boomer generation social security was a wash with lifetime contributions of that generation as a whole expected to approximate benefits received by that generation as a whole.

On the medicare side The NYT calculated that the average boomer couple paid 100,000 into medicare and would extract on average $300,000.

My plan was not meant to be any more heartless than the way we allocate donated organs. If your resources are X than your budget is X not Y. If you want to offer the entire populous an identical medical benefit without any thought of merit or contribution (pretty much the opposite of the Social Security system) I think lots of people would vote for that plan on the grounds of fairness. That is for the most part the status quo.

In that system my wifes 82 year old grandfather (the most deserving person alive based on his 35 year working life and combat veteran of 2 wars) gets flown in a life flight helicopter from the local hospital to the intensive care unit at the regional medical center to extend his life by 8 months. The cost would be hard to even estimate but I’ll throw out $500,000. I loved that man but what was our return on investment for that care.

Would those dollars have a greater impact for good if spent on pre-k for 4 year-olds?

Posted by y2kurtus | Report as abusive

“Would those dollars have a greater impact for good if spent on pre-k for 4 year-olds?”

Elizabeth Seton Academy in Boston, an independent Catholic school serving inner-city families, would be thrilled to have a small fraction of that $500k. The total sum would take 25 girls all the way from 9th grade into college.

So yes, there are ways to spend that money for greater impact. I agree that our medical system should explore hospice care as an alternative — can be better for patients, families, and the taxpayer. Life is measured by the quality of the days, not the number of days.

Posted by TFF | Report as abusive