House GOP proposes raising Medicare age to 67

[explanade]

Their proposal to avoid the fiscal cliff includes raising the medicare age to 67, slower COLA adjustments to Social Security and $800 billion in new tax revenues (over 10 years) via capping or elimination of deductions but definitely no increase in tax rates.


Counteroffer: Medicare, Social Security on the table as GOP issues new ‘fiscal cliff’ offer - The Washington Post

 

[pb4uski]

Why wouldn't the age that one is eligible for Medicare align with your SS FRA? The fact that it was different never made sense to me. It would also make things simpler.

 

[Midpack]

Yes they did. Seems like they're all floating trial balloons and maneuvering (as always), not a bad thing IMO, knowing the solution involves putting everything on the table. It's encouraging that none of the ultimatum/extreme characters from either side have taken the stage yet (that I've noticed). This isn't going to be pretty, but hopefully they get something substantial done...not taking bets yet.

 

[kyounge1956]

Dismissing the idea of raising any tax rates, the Republicans said the new revenue would come from closing loopholes and deductions while lowering rates.

Does anyone know whether the Republican proposal included a list of the specific loopholes and deductions to be eliminated, and the amount of additional revenue expected from each? If so, can you provide a link to the list? thx

 

[easysurfer]

On CBS This Morning, it was mentioned that in order to have a deal to avoid going over that cliff, both sides really need to have a deal by Dec 15th as the process itself takes at least about two weeks to move through to completion.

 

[Brett_Cameron]

oink

 

[frayne]

Dollar to a donut, the fix is already in and all this back and forth is just for show.

Bacon anyone ?

 

[easysurfer]

Dollar to a donut, the fix is already in and all this back and forth is just for show.

Bacon anyone ?

Kinda like going to a car dealership and having to go through the negotiating dance before coming to agreement?

 

[samclem]

Does anyone know whether the Republican proposal included a list of the specific loopholes and deductions to be eliminated, and the amount of additional revenue expected from each? If so, can you provide a link to the list? thx

I haven't seen a list of such loopholes/deductions. Most of the talk (during the election and more recently in Senator Bob Corker's proposal) have steered clear of the minefield of eliminating specific deductions. Instead, the proposals cap these deductions (e.g. Corker would limit them to $50,000). I think this is designed to avoid targeting any specific sacred cows. It's probably a politically smart approach. Also, as a practical mater, with just a few weeks left it may be impractical to weed through the mountains of special tax treatments and deductions. This effectively neutralizes many of them in an easy way. Unfortunately, it leaves the tax code a mess. On the other hand, it might serve as an effective brake on further encroachment of deductions and "special deals": If such a cap remains in place, it would be very obvious if someone tried to lift it.

 

[explanade]

Does anyone know whether the Republican proposal included a list of the specific loopholes and deductions to be eliminated, and the amount of additional revenue expected from each? If so, can you provide a link to the list? thx

Supposedly the idea of caps or closing loopholes is not new. It's something they've been proposing since August 2011 when they had the debt ceiling standoff -- which incidentally they want the option to use again to force through more cuts.

Romney didn't specify which deductions either.

What is new today is the GOP specifying the changes to entitlements.

 

[Hamlet]

I think they are going to have to come to a short term agreement on the way to a long term agreement. As you said, they can't work all of this stuff out in a few weeks.

Ultimately, I find it amazing that both sides are willing to give the upper middle class a complete pass on taxes. I think they need to weed out some of our deductions, and I don't think they should limit it just to the $250k+ crowd.

As a married homeowner (and new father), I am getting an incredibly sweet deal tax-wise. We pay lower tax rates than many people I know that make half as much. That doesn't make sense to me.

I haven't seen a list of such loopholes/deductions. Most of the talk (during the election and more recently in Senator Bob Corker's proposal) have steered clear of the minefield of eliminating specific deductions. Instead, the proposals cap these deductions (e.g. Corker would limit them to $50,000). I think this is designed to avoid targeting any specific sacred cows. It's probably a politically smart approach. Also, as a practical mater, with just a few weeks left it may be impractical to weed through the mountains of special tax treatments and deductions. This effectively neutralizes many of them in an easy way. Unfortunately, it leaves the tax code a mess. On the other hand, it might serve as an effective brake on further encroachment of deductions and "special deals": If such a cap remains in place, it would be very obvious if someone tried to lift it.

 

[haha]

Ultimately, I find it amazing that both sides are willing to give the upper middle class a complete pass on taxes. I think they need to weed out some of our deductions, and I don't think they should limit it just to the $250k+ crowd.

