Hillary's "class" dilemma (Social Security versus health insurance)...

[regnaD kciN]

So, Senator Clinton announced yesterday that she was opposed to lifting the Social Security tax ceiling because it would constitute a "tax increase" that would adversely affect working people.

While the initial reaction of many might be to laugh out loud at her notion of "working people," I will grant her premise -- that there may be some (although not many) in the middle class with incomes above the $91,000 cut-off limit. Thus, eliminating that cap would constitute a tax increase for them.

But how much of a tax increase would it be? Let's assume, for the moment, that you have a middle class worker -- say a technician or software engineer -- earning $100,000 per year. (I think a substantially higher income than $100K would undeniably put one in the upper-middle category at least.) At that salary, only an additional $9,000 would be eligible for Social Security taxation, and, at going tax rates, that would work out to around $675 per year, or slightly under $57 per month, in additional taxes. From another way of looking at it, it would amount to 5/8ths of one percent of one's take-home pay.

However, Senator Clinton is also proposing a health care plan based on "individual mandates" -- in other words, if your employer doesn't offer you health insurance, you will be required, by law, to purchase health insurance on your own. How much is that going to cost? Around this part of the Pacific Northwest, a basic health insurance plan for a family (the most cost-effective option for a couple with even one child) runs between $1,200 and $1,500 per month; in other words, $14,400 to $18,000 per year. If you're earning that $100K salary, your mandated health costs would be at least 14.4% of your salary, as opposed to the additional 0.675% caused by a lifting of the Social Security cap. If you earn $50,000 per year, the health care mandate would eat up 28.8% of your income versus no increase in your Social Security tax whatsoever. And, if you're a minimum-wage worker (and those in low-paying jobs are the least likely to receive health-care coverage from their employer), the "individual mandate" would eat up...well, pretty much your entire salary.

Now, of course, Senator Clinton's plan isn't simply "pay the insurance industry's going rates or else." Her plan proposes a series of lower-cost health care coverages than currently offered by private insurance...although what that "lower cost" might be, it doesn't say. Her plan promises tax credits to help pay for insurance costs...although how much that help might be, it doesn't say. And her plan also promises to put a cap on costs, so that no one would be forced to pay more than a certain percentage of their income on health care...although, once again, how much that percentage might be, it doesn't say.

But the $64,000 Question (maybe literally) is the following: however much aid the government might provide to "working people" under Senator Clinton's health-care plan to help them with the costs her plan mandates, by law, that they pay, is it likely that the resulting costs to "working people" would be less than the mere $675 per year that raising the Social Security cap would cost a "working person" earning $100,000 per year? Can you imagine providing full health care for the average American, under the current system of non-single-payer insurance, for a total cost to that American of less than $57 per month? If not, then doesn't it seem that Senator Clinton's squeamishness at imposing a Social Security "tax increase" on those earning close to (or well over) a six-figure income, while mandating considerably higher amounts for health insurance from those earning well under that amount, might stem from a concern for someone other than "working people?"

[LSparkle]

1. Her Goldwater Girl roots are showing ...

Bill is the populist -- who came from nothing and has empathy for working people (and not the kind earning $100K a year). She, on the other hand, hasn't had to work her way up from nothing and has less understanding for the little people.

[WHEN CRABS ROAR]

2. Bottom line. Poor people can't pay for health insurance.

Forget tax credits too.

[juno jones]

3. I laughed at this

"runs between $1,200 and $1,500 per month"

[papau]

4. It is not a 91000 limit - its over 102000 for 2008. High Cost areas like NYC take 40000 off salary

as extra expense - making that high salary a bit more "middle-class"

That said, she should remove the cap and sell it as a tax cut via lowering the payroll tax rate for employees by 1.5% - this would give a small boost to the financing and make it "fairer" - and it does not need a boost at all as the "low cost" projection shows no deficit ever - and that projection uses the ridiculous 1.6% GDP growth rate that Bush demanded when he took office (Clinton used a slightly less ridiculous rate of 1.7% for the out years).

There is no SS funding problem - but I approve of removing the wage cap