Wednesday, February 24, 2010

Universal health care and compassion

How can it be that in America some people actually don’t seem to want all people to have basic health care?

How could anyone be so cruel and heartless? It would almost seem as if Republicans and Tea Partiers are without hearts and souls!

This is especially true when the solution is so simple. Just tax the rich!

They all live in luxury and have more than they could ever use anyway. Shouldn’t they pay their fair share for being part of a country that enabled them to amass such great fortunes in the first place? If the rich would just pay their fair share they would still be rich, but everyone would have health care.

Great theory, isn't it? What if the reality is different?

I once worked for a couple of rich families who had joined together to form a dairy business. They had their own milk processing plant, some barns, farm houses, sheds, several trucks including a couple tractor-trailers, a lot of very expensive farm equipment, probably close to 1,000 head of cattle and hundreds, if not thousands of acres of land.

They were undoubtedly millionaires, probably several times over--on paper, that is, which is where they had the vast majority of their money.

If you saw where they lived, what they drove and what they wore, you would never have guessed they were millionaires. Their money was tied up in their business.

So what happens when “rich” families like this get hit with higher taxes?

They have to make cuts. You might think they could just make cuts in their personal income but I doubt that these two families had a whole lot of discretionary income. Their money was tied up in their business!

So if they had to make cuts because of higher taxes, one of the most cost-effective ways to do this is to cut employees (employee salaries and benefits often take up the biggest slice of the budget pie). This could mean that members of the owner’s family might have to plow some fields or haul some milk themselves, but, hey, we all have to tighten our belts sometime.

Meanwhile, some formerly employed dairy workers would now be out of work which means they would no longer have health insurance or the means to purchase health insurance. And since they no longer have an income, they are no longer paying taxes to provide emergency room services for anyone else.

When this scenario gets repeated thousands of times over, that is, when every “rich” small business owner in America—farmers, plumbers, contractors, small construction companies, small stores, etc.--gets hit with higher taxes, unemployment just gets higher and higher. Those who get laid off have more and more trouble finding other jobs because other small businesses are also laying people off.

The more we tax these “rich” people, the higher the unemployment goes—not necessarily because the rich people are all heartless jerks, but because cuts have to come somewhere and many who are “rich” on paper just can’t take the hit out of their own pocket (after all, they have mortgages, utilities, car payments and other loans to pay off too).

Higher taxes do not just affect small business owners, of course, but unlike small businesses, giant companies and huge corporations often have other options. If their employees are unionized, it may not be easy to cut salaries or benefits to compensate for higher taxes but their tax lawyers may find creative ways to lessen the impact of the tax increase or to avoid it altogether. This means that the rest of us get stuck with the tax burden that they are not paying.

When the corporations can't avoid the impact of higher taxes, they can pass the higher taxes off to us in the form of higher prices. Either way, we pay.

Of course, raising prices can only get them so far. Companies have to be competitive to stay in business. We might lament the "evilness" of corporations that lay people off, but the reality is that if companies do not stay competitive—both here and abroad—they go out of business and huge numbers of people lose their jobs (unless, of course, the government steps in and uses even more of your tax money to bail them out—which in turn requires the raising of taxes which leads to even more unemployment)!

Another option for corporations might be to outsource the jobs overseas where the salaries are lower and there is much less regulation (which also raises prices). This helps to keep costs down and helps the company stay competitive, but it means more and more layoffs in America and higher and higher unemployment. In other words, fewer and fewer tax-payers end up paying more and more taxes for more and more unemployed people to have health care.

This is true even if the government gets involved in heath care, except that when government gets involved, these fewer and fewer tax-payers are not only paying for more and more people, they may also end up paying for more and more government-mandated benefits—like abortions, breast augmentations, hair restoration or other non-essential but expensive procedures (included because of the political power of various special interest groups).

The commendable desire of so many Americans to provide health care for everyone ends up being a vicious cycle, like swirling water being flushed down the toilet—eventually bringing the entire country down with it!

On the other hand, what these "heartless, soulless Republicans" propose is that we lessen the tax burden on everyone—even the rich. This enables businesses to begin hiring again, not because businesses are all such noble institutions, but because with more people they can often make more money!

More jobs means more people have health insurance and more people pay taxes to provide health care for the needy. Lower taxes also means more money for you to spend which stimulates the economy which in turn, provides more jobs!

The difference in approach is seen in the stimulus package. Under the Democrat’s plan, literally billions of dollars have been wasted through outright fraud or through special interest payoffs that did little or nothing to stimulate the economy.

In fact, much of the stimulus money—which we were told was absolutely essential to avoid financial collapse of the nation— has still not been spent! Democrats were apparently holding out for the election year when they could use the money to influence voters!

By contrast, some Republicans proposed that if an economic stimulus was absolutely necessary, it should have been given in the form of tax relief to everyone! Rather than letting politicians dole out billions to their special interest supporters, the money should have given the American people!

Under this plan you would not have had to pay federal taxes for several months! Have you looked at your tax stub lately? Have you seen how much money the federal government skims off your paycheck?!

Just think what you could have done with that money! Millions of Americans spending billions of extra dollars would have genuinely stimulated the economy! It is hard to avoid the conclusion that Democrats opposed this plan precisely because it put the purchasing power in the hands of the people rather than in the hands of Democratic politicians!

Ah, but some argued that Americans would have just saved the money or used it to pay off bills!

So what's wrong with that?! If Americans had had that money to pay down their bills, just think of how many Americans might not have had to lose their homes or file for bankruptcy—in either case, by the way, banks and businesses end up holding the bag which means they have to make up for the loss some way (more layoffs, higher prices, fewer jobs).

If millions of Americans had saved the money, there would be billions more dollars in banks for businesses to borrow and use to expand their businesses, thereby increasing employment!

The Democrats’ plan has been tried before, in its more extreme forms by the former Soviet Union, North Korea, Cuba, Communist China, etc., and in its less extreme forms in modern Europe. It always fails.

Of course, all people are sinners which is why capitalism is often harsh and cruel (especially as it is described by propagandists in the media, education and Hollywood). But this is real life and unfortunately, in real life there are often no truly good solutions—just the best of bad options. Capitalism helped to make America the envy of the world! Even our poor were often rich by other counties’ standards.

The Democrats’ plan makes everyone poorer—except possibly those who are in positions of power and are able to legislate or buy their way out.

So while Congresspersons and the very rich do not have to live with the health care program they are trying to force on the rest of us, their program does give them enormous power over us.

I suspect that is the whole point.

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