Theresa May

Playing Tax Collector for the Welfare State Didn't Win British Tories Voters

The party is in trouble because of Prime Minister Theresa May's dementia tax

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Plenty of people love government welfare when it seems like someone else will pay for their benefits. The problem with that, as Margaret Thatcher famously

Theresa May
Prime Minister's Office via Foter.com

pointed out, is that eventually you run out of other people's money. And when that happens, the state goes after your money – because a government that is powerful enough to give you everything you want is also powerful enough to take away everything you've got.

That logic is now playing out in England where, Thatcher's own Tory Party, having abandoned its commitment to rolling back the welfare state, tried to double down on taking away "your" money when Prime Minister Theresa May recently proposed what has been widely pilloried as a "dementia tax" to pay for the long-term care of the elderly. Her call became so unpopular that her party, which was many points ahead a few weeks ago before she called for the tax, is poised to lose seats today in the snap elections that May called. And May herself has lost her 20-point edge and is locked in a dead heat with the Labor Party leader, Jeremy Corbyn, an unreformed Marxist who thinks money grows on trees.

Consider this background about Britian's long-term care system that the Brits call "social care":

As things stand, anyone who gets terminal cancer or heart disease can get long-term free care through the National Health Service — Britain's chronically underfunded government-run universal health-care system — because they can stay in the hospital. However, the NHS bolts when it comes to chronic mental conditions that don't require hospitalization. To get help for those, the elderly have to turn to their local councils (municipal governments). However, these councils depend on London's central government for funding, and that body has been cutting back (partially to offset NHS's ever-ballooning costs). So they refuse to pay for in-home care of the old and senile if these seniors have anything over $30,000 in savings, not counting their homes.

This leaves many older Britons, some dealing with serious conditions such as Alzheimer's, in the lurch, a problem that will only get worse as Britain's population ages. (In the next 16 years, the country's 65-plus senior population is expected to grow by 40 percent.) May's Tory predecessor, David Cameron, had pledged to cap the lifelong out-of-pocket long-term care costs of such elderly at around $93,000 by 2020.

But it's fiscally unsustainable for the government to pick up the remaining tab. So May initially proposed to scrap that cap – only to beat a quick retreat after a maelstrom of protest that threatened to plunge her party into crisis. But she didn't withdraw the other part of her proposal, which is why she is in trouble today. She told seniors that they'd be allowed to keep up to $128,000 of their savings before state assistance kicks in — up from $30,000. The catch is that their home values would be counted in those savings.

May assured seniors that she won't make them sell their homes to pay for their care so long as they were living in them. Instead, her plan was to recover the state's costs from the sale of their house after they (and their spouse) died.

At first blush, this may not seem like a bad deal: The elderly get to keep more of their savings and live in their homes while taxpayers ultimately get paid back. But if the elderly are going to have to pay for their care anyway, what is the point of government welfare in the first place? Isn't a safety net supposed to protect you from catastrophic events that wipe you out financially?

Conservatives have long lampooned liberal plans to impose "death taxes" on the estates of rich people. Yet here they are proposing "dementia taxes" on practically every homeowner. And conservative "dementia taxes" may arguably require even more intrusive government than liberal "death taxes."

For starters, the elderly who turn to the state for their care (and pretty much everyone but the wealthiest will have to because as the government expands its role in the long-term care sector, England's already small private insurance market will inevitably shrink more) could well lose say in how their property is disposed after their death. Their children could supposedly try and scrape up enough funds to pay off the government, but how many will be able to do so?

Furthermore, what the government is owed will be determined … by the government itself. If it offers inflated estimates of how much long-term care costs, who's to stop it?

It is hardly a stretch to suggest that over time the government won't confine its recovery efforts to what it has paid in any individual's case. Once the notion that it is okay for the government to go after private homes to pay for its services becomes acceptable, what's to prevent it from arguing that the relatively better off and healthier should be required to cough up some of their home equity for the less wealthy and sicker? Is it so unfathomable that liberals will make this argument in the name of equality and Tories in the name of fiscal responsibility?

England's welfare state has grown to a point where it is no longer possible to obfuscate the basic existential dilemma that it poses, namely, that there is no such thing as "free" universal coverage for anything: Either individuals take charge and make provisions for their own care, and maintain control over their funds — or hand them over to the government, and lose control. The first requires rolling back the welfare state, the latter expanding the tax collection state.

There is no third way, at least not one that is sustainable over the long run. It's a pity that after Thatcher there is no party — or political figure — left in England to point out the inevitable.

