Though social policies sometimes governed the course of tax policy even in the early days of the Republic, the nature of these policies did not extend either to the collection of taxes so as to equalize incomes and wealth, or for the purpose of redistributing income or wealth. As Thomas Jefferson once wrote regarding the “general Welfare” clause:
To take from one, because it is thought his own industry and that of his father has acquired too much, in order to spare to others who (or whose fathers) have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, “to guarantee to everyone a free exercise of his industry and the fruits acquired by it . . . Thomas Jefferson
COMMENTARY
Taxing selected groups in the United States exclusively for projects that are for the so called common good is a dangerous precedent. That precedent is being set in the Democratic congress and White House.
Altering the tax code is not new. It has been the favorite toy of politicians since the income tax was formally initiated by the 16th Amendment to the Constitution around 1913 (then as now, designed to punish the so called rich for their economic excess or success, whichever version you wish). The withholding tax on wages was introduced in 1943.
If health care is a national priority then all should pay, not just a very limited few. If defense is a national priority then all should pay, not just a very limited few. The current method outlined to pay for the massive expansion of federal control of health care is nothing more than a demagogic populist ploy by Democrats to make it easy for the majority of constituents to support this federalization of health care because it “won’t cost them anything” as in “it will be free”. Whoopee!
In tax year 2003 there were over 18 million non-filers and another 33 million who paid no taxes – all of these were modest to lower income returns. Should not citizens who benefit from our governmental, economic and military system pay at least something? $5? $10? Should not all citizens at least file a return? Is that too high a price for the privilege of American citizenship?
Have we learned nothing? Is our congress totally bereft of any semblance of public duty and commitment to honor our founding principals? Appartently, when it comes to their agenda, the Democratic majority cares not. They are willing to scuttle the great engine of American ingenuity and free market initiative which made us great, and yes, made our medical system great.
When few are invested, few care about the overall system and its outcome. When all are invested, most will care about the system and its impacts and outcomes.
We have argued aggressively for Real Health Reform. This bill does contain some of the ideas we have been touting for some time. However, it takes them and then uses them as pretext for massive intrusions, expansions and usurpations that are neither necessary or called for.
The current prescription offered is sadly typical of all of Washington DC thinking. Let’s not just fix the flat tire on the overall excellent car, let’s take the car apart and remake it to OUR liking . . . the way WE think a car should be made . . . and while we are at it, we will remake the way a person operates that car, parks that car, washes that car, maintains that car and we will in the end decide when that car is no longer useful, costs too much and should be discarded.
This my friends, in the end, is the point which will be reached in time if federalization of the health system proceeds, as it appears it will. Once down this road, return is not impossible, but improbable. There is still time as the Senate moves toward its final version of a bill for course corrections. Those corrections could still solve the majority of issues we face in reforming healthcare without massive costs and massive federal intervention.
If additional taxes are needed, all should participate if this is to be a national system of reform. Recall the words of Founder Thomas Jefferson above and write your Senator while you still have a chance to make a difference . . . obi jo and jomaxx
HISTORY OF THE U.S. TAX SYSTEM – http://www.treasury.gov/education/fact-sheets/taxes/ustax.shtml
Nonfilers and Filers With Modest Tax Liabilities, 2003 – http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=283
When twenty percent or more of the nation’s wealth is held by one percent of the population, they can afford to chip in a few cents on the dollar for the good of the other ninety-nine percent. In this case it’s more like the top three percent chipping in for the other ninety-seven percent, but the principle is not very different.
The Kaiser Family Foundation provides a ten-page PDF document comparing and summarizing the Senate and House versions of the health care reform proposals.
http://www.kff.org/healthreform/sidebyside.cfm
Do not believe anything you read or hear about this plan until you have done your own homework. The link is at the top of the screen, above the now obsolete plans that also appear below.
(I have not studied these two most recent permutations of the half-dozen or two that were introduced at the start of the session. My printer is not available at the moment, but when I finish leaving this link a few places I will go to the library where I can make myself a copy to study.)
Critics are probably correct that there is nothing in the proposals to control costs. There never has been from the 1930’s when Blue Cross and Blue Shield became the first group insurance plans in the country. The only way that they were permitted to come into existence was the understanding that there would not be any controls on physician charges. The country was recovering from price controls of the Great Depression and the AMA, which opposed both the Blues, only relented in return for an agreement that there be no caps on charges.
Nothing has changed since then, which is one of the main reasons for the excessive costs of health care today.
Well, it is true that the top tier of wage earners has a large amount of income, but they also pay the lions share of all federal income taxes. The top 1% pay over 40%, the top 5% over 60%, the top 10% over 75% and the top 25% pay over 86% of all federal income taxes (based on the last year fully reported by IRS, 2006). The bottom 75% pay 14% of taxes and the bottom 50% less than 3%. So not sure that the reasoning of “let the rich pay” really makes sense. In a Republic such as ours, all should share at least some of the burden. The financing proposals of this plan places all of the burden on about 1.2 million taxpaying citizens, when over 300 million will benefit, including millions who pay zero in income taxes along with millions of undeserving non-citizens (read illegal aliens).
As for cost controls, it is certainly true that the AMA and physicians in general have opposed many of the things you outline. However, for some time, it has been the case that rates are set by Medicare and insurers and not by physicians. Almost all physicians are limited in compensation to rates set by payers (private insurers, health plans, Medicare and Medicaid). It really does not matter at all what the “charge” is on a bill, so you cannot go by that. All that matters is what is paid. In the case of Medicare, the national average is about 30% payment on billed charges. Medicaid is generally a little less. Over time private insurers have forced their payment schedules down to approach if not equal Medicare. This means that on average, physician payments overall range from 40-50% of billed charges. That is a pretty steep built in discount by any business definition. Hospital payment rates are in many cases even lower.
There are a number of reasons for “excessive” costs and I will address that soon, but suffice it to say that fingers can be pointed in many directions, including the public at large.
…for some time, it has been the case that rates are set by Medicare and insurers and not by physicians. Almost all physicians are limited in compensation to rates set by payers (private insurers, health plans, Medicare and Medicaid).
Absolutely right. In the same way that insurance companies manage health care and medical professionals provide it, all that is left for Medicare and Medicaid to do is divide the pie as best they can. As far as I can determine, that already-in-place rationing of health care is the only feature of the current “system” aimed at limiting costs. For all the other players “rates” (different from “costs”) are whatever the market will bear.
Last week’s post by Paul Levy at THCB danced around the issue but never got to the meat of the problem. I tried to get in my two cents in the comments but I haven’t learned the right language (which I call the language of business in the marketplace) to be heard by those whose entire professional life has been invested in budgets, projections, and other clever permutations of that same model that they seem to have forgotten where the money actually comes from and how it must be managed.
In the case of health care, after the last sixty years only two revenue streams remain: insurance premiums and taxes. The day when patients actually paid their bills to the doctor (pre-1930’s) stated to vanish with the advent of the Blues, and since then private insurance and Medicare (the US single-payer) have left patients with the notion that they only need to chip in some token amount and someone else will pick up the rest. Today’s patients are like guests in a restaurant who eat a costly spread then act like they are being magnanimous when they say “Let me get part of that tip,” expecting the host to reply, “No. I’ll get it. You’re my guest.”
Something needs to happen to let patients and their families know that there is no free lunch. (And part of that message needs to be the end of “Doctor, do everything you can!”)