Relevant and even prescient commentary on news, politics and the economy.

Will You Be Eligible for A Government Subsidy When You Buy Health Insurance in 2014? Check out Your “Modified Adjusted Gross Income” (MAGI) –You May Be Pleasantly Surprised

Maggie Mahar comments on the Modified Adjusted Gross Income and how this may positively impact your eligibility for healthcare insurance on the state exchanges.

Before writing this post, I had no idea how to calculate my “Modified Adjusted Gross Income” (MAGI). But I did know that this is the number the IRS will use when deciding whether people purchasing their own insurance in their state’s online marketplace (a.k.a. Exchange) will qualify for a tax credit to help them cover their premiums.

This piqued my interest.

The first thing you need to know is that your modified adjusted gross income (MAGI) may well be lower than your gross income.

When calculating your MAGI, you can subtract certain items from your adjusted gross income including: student loan interest, certain moving expenses, contributions to an IRA, some self-employment expenses, and any alimony that you pay.

As a result, an individual grossing $50,000 (or a family of four with income of $98,000) might well discover that after they deduct these items from, their MAGI falls under the cut-off for subsidies ($45,960 for an individual, $62,040 for a couple, $78,120, for a family of three, $94, 200 for a family of four)

This is why, even if think you earn a few thousand too much to qualify for government help, you should ask whoever prepares your taxes about your MAGI—and perhaps think about upping your contribution to an IRA.

Kiplinger’s Kimberly Lankford, suggests other ways to lower your MAGI by “selling losing stocks or boosting business expenses to offset self-employment income.” But, she warns, “Be careful with moves that could boost that your MAGI and make it more difficult to qualify for the subsidy — such as converting a traditional IRA to a Roth.” .

Clearly MAGI is a tricky number. For more detail see this -page definition from UC Berkeley’s Labor Center. It is far and away the best, and clearest description of how to calculate MAGI that I have found.

Cross Posted from The Health Beat Blog, Maggie Mahar, Will You Be Eligible for a Government Subsidy .  .  .

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“The Rest of The Story”

Somewhere along the way, the naysayers and the Repubs will find a way to turn this into a negative “Trader Joe’s Cut Health Benefits Last Week”  Last week Ezra Klein wrote about Trader Joe’s decision to cut health insurance benefits for employees who work fewer than 30 hours a week. After that, one reader forwarded a Trader Joe’s response to his letter inquiring about the change in benefits.

“Thank you for writing to us. It’s possible you have been misled, at least to some degree, by the headlines in some articles regarding our reasons for implementing the [Affordable Care Act] in January. We’d like to take this opportunity to clarify some facts.

For over 77% of our Crew Members there is absolutely no change to their healthcare coverage provided by Trader Joe’s.

The ACA brings a new potential player into the arena for the acquisition of health care. Stated quite simply, the law is centered on providing low cost options to people who do not make a lot of money. Somewhat by definition, the law provides those people a pretty good deal for insurance … a deal that can’t be matched by us — or any company. However, an individual employee (we call them Crew Member) is only able to receive the tax credit from the exchanges under the act if we do not offer them insurance under our company plan.

Perhaps an example will help. A Crew Member called in the other day and was quite unhappy that she was being dropped from our coverage unless she worked more hours. She is a single mom with one child who makes $18 per hour and works about 25 hours per week. We ran the numbers for her. She currently pays $166.50 per month for her coverage with Trader Joe’s. Because of the tax credits under the ACA she can go to an exchange and purchase insurance that is almost identical to our plan for $69.59 per month. Accordingly, by going to the exchange she will save $1,175 each year … and that is before counting the $500 we will give her in January.

While we understand her fear of change, at her income level this is a big benefit that we will help her achieve.

Clearly, there are others who will go to the exchanges and will be required to pay more. That is usually because they have other income and typically a spouse who had a job with no benefits and they do not qualify for the subsidies under the ACA.