A version of this column originally appeared in The Week

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  1. England’s welfare state is running out of other people’s money

    How are Scotland and Wales and Northern Ireland doing?

    1. Fookin wot, m8?

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    2. British Navy to retake Hong Kong / Singapore to keep the welfare checks coming…

      1. No, no, a tax on tea would be more profitable.

        1. Last time England taxed tea there was a revolution. Tax my soda and you will get a strongly worded letter. Tax my tea and I will dress up like a native American, and proceed to tar and feather your a$$ after shooting you in the Mother Fisking FACE!

    3. The real problem is that after the recent deluge of terror attacks, instead of annnouncing a crackdown on Muslims, she talked about stronger internet regulations. WTF? I think the Brits are tired of sitting back and taking it.

    1. Meaning, we all have to become horse breeders, and raise lots of fillies, who will take care of us, in our old age?!?!

      Now THAT is some good old fashioned horse sense, if you ask me!!!

      1. I just threw up in my mouth a little.

    2. Quietus is the answer. Why should I be on the hook if my parents blew all their money?

      And keeping people with dementia alive is a special kind of hell. I’ll blow my head off before I’m a shambling zombie for my child to deal with.

      1. Quietus is the answer. Why should I be on the hook if my parents blew all their money?

        Why should I be on the hook if your parents blew all their money?

        A lot of the money your parents “blew”, they “blew” on you. Hence, if they are falling short in old age, it’s reasonable to assign responsibility for them to you.

        And keeping people with dementia alive is a special kind of hell.

        And, lucky you, when you get assigned legal guardianship for your parents along with financial responsibility, you get to make the decision of when to end treatment.

      2. Quietus is the answer. Why should I be on the hook if my parents blew all their money?

        Why should I be on the hook if your parents blew all their money?

        A lot of the money your parents “blew”, they “blew” on you. Hence, if they are falling short in old age, it’s reasonable to assign responsibility for them to you.

        And keeping people with dementia alive is a special kind of hell.

        And, lucky you, when you get assigned legal guardianship for your parents along with financial responsibility, you get to make the decision of when to end treatment.

  2. No there is a third way, tax the young and working more. I follow an english person (for fandom not political reasons), and they are begging their young followers to vote. Everyone in that party is begging the young to vote, but the young have better things to do. I can’t see politicians taking that as anything but a reason to tax the non-voting young to death to support the voting elderly. They can even add tax credits for when you actually have a kid so they can make the tax transition ride along with the point people general change their voting patterns.

    1. tax the non-voting young to death to support the voting elderly.

      This sounds familiar…

      1. When I am one of only a few millennials who voted in a recent run-off election for my city’s mayor, I live in San Antonio, Texas by the way, methinks taxing the non-voters to pay for the voters might be something that I’d expect to happen.

  3. But single payer government funded health care is the only sensible approach to health care. Don’t they understand that? If it feels good, and they WANT it to work, how can it fail??

    1. how can it fail??

      The problem is that they haven’t taken in enough refugees and immigrants. – Reason Magazine

      1. Z
        I
        N
        G
        !

      2. Well ponzi schemes are sustainable as long as you maintain exponential growth. There’s no reason to expect that can’t be done, is there?

  4. Theresa May’s dementia tax is shaping up to be costly for Tories

    Is there anything the limey fuck-heads won’t tax?

    1. If you try to walk, I’ll tax your feet.
      ’cause I’m the tax man!

    2. Churches.

  5. Strange policy choice for an elderly barren cat lady.

    1. You just described 47% of English women over 40.

      1. Hence, great potential for revenue.

  6. The “dementia tax” would have made people support themselves using their own money, not really an unlibertarian notion. Nick Gillespie frequently argues that rich old geezers should pay their own way instead of sponging off the young folks. What Theresa ran into was the middle-class notion that middle-class folks have the “right” to leave a sizeable inheritance (usually, in the form of real estate) to their heirs, and that the “state” should subsidize them in their old age so they don’t have to “waste” their own money supporting themselves, a notion that Shikha largely endorses. Sad!

    1. That’s… not how taxes work, Anal Van-man. Are you one of those people who expects to get “your” Social Security money back one day?

      1. The “dementia tax” isn’t an actual tax. It’s just a law that people with more than a certain level of wealth aren’t eligible for poverty relief even if they have little or no-income. That is, that they have to actually be poor, not wealthy retirees.

    2. I think this is a important part of the article.

      “Furthermore, what the government is owed will be determined ? by the government itself. If it offers inflated estimates of how much long-term care costs, who’s to stop it?”

