Monday, September 21, 2009

‘Politicians say more taxes will solve everything…And the band played on…...’

In 1970, the quintessential Motown group, The Temptations, sang these prophetic words in an effort to stay current as the music scene changed in their song, “Ball of Confusion’.

Apparently raising taxes has not ‘solved everything’ since 1970, has it? If it had, we would have everyone covered with real health care 'insurance', no poverty, balanced budgets and we would have landed spacemen on Neptune by now. We have had 30 years of higher taxes on everything and we still can't say we have solved many (any?) of the enormous problems that still scare us to death.

Let’s take a closer look at the the so–called “Baucus Bill’, the most recent lurch the left to ‘solve’ health care by raising taxes.

Long-time readers will know that we are not partial to either the notion that raising or lowering taxes will solve everything from balancing our budgets to abortion. (several elected representatives have made the assertion on both sides, believe it or not, over the years). Changes in tax policy usually work best at the end of a recession cycle to spur incremental growth into the next economic recovery cycle but have nominal effect in the middle of expansions. The best thing to do is just leave the tax debate to the side and have Congress focus on the fiscal (spending) side of the budget, which is about all they can or should deal with anyway as a practical matter.

Somehow there must have been a little imp in the Senate Finance Committee meeting room whispering into the ear of the Chairman that it was a ‘good idea’ to force people who don’t buy health insurance to pay a 13% ‘penalty tax” instead. Let’s see…a person with a family of four and an income of $50,000 per year who can’t afford to pay for health insurance of close to $1000/month as it is today…will then be forced to pay an additional tax over and above their payroll taxes (they are probably not paying any federal income tax right now) of, oh, let’s say….$6500.

And this is from an Administration that said “No one making under $250,000 in income would ever be taxed under my Presidency!”

Talk about a “Ball of Confusion’!

Or how about the provision that would tax insurance companies for offering to sell high-end “Cadillac’ health insurance plans that cover every medical procedure under the sun? Is that not going to drive everyone's health care premiums even higher which is a "tax" under another name? Why not address the real issue and limit the deductibility of all corporate health plans to the standard BCBS plan available around the nation and save probably close to $500 billion over the next 10 years that way?

Or deal with the core issues of raising the age-eligibility for Medicare (trillions in savings going forward); comprehensive tort reform nationwide (trillions saved again) or trying to figure out just how many super-billionaires should remain on the rolls of federal assistance programs like Medicare Part B?

Any and all of these core fundamental issues will help pop the balloon of skyrocketing federal health care costs which is what we really want and need in the first place.

Poets and writers are always the harbingers of cultural, political or social change, so the experts say. 'The Temptations' knew we couldn't solve all our problems by raising taxes way back in 1970.

Where were our current elected leaders in Congress back then anyway? Weren't they listening to any Motown on vinyl records like the rest of us?

“Eve of destruction, tax deduction
City inspectors, bill collectors
Mod clothes in demand,
Population out of hand
Suicide, too many bills, hippies movin'
To the hills
People all over the world, are shoutin'
End the war
And the band played on.”

Copyright 1970 Jobete Music Company, Inc.


  1. All good points (although I never liked the song). While mandating individuals to purchase insurance is not a "tax," in my view, it is a really bad idea and counterproductive to slap someone with a tax for not buying a policy. A better way would be to 1) limit the requirement on what kind of policy to buy so they're not forced into Cadillac plans when a catastrophic one will do, and 2) assign individuals to a plan when they don't make the choice (past GOP bills provided for that) along with a sliding-scale tax credit so they better afford it. I always thought carrots work better than sticks.

  2. Wasn't really a Temptations-style song we all loved, now was it Congressman Bucknelldad?

    Agree on all point above. Honey and Carrots work better than sticks and threats. Read the book, "Nudge' by Richard Thayler, I think it is.


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