One example of that we had yesterday was the male Crew Member who worked an average of 20 hours per week but had a spouse who is a contract consultant who makes more than $200,000 per year. The Crew Member worked for the medical benefits and unfortunately for them they are likely to have to pay more because of their real income. We understand how important healthcare coverage is to our Crew Members and we are pleased to be able to provide and support this program.

We do hope this information helps, and we appreciate your interest in Trader Joe’s.”

It is rare to see a company which actually thinks beyond the profit margin. Maybe I will be proven wrong on this; but, it looks like TJ may have done the right thing. For those employees who may have other income, TJ provided an $500 to compensate for differences. Hat Tip to Hullabaloo, Digby – Trader Joe Explains Itself (and Does It Well)

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Ohio Governor John Kasich to Follow Panera Bread CEO’s Lead in Taking the SNAP Challenge

In case you missed it, Panera Bread CEO Ron Shaich (founder) is taking the SNAP Challenge.

“in an effort to find out how the other half lives by limiting grocery purchases to the average benefit amount shelled out by the Supplemental Nutrition Assistance Program. It’s not much. A typical food stamp recipient receives just $4.50 per day in food aid, according to Feeding America.

The CEO and founder of Panera Bread,Ron Shaich has an income of over $4 million per year and can easily afford more than the supplemental $4.50 per day SNAP allots for food expenditures to single people.  Shaich’s effort is to increase the awareness of hunger in the US. His efforts come as Congressional Republicans and state governors such as John  Kasich of Ohio attempt to cut back on the Food Stamp program by forcing able-bodied-people to work even when no paying jobs exist. I am not going to say Ron Shaich has never gotten his hands dirty; but, I will pass on some of his comments on cutting back on his meals.

“Over the last few days, my thoughts have been consumed by food. When is my next meal? How much food is left in my cabinet? Will it get me through the week? What should I spend my remaining few dollars on? What would I eat if I had no budget at all?” he writes.

On top of the anxiety about food is actual hunger. Shaich notes that he opted to spend his budget on cereal and pasta, which has left him “feeling bloated . . . yet not really full.”

the feelings of anxiety and hunger led to another sensation: “an underlying sense of resentment.” For him, it was sparked by driving past restaurants he usually frequents. For a colleague trying the same challenge, resentment was triggered by “the price difference between branded and off-brand foods.”

One in seven people rely on the SNAP (Supplemental Nutrition Assistance Program) program to supplement their food expenditures. 75% of all people on SNAP spend more on food than what SNAP allots to them under its guidelines. Ron Shaich goes on to note;

“Hunger is not synonymous with unemployed or homeless,” he writes. “The inability to put food on the table is not equivalent to lazy.”

And what about Ohio Governor John Kasich taking up the SNAP Challenge with Panera Bread CEO Ron Shaich? I was dreaming; although, that suit John wears is beginning to look a bit tight. Republican Governors are good at making demands on people with little political power. Rather than forcing 130,000 people to work in a state where ~15,000 jobs exist according to the Ohio Jobs Office; maybe, Governor John Kasich should take up the SNAP challenge and see how some of his constituents are living. Or maybe Governor Kasich will accept a challenge from one of his constituents to do an honest day’s work and live off SNAP for food? Doubtful  .  .  .

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However, we did try it.

by Robert Waldmann

“If non-bureaucratic mechanisms like markets or decentralized experimentation could achieve the same or better results at less cost and without the political taint of Big Government, why not try it?* “ Might have been an interesting question in 1993, although it starts with an “If” clause which assumes the new Democrats are right.

However, we did try it. I think the evidence is that in huge swathes of the economy bureaucratic mechanisms are much more efficient than non-bureacratic mechanisms. One, obviously, is health care where the spending is systematically higher in countries with a non-bureaucratic approach without better outcomes. “non-bureacratic mechanisms like markets” certainly includes Medicare advantage which achieved the same results at 14% higher cost.
I’d say that outsourcing intelligence to Booz Allen Hamilton worked fine if you consider (as I do) the effort to be mainly a threat to our liberties, so complete failure is better than operational success.

