Quote of the Day
While the right to talk may be the beginning of freedom,
the necessity of listening is what makes the right important.
Walter Lippmann
Increasing Legal Challenges to Health Care Deformation
One of the interesting things, in the aftermath of passage of the Democratic Party Health Care Bill, has been a growing list of states and/or governors challenging its constitutionality, particularly the individual mandate provision and the Tenth Amendment. (There are other arguments one could also make, such as equal protection: e.g., regulations which disallow actuarially sound premium pricing based on actuarial risk factors, e.g., lower-cost youth or males.) Some states with GOP governors but Democratic attorney generals (e.g., Nevada, Arizona and Minnesota) are joining the battle, and to a more limited extent the flip side (e.g., Michigan). I believe that there are strong grounds for challenging the mandate and Tenth Amendment based on traditional payment or regulation respectively.
For instance, in purchasing a car, I've routinely waived credit insurance, which enables payment when, say, I've involuntarily unemployed. In doing so, I'm implicitly self-insuring against the risks of unemployment, making car payments out of my savings. To this point, we've similarly had the option to pay for medical services out of pocket versus insurance. Why, for instance, can't I pay up front in cash for treating a broken arm? If I can go to a furniture store and get a discount for paying in cash, why shouldn't I be able to do the same with physicians, whom don't have to spend time and effort dealing with insurer paperwork? The basic reason we need health insurance is to deal with catastrophic conditions, such as birth defects, cancer, amyotrophic lateral sclerosis, etc.; that's not what's been discussed. The Democrats have been engaged in cost shifting, e.g., raising limits of Medicaid eligibility into the middle class, closing down "doughnut holes" (e.g., seniors have to share more of the costs of their prescription drugs under Medicare), abortion funding, etc.
It's hard to argue against the fact of the Tenth Amendment: in fact, health insurance has been traditionally regulated in states. If that isn't salient, it's hard to see where you draw the line on federal bureaucratic expansion at the expense of states. Furthermore, where you have cost sharing between the federal government and the state, e.g., Medicaid, it seems clear that the federal government, in raising income eligibility for Medicaid, has not negotiated the increase imposed on states, the very basis for the infamous Cornhusker Kickback. I myself have been a critic of state gold-plated health insurance mandates (although, to be sure, gold-plated federal mandates constitute a single point of corruption). To some extent, I'm surprised Massachusetts residents have not revolted against their sky-high health care premiums, to a large extent a consequence of expensive special-interest mandates. Massachusetts voters have established a precedent of saying "enough", e.g., Proposition 2.5 (limiting property tax increases).
I'm particularly concerned over the issue of benefit mandates; I consider mandates, particularly if insurance participation is mandatory, to be a form of taxation (i.e., money is fungible), and I don't believe that the legislative branch can simply delegate that authority to the executive branch. (I made a similar argument in my post yesterday over the FCC trying to regulate Internet service providers via "net neutrality" decisions.)
Volcker and the VAT Tax: A Contrarian Opinion
Let me at the outset: I do not want to give the Democrats a chance to do with the concept of a consumer/business transaction tax what they did with the income tax, which is to raise the ceiling indefinitely. I would also tie its enactment with simplification of the income tax, reductions of the federal debt. and spending constraints.
Paul Volcker, Jimmy Carter's selection as Fed Reserve Chairman, is widely recognized for breaking the back of inflation throughout the latter 1970's and has been one of Obama's economic gurus. In a Tuesday speech to the New York Historical Society, Volcker suggested, with the systematic structural deficit, we need to look at alternate taxes, like a European-style VAT (up to 20%). I'm somewhat inclined towards consideration of this, because (among other things) it eliminates these arcane, complicated tax rules, and up to 47% of working Americans in the fragile economy pay no effective income tax. As the Wall Street Journal notes, you have to go beyond the high brackets because there isn't enough money there to pay for programs, even if you confiscate all their income. And I've argued for some time that the status quo tax system is too progressive and anti-savings and investment. A VAT-style system is probably the best way to spread risk for things like catastrophic expenses (health, terrorist attacks, acts of God, etc.) and to cover operational expenses.
Volcker was not necessarily speaking on behalf of the Obama Administration, and a VAT would seriously undermine the President's campaign theme of not raising taxes on most households a single dime. And the Republicans can't wait to pound on this as a potential campaign issue: been there, done that with with the income tax. For another thing, Republicans rightly don't want to basically lock in entitlement problems like the recent health care bill; I wouldn't mind, for instance, covering my fair share of people with cancer getting necessary expensive health care. But I don't think we should be subsidizing normal health care costs, not to mention the fact that a VAT might bring in so much revenue that progressive spenders will expand their programs to spend it. If we implement a VAT, we must make it difficult to increase the VAT, we need to resolve entitlement insolvency issues, we need to simply any existing income tax system, and we have to cap spending and retire the debt.
Political Cartoon
Brian Farrington should also note that Obama and his fellow progressives have a severe case of spendicitis and spread tax-it shock syndrome.
Musical Interlude: "Beautiful" Songs
Christina Aguilera, "Beautiful"
Joshua Kadison, "Beautiful in My Eyes"
Joe Cocker, "You Are So Beautiful"
James Blunt, "You're Beautiful"
