By JLP | January 27, 2010
Read: A GOP Road Map for America’s Future by Paul D. Ryan
In the article, Ryan lists several components of the GOP’s Road Map. I thought it would be interesting to look at each of them. NOTE: As you most of you know, I am fairly conservative and vote Republican [although I’m not tied to one particular party, I have never voted for a Democrat]. But, this is not an attempt to push my ideology down your throat. Rather, I want to look at this ‘road map’ to see if it has merit.
Okay, so here are the components mentioned in the editorial:
• Health care - The plan ensures universal access to affordable health insurance by restructuring the tax code, allowing all Americans to secure an affordable health plan that best suits their needs, and shifting the control and ownership of health coverage away from the government and employers to individuals.
It provides a refundable tax credit—$2,300 for individuals and $5,700 for families—to purchase coverage (from another state if they so choose) and keep it with them if they move or change jobs. It establishes transparency in health-care price and quality data, so this critical information is readily available before someone needs health services.
State-based high risk pools will make affordable care available to those with pre-existing conditions. In addition to the tax credit, Medicaid will provide supplemental payments to low-income recipients so they too can obtain the health coverage of their choice and no longer be consigned to the stigmatized, sclerotic care that Medicaid has come to represent.
I’m all for giving control to individuals. I like the idea of a tax credit but worry that it would only set a pricing floor for health insurance.
• Medicare. The Road Map secures Medicare for current beneficiaries, while making common-sense reforms to save this critical program. It preserves the existing Medicare program for Americans currently 55 or older so they can receive the benefits they planned for throughout their working lives.
For those under 55—as they become Medicare-eligible—it creates a Medicare payment, initially averaging $11,000, to be used to purchase a Medicare certified plan. The payment is adjusted to reflect medical inflation, and pegged to income, with low-income individuals receiving greater support. The plan also provides risk adjustment, so those with greater medical needs receive a higher payment.
The proposal also fully funds Medical Savings Accounts (MSAs) for low-income beneficiaries, while continuing to allow all beneficiaries, regardless of income, to set up tax-free MSAs. Enacted together, these reforms will help keep Medicare solvent for generations to come.
• Social Security. The Road Map preserves the existing Social Security program for those 55 or older. For those under 55, the plan offers the option of investing over one-third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to federal employees. This proposal includes a property right, so those who own these accounts can pass on the assets to their heirs. The plan also guarantees that individuals will not lose a dollar they contribute to their accounts, even after inflation.
The plan also makes the program permanently solvent by combining a modest adjustment in the growth of initial Social Security’s benefits for higher-income individuals, with a gradual, modest increase in the retirement age.
Of all the government programs, Social Security ticks me off the most. I hate the fact that they can raise taxes collected each year and we just have to pay in. We get no say whatsoever. Currently, the maximum amount paid into the program is over $6,621.60 (or $13,243.20 if you include the employer’s portion). That’s A LOT of money! Oh how I’d love to have control of that money. I’m 100% positive I could manage it better than the gubment.
I would love to see this program reduced in size and scope. Reduce the taxes and the benefits. I know I’m probably dreaming…
• Tax Reform. The Road Map offers an alternative to today’s needlessly complex and unfair tax code, providing the option of a simplified system that promotes work, saving and investment.
This highly simplified code fits on a postcard. It has just two rates: 10% on income up to $100,000 for joint filers and $50,000 for single filers, and 25% on taxable income above these amounts. It also includes a generous standard deduction and personal exemption (totaling $39,000 for a family of four), and no tax loopholes, deductions, credits or exclusions (except the health-care tax credit).
The proposal eliminates the alternative minimum tax. It promotes saving by eliminating taxes on interest, capital gains, and dividends. It eliminates the death tax. It replaces the corporate income tax—currently the second highest in the industrialized world—with a business consumption tax of 8.5%. This new rate is roughly half the average in the industrialized world and will put American companies and workers in a stronger position to compete in a global economy.
I actually disagree with this one. I think as long as we have an income tax, we should tax interest, capital gains, and dividends. My reasoning is that it’s not fair to not tax these since it’s conceivable that very wealthy families could have nearly all of their income come to them in the form of interest, capital gains, and dividends, leaving them with no or very small income tax burden. Having the same rates for everyone and taxing all income is the only fair way to treat an income tax.
So, what are your thoughts on this ‘plan’? Do you like it? Do you dislike it? Like I said earlier, I am conservative. I don’t like the government making decisions for people that they should be making for themselves. The government’s job should be to provide for national defense and basic infrastructure and then get out of the way and let us handle the rest.