I don’t think outsourcing defence of diplomats to Blackwater worked that well. Also Benghazi.

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Objective reality and intra-Dem debate

by Robert Waldmann

On Ed Kilgore’s thoughts on Peter Beinart.

He wrote:

he mentions both the Washington Monthly and the New Republic (which he used to edit) as onetime journalistic bulwarks of the soon-to-be discarded Clintonism (and Obamism) that have now “moved left,” I would point out to him the not-exactly-distant-past March/April issue of WaMo devoted to praise of Obama as great president who continued Clinton’s legacy. My own basic view is that Clinton and Obama and virtually all center-left folk have “moved left” in response to conservative counter-revolutionary activity, the disastrous consequences of the Bush Era, and other manifestations of objective reality. As my resolutely New Demish friend Will Marshall observed nearly a decade ago, “we’re all populists now” thanks to W., who’s now being denounced as a RINO piker by most of his GOP successors.

I comment:

“other manifestations of objective reality” … heh indeed.   I think that in the intra-Democratic party debate, reality has a clear liberal bias.   Let’s pretend that there is no Republican party (it’s real fun to do that).  There would still be new information relevant to the debate between the past eventheliberal Peter Beinart and the current actually liberal Peter Beinart (I should admit that I haven’t read the recent Beinart article).

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Economic growth and perspectives…links

What does economic growth mean for Americans by Uwe E. Reihnhart

Suppose we placed a carefully selected sample of men on a hot stove and another sample of men on dry ice. Could we reasonably conclude that, on average, they were comfortable?

As a nation we worship a deity called economic growth…

The rich get richer through the recovery by Anne Lowry

Why labors share of income is falling  by Jared Bernstein

In a recent post about fast-food workers striking for a higher wage, I noted the juxtaposition of the strikers and the banks, which just reported another quarter of record profits. In fact, as many inequality watchers have noticed, profits as a share of income are at or near record highs while the compensation share is around a 50-year low.

Labors falling share everywhere  by Conversable Economist

A Decade of Flat Wages, Economic Policy Institute by Lawrence Mishel and Heidi Shierholz

new paper from the Economic Policy Institute provides both diagnosis and prescription of what is arguably the fundamental problem of the United States economy in recent years: wage stagnation.

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“able-bodied adults to work for food stamps”

“Gov. John Kasich’s administration will limit food stamps for more than 130,000 adults in all but a few economically depressed areas starting Jan. 1.

To qualify for benefits, able-bodied adults without children will be required to spend at least 20 hours a week working, training for a job, volunteering or performing a similar type of activity unless they live in one of 16 counties exempt because of high unemployment. The requirements begin next month; however, those failing to meet them would not lose benefits until Jan. 1.

‘It’s important that we provide more than just a monetary benefit, that we provide job training, an additional level of support that helps put (food-stamp recipients) on a path toward a career and out of poverty,’ said Ben Johnson, spokesman for the Ohio Department of Job and Family Services.

For years, Ohio has taken advantage of a federal waiver exempting food-stamps recipients from the work requirements that Kasich championed while U.S. House Budget Committee chairman during the mid-1990s. Kasich and former Rep. Bob Ney, R-Heath, co-sponsored an amendment requiring able-bodied recipients without dependents to work that was included in sweeping welfare-reform legislation adopted in 1996.

‘The governor believes in a work requirement,’ Kasich spokesman Rob Nichols said yesterday. ‘But when the economy is bad and people are hurting, the waiver can be helpful. Now, fortunately, Ohio’s economy is improving.’”

This comes from a Governor who looks like he could use a little physical work himself.

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Fodder For a Great Blog Post

 

I received the following email from Dan Crawford last evening:

Fwd: Blog Post Idea: SCOTUS Must Protect Free Speech in Ohio and Beyond

Is this interesting?