      This would start as just being what it cost to actually take care of the elderly and quickly spiral into far fetched estimates that always require the government to take the entire value of the property, and once implemented, how long do you think it will be until this payback is extended to other things? The camel would have its nose in the tent. An argument could be made that no matter the value of the house and if you’ve ever even taken assistance from the government that everyone in the country owes a debt to the government that should be repaid with home values after death. I mean you use ROADZ don’t you? And all those people you hire or work for they’re being subsidized by the government, so that practically the same as subsidizing you directly.

    3. Yes, that’s basically accurate, this is about whether government benefits should be means tested or uniform, and whether “means’ should include wealth or just income. I would note that it does turn a bit of the “death tax” rhetoric around with similar notions of fairness. With the estate tax, a reasonable point made is that, comparing two people with similar parents, the one whose parents die early get taxed more, which seems inequitable. With this policy, people feel annoyed that they’d be able to pass on more to their heirs if they died earlier. There are arguments against, of course, but that’s where people are coming from.

      Also, the polls are showing a massive age gap, with the elderly voting in favor of the Tories at rates not generally seen in other elections (which were more class based). If that’s the case with the policy, and the policy is really driving votes, I can only imagine the difference without the policy.

      1. “Yes, that’s basically accurate, this is about whether government benefits should be means tested or uniform, and whether “means’ should include wealth or just income.” – John Thacker

        Depends on where you live. In America income is taxed. In Sweden you are taxed on income plus wealth which is why some in the socialist heaven of Sweden are taxed more than 100% of their income.

    4. First, Nick did not write this article. Second, it’s not at all clear that Shikha is on the side of angry old farts.

      We have the same attitude here, it’s not limited to Jolly Old England. Try mentioning “means testing” within the earshot of a US retiree and expect your head to be torn off in anger. Old retired millionaires still get their social security checks and most people consider that to be grand and glorious.

      1. Except that Social Security is somewhat means tested, even if the method used is borderline retarded.

        1. It’s not retarded at all. The current system is effectively means tested based on lifetime earnings (since you get back much less of you contributions if you made lots of money).

          Means testing based on wealth or earnings in retirement, on the other hand, is unfair and subsidizes bad economic choices.

          1. Yes, but it is partially offset by Medicare premiums based on income to the point the premium rates approach the costs for so called Cadillac plans. Not complaining just pointing out that Medicare premiums are already means tested.

      2. If means testing were based on lifetime earnings, then there might (might) be a case for it. Otherwise it’s just another form of moral hazard which rewards grasshoppers and punishes ants. Basically, if you were dumb enough to defer gratification and save your money, then you deserve to pay for the spendthrift whi didn’t.

      3. Old retired millionaires still get their social security checks

        Old retired millionaires get a big negative return on their payments into Social Security. That’s already plenty of “means testing”, based effectively on lifetime earnings. Adding additional means testing to Social Security would punish people for saving for their own retirement, which is why it is a lousy idea.

        As for “millionaires”, if you want to keep up your lifestyle, your retirement savings need to be about 10-15x of your income at retirement. That means that probably the majority of Americans ought to be millionaires when they retire.

    5. The “dementia tax” would have made people support themselves using their own money, not really an unlibertarian notion.

      There’s another way to make people pay for their own support using their own money without taxing them… but I can’t remember what that’s called. I’ll comment back if I remember it.

    6. Basically, National Health (aka the government) would be sending you a bill. Generally, when the government send you a bill, it’s called a tax. But I could let that go since you don’t get the bill if you don’t consume the service.

      The problem is it is a sudden change to the insurance scheme. And it essentially says that the government insurance benefit is capped – unless you first perform a cashectomy. So the homeless junkie gets all the care possible for nothing whereas the pensioner first has to become homeless before he’s allowed the same level of care that the junkie gets.

      It is the same as a private insurance plan with this setup: The deductible is $500 a year if you make under 60K, and $5,000 a year if you make more than 60K. Anybody who can leave the plan leaves and the plan becomes insolvent. The only alternative is to force people into the plan, which the Supreme Court has called a tax.

      The essential truth is this: Some people simply are uninsurable. Pretending otherwise is to deny reality – also known as dementia. To propose a system where the indigent get more care than the wealthy is evil – also known as the welfare state.

      1. Basically, National Health (aka the government) would be sending you a bill. Generally, when the government send you a bill, it’s called a tax.

        Not necessarily. It could be a penalty, a user fee, or a simple business transaction.

        1. orrrrr and involuntary donation.

  7. Wow the UK National Health sounds terrible, Still a million times better than the US system. At least the sick are treated (yes after a wait for non-urgent maladies) instead of being bankrupted and left to die in the streets like in America.