As a married homeowner (and new father), I am getting an incredibly sweet deal tax-wise. We pay lower tax rates than many people I know that make half as much. That doesn't make sense to me.

Lodge a complaint with the congress and president.

But don't worry, once we get on the taxes going up train, we will learn that there are not enough rich guys, or that too many so called rich guys have found ways to stucture income to minimize taxes, and you will certainly get your chance to pay more.

Ha

 

[pb4uski]

...As a married homeowner (and new father), I am getting an incredibly sweet deal tax-wise. We pay lower tax rates than many people I know that make half as much. That doesn't make sense to me.

I don't get that - can you explain what you are talking about? Since tax rates vary with income if you make twice as much as someone else your tax rate should be higher.

 

[GrayHare]

Raising the age makes sense to me as it brings the coverage period closer to what it had been when these entitlement plans originated.

 

[samclem]

I don't get that - can you explain what you are talking about? Since tax rates vary with income if you make twice as much as someone else your tax rate should be higher.

Not exactly--Tax rates vary by the filer's taxable income. It's entirely possible for a single taxpayer taking the standard deduction to pay a higher marginal tax rate than a married couple with a child and a lot of mortgage interest plus other deductions who are earning twice as much. And that's before we get into cap gains and dividend income treatment.

Our tax code is a mess.

 

[scrabbler1]

I would be okay with raising the Medicare age to 67 IF there was a method for an early buy-in the same way someone can begin taking SS at an age less than the FRA and agree to a reduction in benefits. Medicare would then be slightly costlier for someone who chooses to begin receiving benefits at, say, 65 (or less, perhaps down to 62, the minimum age to begin claiming SS benefits).

Not sure how this would interact with the PPACA whose exchanges would enable someone to buy HI although there are pretty high multipliers by age. There might be some adverse selection issues with those who do an early buy-in.

 

[NW-Bound]

Ultimately, I find it amazing that both sides are willing to give the [-]upper[/-] middle class a complete pass on taxes.

FIFY. With the above fix, I agree with you 100%.

I scratched my head over that observation, then it occurred to me. That's where the votes are. Elementary, Mr. Watson. Heh heh heh...

 

[JPatrick]

I am not too keen on the COLA rework, particularly now with the demise of private pensions and diminishing wealth in the middle class. Social security with an honest COLA is one of the few lifelines many people have to look forward to.
Of course it can be argued that the current COLA is not truly reflective of real world inflation.
To me it makes more sense to raise the salary limit that is taxed and /or start nudging up the retirement age.

 

[samclem]

Another option to slowly broaden the tax base: This proposed cap on deductions: set it at $50,000 and leave it there--no indexing for inflation. At the same time, stop indexing the standard deduction and personal exemptions for inflation. Gradually, inflation will bring more and more Americans into the ranks of those who pay federal income taxes.

Don't expect to hear this idea discussed.

 

[haha]

I don't get that - can you explain what you are talking about? Since tax rates vary with income if you make twice as much as someone else your tax rate should be higher.

Why should your rate be higher? Tax amount, perhaps, though that is arguable. Does John Paulson use more government services than some high school dropout?

Ha

 

[FinanceDude]

This will end ugly any way you look at it.........

 

[donheff]

I expect the Medicare age will go up (undoubtedly with some grandfathering for 60+ers or so). They will probably compromise on top rates and get some sort of symbolic change (e.g. only tap $1M+ incomes, or split the difference on the rate). 50/50% that we will go over the cliff before they get it done.

I wish they would not make the lower rates for the rest of us permanent. If they instead puts ours on a gradual slope restoring them to the 2000 levels in 4-8 years it would help whack the deficit. No way we will see spending cuts sufficient to get the job done. They should also get rid of the debt ceiling process. No way Congress critters should be able to make a deal on taxes and spending and then threaten default 6 months later to get what they agreed to forgo.

 

[Purron]

This will end ugly any way you look at it.........

Yup. You got that right FinanceDude.

 

[REWahoo]

They should also get rid of the debt ceiling process.

You think there is a snowball's chance in Texas that Congress will cede that power to the President?

 

[Richard4444]

With so many of the personal bankrupties due to an unforseen medical crisis, by raising the age to 67 (without allowing a buy-in as a prior post mentioned), there will be more bankruptcies - - - unless, perhaps ObmaCare's mandate to cover pre-exisitng condx allow for fair priced plans.