———- Forwarded message ———-
From: Kristen Thomaselli <kristen@keybridge.biz>
Date: Wed, Sep 11, 2013 at 6:25 PM
Subject: Blog Post Idea: SCOTUS Must Protect Free Speech in Ohio and Beyond
To: angrybearblog@gmail.com

Daniel,

I wanted to share an oped from this weekend’s Wall Street Journal that I thought you might find interesting (http://online.wsj.com/article/SB10001424127887324009304579040671355619380.html and pasted below).

It’s by Brad Smith, a former chairman of the Federal Election Commission, and it focuses on one man’s fight in Ohio to exercise his First Amendment right to speak freely about political issues in his community. In his piece, Brad calls on the Supreme Court to accept this important case, as it could have huge ramifications for Americans’ First Amendement rights — and states’ efforts to deprive them of those rights.

Few people know more about these issues than Brad, so his piece is quite instructive — and could provide fodder for a great blog post.

Please let me know if you have any questions — or if you end up writing about Brad’s        piece!

All the Best,

Kristen Thomaselli
(202) 471-4228 ext. 101

Bradley Smith: The Supreme Court and Ed Corsi’s Life of Political Crime
How one Ohio man’s blog on politics got him in trouble with campaign-finance law.

By Bradley A. Smith

In the winter of 2008, Ed Corsi decided that he was tired of stewing about the politics in his home of Geauga County, Ohio, and the country at large. He started a website, put Thomas Jefferson’s quote, “The price of freedom . . . constant vigilance” at the top, dubbed the site “Geauga Constitutional Council,” and set about blogging his thoughts on local and national politics. So began his life of political crime.

Over the next two years, Mr. Corsi and a few friends would sometimes gather to talk politics. He occasionally sponsored meetings featuring speakers (not political candidates) on public policy issues (not elections), and charged a nominal fee for seating to offset his costs. He and two friends passed out political pamphlets they made at the Geauga County Fair.

Mr. Corsi spent $40 a month to maintain his website, and perhaps a couple hundred dollars a year in other expenses. According to the state of Ohio, however, these activities are illegal under campaign-finance laws because Mr. Corsi did not first register with the state, report to the state on his activities, and subject himself to the regulations governing the operation of a state political action committee.

When he was summoned to a hearing before the Ohio Elections Commission in April 2011, Mr. Corsi asked, “Do I have to hire a lawyer to [do] these things?” Commission Chairman Bryan Felmet replied, “Yeah, I guess so. I think that it’s very complicated without going to those lengths.” The commission ordered Mr. Corsi to register and report his activities to the state.

When the Supreme Court reconvenes in October, the big campaign-finance case will be McCutcheon v. Federal Election Commission, which nervous censors have dubbed “the next Citizens United.” McCutcheon deals with the ability of affluent Americans to contribute to political parties and candidates. Never mind that the candidates and causes these people support represent the views of millions of citizens. “Reformers” argue, and many Americans seem to agree, that “big money” in politics must be regulated.

It is inconceivable, however, that America’s founders thought the First Amendment would allow the government to routinely require citizens to report their political activity, and be subjected to such complex regulations. They wanted to prevent government from doing precisely this sort of thing. Yet Mr. Corsi lost in state court. Now he waits to see if the Supreme Court will agree to hear his case.

The “big money” in politics can afford the accountants, consultants and lawyers needed to cope with campaign- finance law. The burdens frequently fall more heavily on grass-roots politics-the very thing we ought to be encouraging. There also is abundant anecdotal evidence that the main result, if not the purpose, of campaign-finance laws is to allow political insiders and government officials to harass grass-roots activists. The IRS targeting scandals are merely the most prominent example of the way these laws are used by those in power to harass their opposition.

