If we were forming a new government today, would we devise a social safety net which would allow multimillionaires to participate as automatic beneficiaries?
Of course not. The only forms of government established by elites for the benefit of elites are socialism and dictatorships. Take a look around the globe.
Americans who succeed in life pride themselves on self-reliance, determination and hard work. Why would any super-wealthy person succumb to “sucking at the federal teat” as former Sen. Alan Simpson of Wyoming used to eloquently ― and bluntly ― describe entitlement programs?
Many people, particularly young voters, say government has the “duty” to take care of poor people as a moral imperative. Beyond providing for the common defense and security of our nation, taking care of those less fortunate is a primary part of annual government spending at all levels.
However, if young voters think every dollar of federal entitlement social spending is going to help poor people ― they are sadly mistaken, deluded and deceived.
Welfare is described as “a range of government programs that provide financial or other aid to individuals or groups who cannot support themselves.” Transferring financial assets from a taxpayer to a beneficiary in existing entitlement programs for any reason is welfare. It is not voluntary because payroll taxes are mandatory and you can go to jail for non-compliance.
However, under current entitlement law, it doesn’t matter if a person is rich or poor ― if you qualify based on age or income, you get the transfer payment from the government.
I was reminded of this inequity when I heard about a gentleman who did very well in business and retired at age 50. God bless him. He has paid off all of his loans for several homes, a few cars and college education for four children in full. He has saved well over $10M in liquid assets which could be accessed at any time by him for any purpose. He and his wife live on $50,000 per year from income on his investments.
He applied for individual health insurance on the open market and found out ― to his great surprise ― he qualified for a $1,450/month Affordable Care Act (ACA) payment from the federal government in the Obamacare exchange. By law, he will only have to pay $145 out of his own pocket each month to satisfy his 10% share of the 90/10 ACA match.
This man has $10M of liquid financial net worth in case you missed it.
This guy, being an honest sort, challenged the ACA administrator to see if this was correct since he had a friend still self-employed ― not worth $10 million ― who found out his private health insurance was going to cost him $1,500/month in 2024 ― with no subsidy at all. The ACA agent assured him it was correct since taxable income is the sole determining factor when determining ACA eligibility.
That doesn’t make any equitable sense in terms of what the purpose of our democratic republic is supposed to be all about. A wealthy person was never intended to be a beneficiary of Obamacare ― poor people and working near-poor people were.
A rarely talked-about but important factor in federal spending has been the amount of welfare allocated to uber-wealthy people. American citizens have been convinced by liberal politicians not to touch any of the entitlement programs which deliver benefits to uber-wealthy billionaires because, as liberals say: “It will undermine the integrity of such-and-such program”.
To use an old word, that is hogwash, which came from the Middle English word “hoggewasch” meaning “scraps of food (swill) thrown to swine”. There are over 2.1 million American families with a net worth over $10M. Most of them are older and probably draw Social Security and receive heavily tax-subsidized Medicare health coverage as well. They paid payroll taxes as long as they drew a salary and would do so regardless of whether they receive any benefits or not in the future because that is how taxes work.
Every liberal screams “don’t means-test entitlements!”. What are they talking about? Medicare Part B is already means-tested in a six-step escalated manner. Lower-income seniors pay only $164/month while wealthier seniors pay up to $560/month based solely on income.
On average, every Medicare recipient will receive almost twice as much in benefits after age 65 as they paid in Medicare payroll taxes. Uber-wealthy folks who really don’t need any government assistance at all ― and who pride themselves on being totally self-reliant and successful on their own ― get a healthy taxpayer-provided health care subsidy in Medicare.
Since Congress has done nothing to arrest the explosion in spending since 2001, a good place to start would be means-testing every entitlement spending program and provision in the U.S. tax code.
We have to start somewhere.
