Michael

I'm glad to hear that you have a couple million set aside for catastrophic illness since an insurance won't likely touch you. Back in the 1950's, if you were retired, you just died in your house.

Tegwyn

You can buy catastrophic insurance you know. It covers over and above traditional insurance. Quite high coverage without the million$ bank balance. Don't knock me for trying to take care of myself and not look to Uncle Sam to fix it.

Michael

Currently the only thing I know of that is available for anyone over 65 is medicare supplemental and medicare advantage. Medicare supplemental covers the uncovered 20% outpatient costs since 100% of the hospital costs are covered by medicare. Medicare advantage is subsidized with the cost that medicare would pay plus about 14% or about $18,000 per year to the insurance company. Either once costs about $100 to $500 per month per person to supplement to 100% coverage.

Without medicare, 100% of the cost will be on the individual if they can find and insurance company that will carry them since insurance companies will not cover people that would likely get sick unless they are part of a large group.

I'm not knocking you. All I'm saying is that if Grover Norquest gets his first wish, the amount of federal taxes received by the government would be cut in half. His second wish would be to reduce taxes to $0.

Lion in Winter

And there, in a nutshell, is the difference in the underlying philosophy of the U.S. and most of Europe, in my opinion anyway. Americans (yes, I know good old sweeping generalization) view government as the enemy, something to be controlled and feared, where one receives "help" only if one is a personal failure, with "personal failure" being very often defined as failure to amass money. The social (not socialist, before anyone says that) view of government is that it is there to work for us and solve the problems a society generates, make life better. It doesn't do it alone, as a matter of charity - it is us. We pay into it and it administers common goods, goods that could never be achieved by a bunch of individuals. In the US, the government is seen as having a minimalist role that does just enough to keep us apart, apart from each others' throats for example (administers criminal law, etc). In Europe, its job is to bring people together, actually knit the fabric of society.

So we have socialized medicine, for example. We all pay, all the time, so that it is free at point of service for all of us to use when we need it, and we count that as an advance in society, just as we do public education. We consider that we are all better off if people are not made destitute by their medical expenses or die of curable illnesses because they could not afford early tests and care. A society needs cohesiveness or it isn't a society, it's just a bunch of people running around pepper-spraying each other in Walmart.

Giantaxe

Isn't "Uncle Sam fixing it" by making the cost of those insurance policies tax-deductible?

Michael

Although I agree with part of what you say, there will be cuts in just every developed country in the world and the cuts will be large. Countries can't keep running ever increasing budget deficits and they can't keep increasing taxes just because there are more retirees that need help. The only question is whether there will be a balance of tax increases and budget cuts so that the pain is shared more equally. In my opinion, it is just as insane for the democrats to insist that they protect all the current benefits of social security and medicare as it is for the republican to insist that all the cuts come from retirees, the poor, and others that need help all the while reducing taxes.

Lion in Winter

That is rather a different question from the one I was addressing.

However, to your point, in a country where 75% of the wealth is in the hands of 10% of the population, on the face of it it would seem perfectly reasonable to inflict the pain in a progressive manner (as opposed to regressive).

Michael

It is not a lot different than in Europe. Wealth distribution in Europe is not much better than the US where the top 10% control the vast majority of the wealth. In fact the top 10% in Switzerland own a greater percentage of wealth than the top 10% in the US. Some countries in Europe may not be as extreme as Switzerland or the US which are about 70% but the 50% range is not uncommon throughout Europe.

The percentage of wealth at the top as a percentage has been increasing for the past 30 years in almost every developing countries. If this were not so, European countries would not have medium family incomes at a similar percentage to the US as they had 30 years ago. As in the US, the vast majority of income increases went to the top 10% in Europe as the bottom 90% wages stagnated.

That likely means that wealth in Europe is primarily redistributed among the bottom 90%. See page 46 in the following document.

http://www.iariw.org/papers/2006/davies.pdf

Giantaxe

Social and economic mobility is now higher in Europe than the US, however, so logically a similar concentration in wealth is less of a societal problem.

Lion in Winter

European taxes (at least in the rich countries) are more progressive than in the US though. And I might also be willing to make a case that they should be more progressive yet. This isn't a US vs UK thing at all.

Michael

But there is also an increasing number of countries (eg. Greece, Ireland, Italy, Spain, Portugal, Iceland) that won't likely be able to sustain government services/benefits as in the past. The mobility may possibly come to a halt if those services/benefits can't be sustained as more prosperous countries are inundated with people from countries that can no longer afford those services/benefits.

Michael

I agree but tax rates don't mean much when you are wealthy and have a good tax accountant. In the US, the highest marginal tax rate was 87% in the 1960's but the rich still didn't pay that much taxes.

Giantaxe

Maybe. Otoh, I very much doubt those countries are going to be resistant to raising taxes, especially for wealthier people as is the case in the US. Actually, it's even worse in the US where one party actually wants to reduce taxes for the wealthiest at the same time as cutting services for the most vulnerable members of society.

Michael

That was a major problem in Greece and has always been a problem in Italy. Greece had the doctors tax which always came out to 0% and Italy is well know for tax evasion for the rich.

scrubbedexpat099

You missed the obvious one, UK.