On his blog, Mr. Corsi was critical of Ed Ryder, the chairman of the Geauga County Republican Party and a member of the county Board of Elections, and of various officials and candidates supported by Mr. Ryder. The initial complaint against Mr. Corsi was filed by Mr. Ryder, who admitted spending two months to find out who constituted the “Geauga Constitutional Council,” so he could file a complaint against Mr.Corsi.

In Buckley v. Valeo (1976), and again in Federal Election Commission v. Massachusetts Citizens for Life (1986), the Supreme Court held that the regulatory requirements of operating a political action committee could not be imposed on groups that lacked the primary purpose of supporting or defeating political candidates in elections. But across the country, states are flouting that command, imposing rigid requirements on ordinary citizens who are trying to express their political opinions.

In Colorado, for example, a group of friends calling themselves the Coalition for Secular Government operate a website on which they posted a long policy paper on abortion and church-state relations. The paper concluded by urging Coloradans to vote “no” on a ballot measure. For that, the state says they must register as a political committee and report their activities, income and expenses.

Most state statutes now simply ignore the Supreme Court and require that two or more citizens who spend even nominal amounts on politics to register and report to the government. Even printing yard signs or running an email list can trigger these requirements. In Ohio, a single dollar in expenditures will do, so be careful if you talk politics over a cup of coffee.

As a former commissioner at the Federal Election Commission, I have seen the effects these laws have on citizen participation and civic-mindedness. I have read the plaintive letters from citizens who could not afford a lawyer, and could not believe their government was fining them for political activity.

In the past, both liberals and conservatives on the Supreme Court were sensitive to this problem. Liberal Justice William Brennan wrote the majority opinion in the Massachusetts Citizens for Life case. But that sensitivity appears to be vanishing.

Forty-seven years ago, in Mills v. Alabama, the court struck down a lawprohibiting election-day newspaper editorials, noting, “there is practically universal agreement that a major purpose of [the First] Amendment was to protect the free discussion of governmental affairs.”

Is that still true? Will the court leave millions of Americans who want to engage in politics at risk of prosecution? Will it leave Mr. Corsihanging?

Mr. Smith, a former chairman of the Federal Election Commission, is a law professor and chairman of the Center for Competitive Politics, which is representing Mr. Corsi at the Supreme Court. 

Hmm.  Happy to oblige, Kristen.

Yes, this is very interesting.  Especially because Smith’s piece actually focuses on one man’s fight in Ohio to misconstrue Ohio campaign-finance law as impinging upon his right to speak freely about political issues in his community.  Or as having anything to do with his right to speak freely about political issues in his community.

Or maybe it’s really about one high-profile Washington, D.C. lawyer’s longstanding anti-regulatory, anti-campaign-finance laws crusade.  Bradley Smith, a former chairman of the FEC upon appointment by George W. Bush, is a longtime rightwing, anti-regulation crusader.

Which may be why he says in that piece that McCutcheon deals with the ability of affluent Americans to contribute to political parties and candidates, rather than that McCutcheon deals with the ability of affluent Americans to contribute as much as they wish to political parties and candidates.

Or maybe it’s just that factual accuracy is not his forte.  He did, after all, baldly misrepresent in the op-ed that the IRS targeted conservative political groups, but not liberal ones, for harassment, saying, “The IRS targeting scandals are merely the most prominent example of the way these laws are used by those in power to harass their opposition.” Since actually the IRS used its power to try to prevent misuse of exemption regulations by liberal as well as conservative groups, that statement is merely the most prominent falsity in Smith’s article.  But maybe the Ohio Elections Commission, unlike the IRS, would target only Republican social welfare groups. Hurray!  Apparently Ohio law doesn’t exempt  social welfare groups such as Mr. Corsi’s.

In any event, the issue in McCutcheon is whether it is unconstitutional for government to place any limits at all on campaign contributions directly to parties and candidates, not whether affluent Americans can be barred from contributing to parties and candidates within the same amount limitations as everyone else.

