What About This…? 12.7.2017

Tax Reform?

If businesses receive such a significant tax cut, how much of that saved cash will be spent on increasing the wages of workers and how much will purchase automation of some sort? From automated telephone answering (no more human jobs) to automated assembly lines (no more human jobs), who benefits?

They say the “average” tax payer will save hundreds, perhaps thousands.  But as we consider this “average” taxpayer, there are many aspects to the proposed changes that come to mind.

Just one of them is the “universally hated ACA (Obamacare)” requirement that everyone be covered by health insurance, the Health Insurance Mandate, and the sizable penalty if one is not.  With the Mandate gone, many will choose to refrain from buying insurance.  And many will not need insurance during the year.

But when the few do incur extreme health care costs, shouldn’t those admittedly rare but huge costs somehow be “averaged” into the cost/benefit of doing away with the Mandate?  And since many who will not purchase insurance fall into the category of taxpayers who have assets that can be attached to pay for extremely high medical bills like homes, cars, bank accounts, business and so on, how does that “average in?”

No one expects such bills to befall their family, and once illness or trauma happens there is no control one can place on the cost. I speak, as can so many others, from personal experience.

I may be mistaken, but isn’t this one of the situations that Obamacare was instituted to prevent?  As I recall, many people had no insurance, or had such poor insurance that when even relatively simple medical procedures were required their finances were devastated.  But when the kids need shoes or the car that takes us to work needs tires, and the family is healthy, who would “splurge” on health insurance purchases?

Doing away with the Mandate does increase the “average” savings of many taxpayers, and that is just one of the ways this proposed Tax Reform accomplishes such “average” savings.

When we get into the mathematical wonderland of “averages” and how far down we dig to decide which costs should and should  not be “averaged,” we ought to rememer the state of affairs when a few are stuck with stratospheric (or maybe not all that stratospheric) medical bills after weathering illness or trauma without insurance.

Yes, you are absolutely correct!  It is not who pays for medical care that should be the question. The question should be “why does medical care cost so ______ much?” But that is a discussion or another time.

Now, we have to consider this proposed Tax Reform and all the ramifications its many mysteries offer us. Doing away with the Mandate is only one of them.

Who gets the “average” savings?  Who does not?  Are these trade-offs worth the risks we face by embracing them?  Who actually gets the really good stuff, and who really pays for that stuff?

You’re an “average” taxpayer, right?  What do you think?