While I’m digging through Rep. Goodwin’s ramblings, I am pleased to find that, in a way, Rep. Goodwin seems to support something like the estate tax.
Goodwin’s outburst of class envy comes in his April 8 discussion of his and the Legislature’s failure to fix the nursing home crisis:
…if the nursing home is a private business or run by a nonprofit, why are the tax payers on the hook in the first place? Also, how many residents through skillful maneuvering of their assets gave the estate to their heirs and now on paper have nothing? Now they fall into the Medicaid reimbursement category. The estate they willed to their heirs could be a multi-million dollar estate. However, the nursing home residents are now on the state’s dole.(?) My thoughts are that if someone is truly down and out and doesn’t have any assets or have used these assets up, then they should be eligible for state Medicaid programs. But for multi-millionaires to be on Medicaid?…it just feels wrong to me [Rep. Tim Goodwin (R-30/Rapid City), “The legislation session is over: we still have a lot of work to do!!” legislator blog, 2019.04.08].
Read that again: conservative Representative Tim Goodwin is saying that it’s not fair that multi-millionaires should be able to pass all of their wealth to their kids. Goodwin is saying that multimillionaires should burn that money up before they die.
I can only wish Rep. Goodwin could see one logical conclusion of his class envy here: if we maintained a robust estate tax, we could prevent exactly that kind of unfair wealth consolidation. We would capture wealth that could be put into Medicaid that would solve the nursing home crisis.
But there I go again, expecting Republicans to see the big picture and hold logically consistent positions.
Oh well: maybe Rep. Goodwin can come out with a plan to take Medicaid funding away from the big nursing homes in Sioux Falls with their phantom nurses and divert that money to rural nursing homes.
The wingnut remedy for multi millionaires on welfare is to give them more taxcuts until they are billionaires. Problem solved- no more multi millionaires on state Medicaid. No snark intended.
OMG, if all of you actually think multi-millionaires are able to swindle their assets away so they qualify for medicaid I have a bridge to sell you.
I look forward to a list of former millionaires that are now on the state’s dole and in long term care. Please provide.
Here ya go, SP- I know you’ll ask how I know and that information cannot be given but it is true.
Enjoy.
First, Rep. Goodwin misunderstands the nature of tax-exemption and nonprofit corporate status. Tax exemption has everything to do with who owns and controls the corporate assets and whether the corporation is being operated for what the IRS defines as a “public benefit purpose.” It has very little to do with profitability, salaries, and with whom the nonprofit does its business in pursuit of its public benefit purpose.
He also ignores the salient fact that nonprofits are often valued by government as a way to deliver services desired by the public on a contractual basis – without government’s need to hire staff, construct and maintain buildings, purchase and replace equipment and supplies, etc.
Second, the statements ignore the trend toward “aging in place,” where people receive the services they need without entering a “nursing home.” At-home services, independent living, assisted living, and other options can precede or supplant many peoples’ need for a skilled nursing facility.
Sheltering or transferring a large estate to avoid using funds to pay for nursing home care may happen, but it’s rare. In addition, states have options to recapture Medicaid expenditures from such estates, especially when the transfers or sheltering occurs less than three years before Medicaid-paid services are accessed.
Steve, there are many millionaires in south dakota using irrevocable trusts to hold millions of dollars in assets so those assets aren’t counted in determining eligibility for state aid. Nobody will give you a list because it’s not public record so it’s none of your business.
Michael, legally sheltering or transferring funds to avoid using those to pay for nursing home care is not all that rare and it is becoming more common every year. The recapture or penalty phase is 5 years in south dakota.
Cory, based on the quote, it doesn’t seem like goodwin is saying quite you are suggesting. He just seems to think that folks able to pay for their own care should do so before leaving thier estate to their loved ones, rather than being legally allowed to transfer wealth to other folks and then qualify for medicaid.
The people who take advantage of south dakota’s lax laws are not the main problem. The main problem, if you think medicaid is over-used, is the lax laws allowing it to be taken advantage of.
