Wednesday, August 8, 2012

We Die Broke, the Rich Live Longer and Richer

Nearly one in two Americans -- 46 percent -- die with virtually no financial assets (or less than $10,000) according to a recent study by economics professors at MIT, Dartmouth and Harvard. In fact, 19 percent of Americans die with 'zero' financial assets, the study found.

The study found that many of these people with modest assets rely "almost entirely" on Social Security benefits to survive, own no housing property, and are in poor health.

Poorer Americans die younger, in part because they cannot pay for medical emergencies, according to the study. And before death, poorer Americans' quality of life is significantly lower than the quality of life of their rich counterparts.

Many of these Americans who die without assets in effect outlive whatever retirement savings they may have.

Mitt Romney would like to eliminating the estate tax. The GOP calls this the "death tax". In 2011 and 2012, wealthy couples will be able to exempt from their estate tax the entire first $10 million of their fortunes. In 2010 and 2011, the tax deal's fine print stipulates that the lifetime gift tax exemption jumps from $2 million per couple to $10 million a couple.

With a higher new lifetime gift tax exemption and a wide-open Walton loophole, estate tax expert Stephan Leimberg recently explained to Forbes, the rich will be able to shift “an unbelievable amount of wealth” beyond the reach of the IRS.

The Republicans want to raise the age for retirement, moving the goal post back several years for those who can qualify for Social Security, saying it wasn't meant to be used as a pension fund, but as a "safety net" for the elderly. The statistic they site is that people in America are living longer. But the life expectancy has mostly increased for wealthier people, for those who have access to better healthcare and don't have to engage in extremely labor-intensive work.

Forbes magazine, quoting the World Health Organization, reports that "people further down the social ladder usually run at least twice the risk of serious illness and premature death of those near the top."

A 2008 study by the Congressional Budget Office found that the life expectancy gap between the rich and poor in the United States, as well as the educated and less educated, has been growing since the 1980s.

The CBO says that raising the eligibility ages for Social Security and Medicare would also reduce people's lifetime Social Security benefits, and cause many of the people who would otherwise have enrolled in Medicare to face higher premiums for health insurance and/or higher out-of-pocket costs for health care.

For tax years starting on or after January 1, 2013, ObamaCare™ imposes a new 3.8% Medicare tax on "net investment income" in excess of specified amounts. Also under the new law, starting in 2013, high-income individuals will pay another 0.9 percentage points on earned income over $200,000 ($250,000 if married). The GOP may want to repeal ObamaCare™ for this reason alone.

The top 1% doesn't need ObamaCare™. They have been installing full-fledged emergency rooms right inside their homes, each complete with an array of medical gear that mirrors what the White House has available for the President. The company that installs these emergency rooms charges up to $1 million per installation.

Meanwhile, every year $1 trillion in personal income for the rich is not taxed at all for Social Social Security and Medicare.

SOURCES (and links within)

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