    1. Go away, we’ve got plenty of hysterical numskulls in this comment section already.

    2. Dr Who left you behind? Because none of that happens in this version of earth.

      1. I’m not sure that isn’t satire.

    3. How much do you clowns pay for health insurance now? What is your deductible? How much do you pay to see a doctor? – Your system is the most expensive in the world and who benefits?

      1. How much do you clowns pay for health insurance now?

        Three times as much as I did before Obamacare. Thanks, Obama.

      2. Given that the horribly dysfunctional and expensive American system funds most of the world’s pharmaceutical research, users of the NHS benefit from it, for one example.

        The American health care system – to the extent that it is a system – is awful and shitty. The British NHS, and all other single-payer systems, are shitty in different ways and for different reasons. You propose replacing one pile of shit with another. How about getting rid of the shit?

        1. Not just pharmaceutical research, but most medical research in general. Sure, there’s research going on in other countries, but just like the military, the US is head and shoulders above the rest of the world combined.

      3. New Cassandra|6.8.17 @ 10:54AM|#
        “How much do you clowns pay for health insurance now?”

        Fuck off, slaver. We’ve heard all the lies many times before.

      4. How much do you clowns pay for health insurance now?

        About a third as much as I paid in Europe. And I get better service for that. Under the US system, I have a choice. “You clowns” vote to be forced to pay for a lousy system no matter what, while your wealthy elites go off to get treated in nice private facilities around the globe.

        Your system is the most expensive in the world and who benefits?

        It is! You know what the most expensive part of the system is? Medicare. Yup, the government-run plan. And the more people we put into that, the more inefficient and costly the US system becomes.

    4. Considering I live in the 7th largest city in this country, and have yet to drive around and see those who have been bankrupted and left to die in the streets , I would have to rate your claim as horseshit.

      1. They don’t actually leave them in the street to die, the Koch brothers pay people to shove them down the stairs and kill them. Then they harvest their organs. I hear human horn fetches a good price on Omicron Persei 8.

        1. It’s all to protect you from “The Terrible Secret of Space”

    5. Yes, the u.s. system sucks. It sucks because EVEN BEFORE OBAMA CARE, half of all healthcare dollars were being spent by the government. Now it’s worse.

    6. instead of being bankrupted and left to die in the streets like in America.

      lol

    7. New Cassandra|6.8.17 @ 10:34AM|#
      “Wow the UK National Health sounds terrible, Still a million times better than the US system.”

      Do numbskulls like this show up presuming we haven’t looked at the data and hope that we’ll accept their lies?
      Or are they just so fucking stupid they post this crap regardless?

    8. Who defines what is non-urgent?

      It would be a real pain in the ass to lug around a bum knee for months, for example. It could cost many people their job. But, correct me if I’m wrong, many countries with socialized healthcare define knee surgery as “elective” and therefore non-urgent

    9. “Interpretation: Patients in the BC Southern Interior experience considerable delays in accessing lung cancer care. During this time, the disease has the potential to significantly progress and it is possible that a subset of patients may lose their opportunity for curative intent treatment” ( Muacevic & Adler 2015).

      Socialized medicine wait times doesn’t only effect as New Cassandra calles “Non-urgent maladies”.

      Reference:

      Muacevic A. & Adler J.R. (7 September 2015). Wait Times Experienced by Lung Cancer Patients in the BC Southern Interior to Obtain Oncologic Care: Exploration of the Intervals from First Abnormal Imaging to Oncologic Treatment. US National Library of Medicine National Institutes of Health . Retrieved on 10 June 2017 from https://www.ncbi.nlm.nih.gov /pmc/articles/ PMC4627838/

  8. Teresa May is selling a reverse mortgage that confirms that there are no property rights in a welfare state.

    1. and those opposing that are homeowners who want to find a different way for themselves to suck at the public teat.

      It ain’t the pols who are the problem here.

  9. Good article. I wasn’t aware the Corbyn has a shot at PM – that is truly frightening & could be the final nail in the coffin for that sad place.

    1. He doesn’t.

      They’re trying to do the Hillary thing again

    2. He’s literally a commie. All the tories have to do is not be complete fuckups and they win. Instead, it’s “hold my beer and watch us censor the Internet”.

      1. “TAX my beer and watch us censor the Internet”.

        FIFY

  10. It’s what happens when you have universal cradle to grave welfare. People demanding their welfare from the government but refusing to liquidate any of their own private assets to provide for themselves. And why should they? The government pays for all!

