Wisconsin’s Biggest Use Tax is Hidden in Governor Walker’s Budget.

[hue]

http://wesselselderlaw.wordpress.com/2013/09/08/wisconsins-biggest-use-tax-is-hidden-in-governor-walkers-budget/

tax guyDid you know that the Governor’s budget for 2013-2015 contained a secret tax estimated to produce 10 million dollars over the next two years? Would it surprise you to learn that the tax rate on this “use” tax was not 5% or .5% or even 6%, but instead was 100%? That’s right, it is a dollar for dollar use tax. For every dollar someone uses in Medicaid when they are in a nursing home, they will have to pay it back when they die, or when their spouse dies. Act 20, which is the 2013 Biennial Budget for the State of Wisconsin, substantially expands estate recovery for the Medicaid program. This is the tax I am talking about. It is in the most classic sense a “use” tax on people who get Medicaid.

The irony of this “use” tax is that the people who are being forced to pay it – primarily senior citizens – have worked hard all their lives and are now facing long term care due to dementia, stroke or other illness. During their long working lives, these people have paid their tax dollars in income tax, property tax and sales tax. They have already paid for the long term care services they are receiving. But they are being forced to pay out a second time because they had the audacity to actually use the services their tax dollars have funded. So really, it is a double tax. Where did those tax dollars go that they paid the first time around?

Well, it’s not called a tax. Is it a tax?

A tax is defined generally as a monetary burden imposed upon individuals or property owners to support the government. It is a payment exacted by legislative authority, not a voluntary payment or donation, but an enforced contribution. See Black’s Law Dictionary. “Excise taxes” or “use taxes” are taxes paid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges. People who receive nursing home Medicaid, and certain other services, are now required to pay for having received this service. Payment is directly based on the service that was received, and therefore is based on use...

So why single out the most frail and vulnerable individuals in our communities, who never chose to be in need of long term care, to hit up with a 100% tax on what they received, when they die? And when they already paid for it during their productive lives?

[atreides1]

1. Once again

More proof that the people of Wisconsin made the right choice for Republican control of their lives!

[Scuba]

2. "... why single out the most frail and vulnerable..."?

Because they can't fight back.

[dembotoz]

3. we need to rub their noses in this

[ewagner]

4. Not sure I understand

how this is different from what has already been in place.

My Mother-in-law was an Alzheimer's patient in a nursing home for 14 years. When she died (mercifully) all of her remaining assets were turned over to the State through the program.

She went through her life savings and the meager amount she received from the sale of her home and assets within 18 months and became pretty much a "ward of the state". Her Social Security check was sent to the State every month and she was allowed to keep $75.00 per month of it for having her hair done, replacement clothing or newspapers or other treats (within two years she was beyond reading and treats).

There were frequent accidents and crisis' but most of those costs were covered by medicare or medicaid depending on the situation.

In short there was no prevention of impoverishment then and it looks like there isn't now either. I suspect we will see more TRUST accounts set up to shield assets from these laws but they have been used extensively in the past too.

Nursing homes are the greatest TRANSFER OF WEALTH vehicle ever invented. Nobody seems to notice that.

[AllyCat]

6. Is this different because they can now come after

Your heirs?

[ewagner]

7. We have a spousal impoverishment law

that is supposed to protect the spouse of a medicaid recipient from total impoverishment. I think the limit was $60,000 in assets plus any interest in real estate (the surviving spouse's home)...I don't know if this act repeals or supersedes the spousal impoverishment act.

[AllyCat]

5. This is terrible. Everything from this man is terrible