Some progressive agenda items include lowering the medicare age or raising the cap on SS. Since these are federal programs, are the states able to amend the taxes for these programs to do that?
Example, say California wants to offer a subsidized medicare buy in option for anyone 50+, but doing so requires the medicare tax be 3.5% instead of 2.9%. Or say they want to add an additional 4% tax for SS on incomes over 200k (I believe this was Obama’s policy before he became president) to offer a lower early retirement age of 58 with the goal of these changes (access to medicare & SS in ones 50s) to encourage people in their 50s to retire early and open up jobs.
Since these are funded by FICA taxes, can states create their own SICA esqe taxes to alter these federal programs and expand them?
I don’t think that’s possible without a huge change in Medicare/SS. They would be have to be run more like Medicaid, which is funded by both federal and state funds and is managed by individual states.Because the states manage it and partially fund it , states can expand coverage beyond what is federally required*. Medicare and SS are neither funded or managed by the states, so California would have to implement/fund its own separate programs to provide for retirement income at 58 or subsidized medical care for those over 50.
and it’s causing some confusion in political ads in NY. There’s an ad that says the Republican candidate wants to get rid of dental care for seniors under Medicaid and people are saying " WTH, Medicare doesn’t have dental coverage"
The facts in the ad are correct - Medicaid does currently cover dental care in NY for adults (including seniors who are also eligible for Medicare) and the candidate has said he wants to eliminate this optional coverage although he does want to eliminate it for all adults, not just seniors.
That is my assumption. If California wanted to enact a high income tax to fund SS for people ages 58-62 they could, but I don’t know if they could use that tax money and give to to the federal government in exchange for the federal government opening the SS program up to younger people in California.
I suppose a state could create an internal bridge benefit without federal involvement. Likely administration costs would be higher because it lacked the economy of scale. That certainly seems easier than getting a window to contribute to and have state specific benefits allowed in federal law. Trying that would almost certainly involve discussions about guaranteeing full funding from the state (when economic assumptions are off in anyway) and paying an administration fee on top of it (because other states won’t want to pay for extra admin costs).
There’s a lot of pretty wild assumptions being made in the plan anyway:
Jobs are zero sum.
Significant number of workers would stop working instead of drawing benefits while still working (like SS and Medicare allow)
= Increased marginal tax rates won’t create an incentive for businesses to relocate facilities/jobs to states without the plan
Significant numbers of free riders won’t move in at or near eligibility just to collect benefits they haven’t paid in for.
Free rider won’t stay in the labor force in numbers greater than current residents leave it
No economic dislocation based on possible demographic shifts
No significant near border effects.
Interesting proposal The devil’s in the long term market details though.
Those are valid counterpoints. From what I know of it, SS was created in part to alleviate unemployment by allowing people to leave the workforce. SS was a major program, another being looked at in the 30s was reducing the workweek (like France eventually did when France cut it to 35 hours to reduce unemployment). However France cutting their workweek just caused employers to increase productivity, not hire new workers.
I don’t know the stats but (at least before the ACA) I was under the impression there were millions of people in their 50s who wanted to retire but couldn’t because they couldn’t risk going uninsured until medicare kicked in and because they were either uninsurable on the private market or couldn’t afford the $1000-2000/month in premiums. My assumption is a medicare buy in for $300ish a month for people in their 50s would allow them to retire easier. I have no idea how much the ACA has alleviated the problem of job lock and people in their 50s wanting to retire but not being able to due to health care.
The part about jobs being zero sum, I’m not sure. There are only about 130 million jobs in the US, about the same as in the 1990s despite the US population being 40 million larger now. The ratio of population to jobs is getting worse due to automation and productivity.
SS seems designed to encourage you to stop working (if you take it early) as it is taxed if you also earn income. So something similar could be proposed, if you take it early you lose benefits if you still work.
The point about higher taxes making businesses consider relocation, or people moving into the state, etc are all valid. I’m not sure how you’d deal with that. I don’t know how Vermont is going to stop people from moving there en masse when they enact single payer either.
Claverhouse, since you’ve received several previous warnings about it, you know very well that political jabs are not permitted in GQ. This is another. Don’t do this again unless you want your posting privileges to come under discussion.