What is Smith’s forte, apparently, is the artful sleight of hand, the use of the non sequitur as sophism.  Which may be why he claims that because the candidates and causes that, say, the Koch brothers want to financially sponsor represent the views of millions of citizens, the Koch brothers should be allowed to pay for millions of dollars of TV ad buys in order to try to persuade millions of other people to vote for these candidates.

Why, of course, David Koch should serve as campaign proxy for the minimum-wage Walmart employees he wants to enlist in his cause of lowering the Kochs’ income tax and eventual estate tax obligations, of disassembling the social safety net, of keeping the minimum wage at $7.40 an hour, and of ensuring the continuation of Chamber of Commerce control of the entire federal and most state judicial systems!  The Kochs are altruists!  The Walmart employees can’t pay millions of dollars in campaign contributions for TV ads that will convince them to vote Republican, so the Kochs will do that for them!  (Tautologies are another Smith specialty, apparently.)

It may well be inconceivable, as Smith claims, that America’s founders thought the First Amendment would allow the government to routinely require citizens to report their political activity, and be subjected to such complex regulations.  But the government does not routinely require citizens to report their political activity; it requires them to report–or rather, requires those to whom they give monetary support in election campaigns–to report that funding, so that those whose votes are solicited as a result will know who, exactly, is soliciting their vote.

And as for those complex regulations, anyone who complains about that should try instead to navigate, say, the federal court system as a non-corporate and non-wealthy litigant.  It’s unlikely that America’s founders, or at least the Framers of the Reconstruction Amendments, thought the Constitution would allow the government to methodically turn the civil, criminal and habeas judicial processes in this country into bureaucratic regulatory labyrinths navigable only by rightwing crusaders, Chamber of Commerce members, others who can retain $1,000-per-hour “name” counsel, and state and local governments (dignity for states, except the ones that enact affirmative action programs!); no one else need apply.

Who knew that Rube Goldberg was a Federalist Society member?

And, while I do recognize that the Framers thought it fine that the right to vote be limited to the landed gentry and others who could afford to pay a steep poll tax, I’m not sure they actually had campaign contributions in mind when they drafted the First Amendment’s speech clause.  Nor do I recall learning in Civics class that George Washington, et al., thought corporations are people, my friend.  But maybe I was absent from school the day of that lesson. Or just didn’t attend Mitt Romney’s, Anthony Kennedy’s or Bradley Smith’s elementary school alma mater.

Unlike Mr. Smith, who, I guess, did.  Which is nice for the Fab Five members of the Supreme Court.  Mr. Smith, who went to Washington long ago, already has provided them the first draft of their opinion in the Corsi case.  Justice Scalia will join his four other fair-weather dignity-of-the-states-crusading colleagues in striking down the Ohio statute, just as the five of them summarily struck down a Montana one last year, before he returns, briefly, to indignant-umbrage posture at the very suggestion that courts should strike down duly enacted legislation. Briefly is a very safe bet; there is, after all, another Obamacare challenge heading toward the Supreme Court.  Not to mention the likelihood of another state-university-admissions affirmative-action case, surely soon.

I hope Ms. Thomaselli likes this blog post.  If not, I can beef it up a bit.  Trust me.

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“Record income inequality hits another new record”

I’m sure we’re all shocked that the rich are taking yet another record share of the national economic pie:

The gulf between the richest 1% of the USA and the rest of the country got to its widest level in history last year.

The top 1% of earners in the U.S. pulled in 19.3% of total household income in 2012, which is their biggest slice of total income in more than 100 years, according to a an analysis by economists at the University of California, Berkeley and the Paris School of Economics at Oxford University.

The richest Americans haven’t claimed this large of a slice of total wealth since 1927, when the group claimed 18.7%. The analysis is based on data from Internal Revenue Service data.

Is it any wonder that New Yorkers just voiced such strong support for a strident economic progressive like De Blasio? It appears the dam is beginning to burst at long last.

Hat Tip David Atkins at Hullabaloo

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