- Jun 6, 2007
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Overall, the Inflation Reduction Act is a great move by the Democrats because over time it will lower the inflation rate. The main culprit, the bulk of the problem for high inflation is the price of fossil fuels; America is still the same country we were fifty years ago back in the early 1970's when the OPEC crisis hurt America's economy bad, the price of oil and gas has tentacles that run throughout our economy when that price the price of things across the board go up. The price of gasoline has dropped about a dollar over the past two months but no one should be fooled by this price holiday the supply/demand curve still dictates price and America is still a readily foreseeable bad development away from crushing fossil fuel prices and who wants to bet that wealthy interest in the world who are always manipulating things will trigger that bad development before the November elections so the Democrats can take a real beating in the mid-terms. In any event the Inflation Reduction Act will help cut consumption of fossil fuels by America and increase supply so that the pricing dynamic in the fossil fuel commodity markets will drive prices lower and stop being a driver of inflation!
A couple of shortcomings in the bill that will hurt Democrats and are not in the best interest in America are the following. Giving Medicare the power to negotiate drug prices are good but the bill's critics are right the system in the bill to do this is price control or price regulation not negotiation; the system is drug company if you don't agree to our price you will then be subject to an excise tax that commences at 65% of your domestic sales for the drug and over times goes to 95% - this is a facade of negotiation actually is straight up coercion. I think that the bill would be better to go back to a modified version of an earlier version of Build Back Better bill where the negotiation framework involved the what other foreign countries pay for the drug developed and wealthy countries; make the system be that if the drug company doesn't accept the Medicare offer on price than the permissible price you drug company are permitted to sell your drug for is the average you sell it to these wealthy developed countries and this price last for two year than you drug company can raise it ten percent after another two years you can raise it twenty percent than after another two years you can raise it thirty percent for two years than the cycles starts over again. This way the drug company is still making a profit on the drug and Medicare is getting a lower price and it pressures both sides to be reasonable because the current system isn't giving stable pricing! Anyhow Democrats with the current bill's system the Republican advertisements are going to cost you a significant number of votes plus I don't think it will end up going through the plan doesn't start until 2026 plenty of time for the drug companies to twist arms to stop the implementation of the program, my prediction is this program goes the way of the tax on Cadillac health insurance programs of the Affordable Care Act, never gets implemented!
The Inflation Reduction Act's tax on corporations buying back stock is really stupid, it is Washington politicians not acting like stewards of a great capitalism economy but rather a bunch of politicians pandering to the masses instead of leading the masses. Corporations buying back stock leads to increases in stock price because such price is based on earnings per share which goes up when the number of outstanding stocks is reduced. Companies buying back stocks increases the value of peoples 401k their retirement accounts, this is vitally important to many Americans. And frankly a significant part of the way that America will fix the economic disparity in America which America must do if it is to survive is by improving the 401 k program and this move by Congress just weakens it. Plus hampering executives power to guide their stock price higher will lead to turnover of Executives as shareholders search for executives that will bring greater stock price increases, instability in America's executive suites isn't good for ordinary workers because they are often end up losing their jobs as new managers chart a different course for their business!
The Inflation Reduction Act's initiative to improve the country's tax code to have more carried interest as regular taxable income is fair and good and a shame it isn't going to be part of the bill. I would have liked to have seen the Democrat leadership negotiate with Senator Sinema who was the driver to kill these provisions to save the initiative. Were alternatives offered to Senator Sinema like how about if the bill grandfathered all the outstanding carried interests arrangement in existence today under the old system. Or why not offer to just have the five year clock (for how long the person has to hold it to get the lower capital gain rates) begin when the taxpayer's interests becomes vested as opposed to the bills standard of the later of the aforementioned date or "the date on which the investment fund (which the taxpayer worked for) acquired substantially all of its assets". This acquisition of assets date seems like a real mess to deal with for professionals that work in the industry.
Medicare's finances aren't great considering the number of Americans that are aging into that program, Congress should be trying to help the finances of the system as much as possible. To this end, wisdom calls for means testing these new benefits that the Inflation Reduction Act will provide. For the mandate that limits out of pocket costs for drugs to $2000.00 limit this to incomes of $175 K for individuals and $350K for married couples. For incomes higher have limits but raise the ceiling accordingly.
A couple of shortcomings in the bill that will hurt Democrats and are not in the best interest in America are the following. Giving Medicare the power to negotiate drug prices are good but the bill's critics are right the system in the bill to do this is price control or price regulation not negotiation; the system is drug company if you don't agree to our price you will then be subject to an excise tax that commences at 65% of your domestic sales for the drug and over times goes to 95% - this is a facade of negotiation actually is straight up coercion. I think that the bill would be better to go back to a modified version of an earlier version of Build Back Better bill where the negotiation framework involved the what other foreign countries pay for the drug developed and wealthy countries; make the system be that if the drug company doesn't accept the Medicare offer on price than the permissible price you drug company are permitted to sell your drug for is the average you sell it to these wealthy developed countries and this price last for two year than you drug company can raise it ten percent after another two years you can raise it twenty percent than after another two years you can raise it thirty percent for two years than the cycles starts over again. This way the drug company is still making a profit on the drug and Medicare is getting a lower price and it pressures both sides to be reasonable because the current system isn't giving stable pricing! Anyhow Democrats with the current bill's system the Republican advertisements are going to cost you a significant number of votes plus I don't think it will end up going through the plan doesn't start until 2026 plenty of time for the drug companies to twist arms to stop the implementation of the program, my prediction is this program goes the way of the tax on Cadillac health insurance programs of the Affordable Care Act, never gets implemented!
The Inflation Reduction Act's tax on corporations buying back stock is really stupid, it is Washington politicians not acting like stewards of a great capitalism economy but rather a bunch of politicians pandering to the masses instead of leading the masses. Corporations buying back stock leads to increases in stock price because such price is based on earnings per share which goes up when the number of outstanding stocks is reduced. Companies buying back stocks increases the value of peoples 401k their retirement accounts, this is vitally important to many Americans. And frankly a significant part of the way that America will fix the economic disparity in America which America must do if it is to survive is by improving the 401 k program and this move by Congress just weakens it. Plus hampering executives power to guide their stock price higher will lead to turnover of Executives as shareholders search for executives that will bring greater stock price increases, instability in America's executive suites isn't good for ordinary workers because they are often end up losing their jobs as new managers chart a different course for their business!
The Inflation Reduction Act's initiative to improve the country's tax code to have more carried interest as regular taxable income is fair and good and a shame it isn't going to be part of the bill. I would have liked to have seen the Democrat leadership negotiate with Senator Sinema who was the driver to kill these provisions to save the initiative. Were alternatives offered to Senator Sinema like how about if the bill grandfathered all the outstanding carried interests arrangement in existence today under the old system. Or why not offer to just have the five year clock (for how long the person has to hold it to get the lower capital gain rates) begin when the taxpayer's interests becomes vested as opposed to the bills standard of the later of the aforementioned date or "the date on which the investment fund (which the taxpayer worked for) acquired substantially all of its assets". This acquisition of assets date seems like a real mess to deal with for professionals that work in the industry.
Medicare's finances aren't great considering the number of Americans that are aging into that program, Congress should be trying to help the finances of the system as much as possible. To this end, wisdom calls for means testing these new benefits that the Inflation Reduction Act will provide. For the mandate that limits out of pocket costs for drugs to $2000.00 limit this to incomes of $175 K for individuals and $350K for married couples. For incomes higher have limits but raise the ceiling accordingly.