Wisconsin had a state inurance program for the poor and wingnuts under Walker apparently decided that was discrimination against the koch bros, so they opened the program to everyone.
Mr. Goodwin represents District 30 where it is mandatory the legislatures are all insaner than most. He is just dumber than most. Mr. Goodwin purports to be a conservative but here he is writing in the newspapers against people who worked hard all their lives and earned their money.
Interesting posts on Goodwin. Has anyone ever wondered where we would be without the wars we are fighting and the decade upon decade, we continue down those senseless money pits?
“”Seventeen and a half years later, the US Congress has rarely focused on the war (not) to end all wars and there are still 14,000 American troops (and the usual set of private contractors) there, along with enough US air power to … well, blow up a lot but not change anything decisively. Of course, the Taliban were long ago sent to hell in a hand basket …
… Whoops! The Taliban in 2019 are stronger and in control of more territory than at any moment since they were driven from power in November 2001. Staggering billions of American taxpayer dollars have gone into the “reconstruction” of that land to little effect (while the domestic infrastructure of the United States has begun to crumble without significant new federal investment). Meanwhile, the security forces of the American-backed Afghan government have been taking casualties at a reportedly unsustainable rate.” Tom Englehardt April 17,2019
Think of those billions upon billions of taxpayer dollars being used for our own infrastructure, schools, nursing homes and so much more… Naw, phantom teachers are such a juicer target.
The idea that multimillionaires who can easily afford, without pain or meaningful depletion of assets, to pay very high nursing homes costs would choose to rely on medicaid and place themselves or their loved ones in less fancy medicaid dependent facilities seems counter intuitive. Absent some objective studies to the contrary, the accuracy of Wyland’s speculation that “Sheltering or transferring a large estate to avoid using funds to pay for nursing home care may happen, but it’s rare” seems much more likely.
It is more likely that asset transfers are used by middle class, and perhaps upper middle class, families to avoid depleting modest assets. For these folks, medicaid eligibilty is likely inevitable in any case as the assets in question will often be insufficient to cover all of the costs of nursing home care beyond the 5 year look back period.
Goodwin’s conclusions superficially seem to make sense, but seem rather doubtful when considering the financial realities that middle class families face compared to wealthy multi-millionaires, who by definition have more than enough assets to cover the cost of the best, most expensive, nursing home care available.
A much more factually accurate argument for Goodwyn is that he seeks to decrease medicaid expenditures by removing the legal method available to middle class families for avoiding the depletion of a loved one’s life savings by the costs of nursing home care.
Justifying changing the asset transfer exemptions law as a means to save medicaid expenditures by sticking it to wealthy multimillionaires, however, seems factually unsound. As Cory suggests, lowering the estate tax exemption to a more reasonable amount would go much further in increasing the tax share of wealthy multimillionaires to meet the costs of public services that benefit their families and businesses.
bcb, lots of south dakota millionaires are sitting on large farms with almost no cash in the bank. Those are the people squirreling their land away and qualifying for medicaid. If you ask these folks – who value their land over money and comfort – they will tell you they are fine receiving less-than-stellar services if it means they don’t have to sell land.
I can’t say whether changing the medicaid eligibility rules or changing the estate tax would have a greater impact. Yes, there may be more cash collected from a reduced estate tax exemption, but all of that cash doesn’t go to medicaid programs. On the other hand, if fewer folks qualify for medicaid because our lax laws change, that is a direct and exclusive benefit to medicaid.
I know in your world Mike whatever you say is truth but in reality you need actual proof and not listening to the voices in your head. And bearcreek is right, if they have the money they’ll use it and NOT put themselves in a poorly funded location and less par facility. Sorry guys, but this argument is junk.
Steve says, “if they have the money they’ll use it and NOT put themselves in a poorly funded location and less par facility.”
Do you know any farmers, steve? Ask around. Over and over, they accept modest lifestyles as an expected sacrifice for building the family farm. In fact, many are apparently proud to do it.
