From $30,000 to $20: A phantastic ending to my pharmacy woes
Welcome to “Not Pretty, Not Rich,” a newsletter about money, the economy, and doing things the hard way.
It’s Friday, March 19, 2021, and here’s this week’s rundown:
Good news: Household net worth hits a high
Other news: Tax raises?
Follow-up: Concluding my fight with Walgreens
Numbers and links
Americans’ household net worth just hit record levels: $130.2 trillion.
Who would’ve thought that after an economy-crashing pandemic, the sacking of the U.S. Capitol, and all of the other fun and exciting events of 2020 that Americans would be beaming over their net worth? It’s a surprise, to be sure, but a welcome one.
Household net worth—the difference between assets and liabilities—ended the fourth quarter at $130.2 trillion, the Federal Reserve said Thursday. That was up 5.6% from the third quarter and 10% from the end of 2019.
The gains came as financial assets—particularly corporate equities and mutual-fund shares—rose steadily after the first quarter of 2020, when markets suffered a sharp drop. The S&P 500 stock index rose 12% in the fourth quarter and 16% for the full year, propped up by extraordinary stimulus actions from Congress and the Fed.
So, there you have it: Most of that increase in wealth is the result of stock prices going up. And stock prices went up because the government threw a whole lot of money at people. Rising real estate prices also helped, the report says.
Alas, if you don’t feel like you’re richer than ever, that’s why. But I’ll tell you what, my 11 shares of Goodyear Tires are up like 78%, so that’s pretty cool. Now, if I could only afford to buy a house…
Say it ain’t so, Joe!
President Biden is looking to raise taxes.
Why Joe, why?: As many expected, President Biden is looking to raise taxes, mostly on wealthy people, and in short order. If all goes according to plan, it would amount to the first significant tax increase in almost 30 years. With an expensive pandemic (hopefully) concluding soon, infrastructure crumbling around the country, and myriad other things to pay for, Biden’s looking to get some revenue going to help cover the costs.
The good news? Most people probably don’t need to worry much, as the tax hikes are mostly aimed at the wealthy. The plan would raise the top federal income tax rate to 39.6% for those earning more than $400,000. There would also be changes to capital gains taxes and estate taxes for the $1 million+ crowd.
Also, his plan would raise the corporate tax rate to 28%. You may remember that the Trump administration’s big tax-cut bill in 2017 cut the corporate rate to 21% from 36%, so even if this plan were to pass, corporations would still be better off than they were five years ago.
What’s next?: With the Democrats in control of the Senate, House, and White House, there’s a good chance that this plan, in one form or another, becomes law. While not every provision will make it through, it’s a pretty popular idea to tax the rich and to increase taxes on corporations, so the public is, largely, probably behind Biden on this.
And for all of the crazy culture war nonsense that we experienced during the election, this was really what many companies and people feared more than anything: A tax hike.
Again, though, the tax system is a mess, and there are plenty of loopholes to jump through. The IRS barely makes an effort to go after wealthy tax cheats anyway. And, as stated, corporations would be paying far less under this plan than they were under Obama or Bush Jr.
Of course, there’s a big battle to be fought over this in the coming months. But with mounting deficits, debt, and a lot of other problems, someone, at some point, was going to need to bite the bullet and try to raise taxes.
My pharmacy fight, part II
Previously, I had written about how I was asked to pay $28,500 for a one-month supply of prescription medication. Here’s the end of the story.
Back in October, I shared with you all a story about a trip to Walgreens. I had been prescribed an extremely common medication for an extremely common and minor medical issue in August and had been unable to get my hands on it. At the time, the pharmacist told me that my insurance was refusing to cover the charge and that if I wanted to pay out of pocket, it would cost me $28,500.
Well, here we are, almost five months after that, and coming up on eight months since my original doctor’s visit. And after some back and forth between me, my doctor, and the insurance company, I was able to walk into that same Walgreens (shout out to the kind folks at the Dobbs Ferry Walgreens for putting up with me), plunk down a crisp Andrew Jackson, and walk out with the medication.
That’s right, after all that, I only ended up paying $20, while my insurance, apparently, was on the hook for nearly $30,000:
Everything about this is stupid. This is a one-month supply of this medication — what if this were a life-threatening problem? I’d be dead by now, because of some paper-pushers in Des Plaines or something.
Obviously, this is a largely inconsequential run-in with the machine that is our health care system, but let me tell you, it needs a serious overhaul. Charging $30,000 for medicine is like charging $750,000 for a used Toyota Tercel.
They’re basically making up the prices, because they know the insurance companies will be on the hook for it. Insurers, then, turn around and charge everyone higher premiums, and so on and so on, and before you know it, we all may as well be robbing pharmacies for inhalers and prescription-strength Tylenol.
Anyway, rant over. I got my medicine, but now I need a Xanax.
Numbers and links
12: The number of twins being born per 1,000 births, the highest rate ever. (New Scientist)
75,000: The approximate number of operators in SOCOM, the combined special forces of the U.S. military (Navy SEALS, Delta Force, etc.), which are operating in 80 countries. (The Atlantic)
Gasoline demand has peaked — and will probably never reach pre-pandemic levels again. (The Wall Street Journal)
Americans are buying too much stuff, and it’s clogged up the ports. (Axios)
Companies are betting on a big Vegas comeback this decade. (Bloomberg)
NFTs, sports cards, crypto… there are entirely too many things to throw money at right now. (New York Times)
“Not Pretty, Not Rich” is a newsletter about money, the economy, and doing things the hard way, written by me, Sam Becker. You can connect with me through my website, Twitter, LinkedIn, or send me an email at email@example.com. Also, if you enjoy this newsletter, I’d really appreciate it if you would share or forward it to others.
And remember, the contents of this newsletter are not meant to be taken as advice. It’s informational and entertainment only.