    1. I’m sure someone has said this before, but I’ve yet to see it: the baby boomers have rigged the system to ensure they get a trillion dollars of inheritance from their parents. I.e taxpayers are paying for their parents healthcare.

  11. What’s wrong with a dementia tax? Haven’t we free marketeers always said that if you want less of something, tax it?

  12. Isn’t it the case in England that home-ownership is relegated to the upper classes and everybody else lives in council housing? If you own your own home, you’re rich and what’s wrong with expecting people to sell assets in order to pay their expenses? If you see a panhandler wearing a Rolex, aren’t you going to question why he doesn’t sell the Rolex if he’s desperate for cash? I suspect a lot of this is kids thinking of their parents assets as their inheritance rather than their parents capital. If Mom has to sell her home to pay for her assisted-care retirement home, it’s tough shit for you, Junior.

    1. Well, yes, but only if you accept the idea that the government should be providing this sort of care. The Reason magazine position (and I think the position of most American lower-case “l” libertarians) would be that the government should not be providing such care in the first place, so therefore you should also oppose adopting a funding mechanism to pay for it. The market-oriented policy would be to abolish this form of government care and instead you sell your house yourself to pay a private company to provide you with the care.

    2. ‘Homeownership’ rate is the same in UK and US – 64%. With EXACTLY the same dynamics – those folks propped up by negative real interest rates, screwing everyone poorer/younger to keep their asset prices high, with both the homeownership rate and net equity falling over time and serfdom gets reintroduced by an overly large financial sector.

  13. Seems like a lot of words to just say, “Once again, Socialism doesn’t work.”

  14. The problem with May’s plan is that it is only slightly less batshit insane as the plans of the other parties.

    1. You’re my new best friend.

  15. Looks like the Brits are finally beginning to grok that offering to rob someone at gunpoint–and expecting them to thank you for it–is an incontrovertible symptom of dementia. There is a UK Libertarian party, so any thinking person at least has the choice of repeal-by-spoiler-vote. But just as in Weimar Germany, there are over a dozen communo-fascist looter parties. Subjects must make up their minds and choose between rights and a Reich.

  16. May would not come close to being a RINO here. Creeping communism may have permanently sunk the British Isle.

  17. With the cost of housing I would say to not buy a house since chances are you are going to lose it and save money under your mattress or give money yearly to your kids now instead of when you die. What is the point of saving anything more than allowed or buying a house that would automatically put you over the limit. JUST SPEND IT.

  18. I failed to mention that the suicide rate may increase so people can leave their possessions to their families.

  19. May is less than incompetent. She stood against the Brexit and gave an awful impression at her speeches the last two weeks. It is precisely how she would behave (such snobbery) if she were planing to lose to the commie labor party in the first place so that her owners (the elites) would get a redo on Brexit.

  20. Well looks like the Tories lost because the young actually voted in 2017. And their support for Labour (44% lead) almost certainly has nothing to do with support for Labourite socialism/unionism or piddly opposition to a Tory dementia tax. Looks to me like it is a straight out populist revolt – opposition to everything the Tory establishment has been doing, everything the Blairite establishment has been doing, all the UKIP racist dogwhistling, all the cynical SNP manipulation of ‘referenda’.

    And though I have no idea how that sort of age-based revolt will ultimately play out – that at least is the first electoral revolt where the anger is entirely legitimate. The young have been completely screwed – in Britain, in the US, in Europe, in Asia – for decades. And the old pretty much everywhere deserve to swing from trees and lampposts for what they have been doing to the next generation.

    1. I agree the kids have gotten the shaft. Although at least in the US the young are fairly coopted by the duopoly. Granted, they (kids) are getting better on drug legalization. But there is widespread support among the young for Medicare. Im more sympathetic for a youngster who refrains from voting in protest or out of a belief in disenfranchisement than I do for a kid who votes for Team Red or Team Blue.

      1. I agree. But if Sanders had won the nomination (or Rand Paul on the other side), I would’ve prob given the yoots a pass for that sort of ‘strategic’ vote.

  21. This move could ultimately destroy Britain. As time goes on the state would continue to acquire a larger and larger share of residential property as ppl inevitably die. Government management of both property equity & healthcare could result in direct state control over a majority of the economy. 2008 showed us how effective state run equity funds like Fannie Mae are.

    1. How would this destroy Britain? The dead don’t need much in the way of residential property. And surprise surprise the living will always be interested in working hard to homestead/buy land that is now going to be available to them.

      Thomas Jefferson understood this – http://press-pubs.uchicago.edu…..h2s23.html

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