It’s funny how you tell mike he needs proof for his comments but you just run your mouth with your own junk opinions without a shred of evidence.
Some estate attorneys advise their clients on the art of removing ones assets from their control in order to gain nursing home care on the government dole. Goodwin is once again correct, it happens and increases the cost for the approximately thirty percent who pay cash. Nursing homes can’t exsist on the goverment funded patients. The cash paying patients make up the shortfall. South Dakota used to have a 40-60 match but that went up to 50-50 during my last years in Pierre because of increased income in our state. The “look back”period used to be three years but was increased to five to try to discourage the transfer of wealth, maybe it needs to be longer. When one hides assets South Dakota taxes go to pay the states’ 50 percent obligation. The number of people doing this is unknown, but even one is to many.
Ryan, I am not sure we disagree on any particular facts, except perhaps how to classify “cash strapped” families owning substantial acreage of farm land valued at over a million dollars. Such folks don’t strike me as multimillionaires as referenced in Cory’s post. Rather they seem to fall within a middle class or upper middle class category. And given the unique nature of farmland, including subdivision difficulties, zoning issues, access to roads, etc., it seems even more understandable that selling portions of farmland might be a bigger problem than using alternative methods that are available.
That said, it doesn’t mean a policy refusing to subsidize nursing home care for these families is inappropriate, it just means that absent some studies to the contrary the “multimillionaire” rationale is a false narrative.
THEY AREN’T MULTIMILLIONAIRES RYAN!
OK, so steve and bcb think that a person with $20M in farm land is not a multimillionaire.
I know bcb isn’t stupid, but I’m not sure yet about steve.
You guys don’t think that you have to have a bag of gold coins or a million bucks in your checking account to be a millionaire, do you? Most people with large estates are not sitting on cash in the bank. They are invested in land, businesses, stocks, bonds, and all sorts of other non-cash assets. If you want to pretend that wealth isn’t wealth, fine, but I disagree.
If either of you is curious, google the definition of millionaire.
Show me the guy with $20M in farmland “only” and currently on medicaid. And don’t say privacy otherwise it’s just conjecture.
BCB, I understand you point, but should farmers with millions of dollars in assets (land and equipment) be allowed public subsidies for care?
One differentiation I think ought to be made about land versus other assets (like to bag of gold coins and money in checking accounts or even stocks) is that property taxes are paid on land and not on the other assets, so land owners have been helping the cause along the way.
Here is a guy worth 20 million, doesn’t pay his taxes but gets his kids on cheap insurance thanks to Wisconsin wingnuts. https://www.democraticunderground.org/101630193
This was about the time Walker and goons kicked 22k poor people off the state insurance plan because they couldn’t pay increasing premiums.
https://assets.aarp.org/rgcenter/il/2007_07_medicaid.pdf
Protections in Medicaid estate recovery -plans. Seems Medicaid is entitled to recover government funds from survivors and estate holdings and bank accounts.
o, just to clarify, my comments have not asserted that a policy refusing to subsidize nursing home care for families owning land is inappropriate.
And Ryan, I don’t think Steve and I have been in total agreement, although we both seem to believe that actual multimillionaires are not likely to transfer their assests in an effort to become eligible for medicaid. As for people with $20 million worth of land, the idea that they would be cash poor and merely middle class is beyond what I intended to suggest. I don’t know, but I would suspect that people with enough land to qualify as a “multimillionaire” based on such resources might have lines of credit that would enable them to access whatever cash they needed for nursing home care.
Steve, please clarify your position for me. Goodwin claimed there are multi-millionaires abusing the system… so you are saying that Goodwin is wrong… right?
Ryan, Goodwin clearly doesn’t want those multi-millionaires to hand off their wealth to their kids. If he feels that rich people are abusing public services, an estate tax would be a great way to either recapture the inherited wealth owed to the state or to deter such shell games in the first place.