More tax, less health care

Supposedly, the Senate will now vote on some version of the health care taxation bill by Christmas. That is their gift to us, they claim. One more step towards the utter ruination of the nation is to them progressive. This is bizarre. But, that’s if there are no more surprises and drama. It will, however, really help not one person except those in power. The entire apparatus will attract power seekers, to live off the public trough, as surely as bears are drawn to berries. It will seem like it helps, for the word is always “but the government will help us.” But the government cannot help you without taking your own money and giving it back to you. And it always deducts a bit to help it help you. Nor will it create one new doctor or nurse, nor hospital or clinic. It’s like all the people who thought that the world would be “different” when the year 2000 came along. Oh progress! Oh new thing! Oh new life! And then – then what? Nothing, no change at all. Everyone went to work at the same job they had a few days previously and they drove the same car and on the same highways. Nothing was changed except a data entry point – 1999 became 2000 – big deal, so what? That’s what we are getting with health care.

It is said that all the taxes will be on the rich – except they get their money from the prices they charge for whatever it is they are selling to enable them to get rich. They will simply raise their prices. And you will pay them. Even if not directly, you will pay. For even if you do not buy the product or service offered by the rich person newly taxed, whoever does will have to spend more. So they will raise their prices to raise the money to buy what they want, and perhaps pay their own new tax too. How many layers between the tax and you paying for it is sort of irrelevant. But your health care will not change.

It is said that the tax will be on corporations — except they too get their money to pay their taxes from the prices they charge. So they will put their prices up, and you will pay it. Again, makes no difference if it is or is not directly by your purchase. I do not buy Coke, but the Coke Corp will be taxed. They will raise the price of Coke. Some shopkeeper wanting Coke will raise the price of what they sell so that they can afford their standard of living – which is the Coke they enjoyed which is higher priced. And thus the tax in the price will eventually be passed along to you and me. And we will still have the same health care.

After the prices go up the government will blame the businesses and not themselves. They will even say not only are they innocent, but that they must come to rescue of the people – who are suffering because of the taxes that have to be paid. There will be great calls for the control of prices. Should that come about expect shortages of every kind for whatever thing which cannot have its price hiked. Government throughout history has blamed business for all the price hikes, and usually laid it at the feet of “profit.” Yet a rising price because of taxes to be paid is not at all increased profits. It is merely passing along the expense of taxes. The shortages, of course, will first start in health care, because that’s the first sector whose prices will be controlled. It will also be the first sector of the economy that will require people to buy whatever is sold by a government approved entity – or forced consumership. And it will force the seller to sell only this product and not that product, however it is defined by some bureaucrat. That’s price control one way or the other, and thus the shortages will become. In 5000 years of history price controls resulted in shortages. And sooner rather than later. Then starts the black market, which leads to a call for more law enforcement to stop the criminals created by the government because people can not do what they want, but only what the government wants them to do. This time will be no different.

Our economy is astoundingly complex. No one, absolutely no one, understands the entire thing. No one can figure out all the consequences of rules, policies, regulations and taxes, nor new economic methods, new resources and uses of old resources, new products and whatever innovations come about. The variety and the innovation of our dynamic economiy is simply beyond comprehension by any one person or group of people. They are kidding themselves if they believe what they say.

Alas, for more than 40 years the basic economics text is Paul Samuelson’s Economics – taught in all those classes nationwide that our policy makers read when they were in college. A hallmark of the discussion within is: “All else remaining equal we can do this.” Whatever it is that is proposed is looked at in some vacuum, and all else remains equal in the consideration. Then they decide it if is good or bad. But what happens if all else does not remain equal? Well, then you have a problem. And nothing ever remains equal.

Let’s look at the reality that some existing product will be taxed. Let’s call it candles. Then innovation comes along, and no one needs candles. All the taxes collected from candle manufacturing and sale must disappear. If no new tax was levied on, say, light bulbs, there would no taxes collected. So the tax is shifted. Did new taxes help anyone? No. It is still the same tax. It was the light bulb innovator who helped people. Imagine if government taxed innovation? Ah, well, that’s what the Senate is about to do.

Now, suppose, in a stimulus investment type law the government decided to put money into creating a better, new and improved candle. In this way, no jobs will be lost, and workers will be protected. People are helped, it is said. Just like we did with General Motors, and just like we are investing in new and improved health care – and so a bureaucrat who has no idea about innovation done by a private company either stifles the innovation, or continues the subsidy to the obvious failure, and puts a tax on the new innovation to pay for it. That will happen too, with health care. It is just impossible to know right now, because of the very complexity government thinks it can tame, in what sector or with what company it will happen. Innovation will come, for people think. But our tax and spend bureaucratic system will be dedicated to the old, with its happy constituents. And then either the new innovation will not come along – and the progressive way will stop progress – or it will be taxed, making it more expensive, to pay for the existing failed option. Such is the nature of every single government run company since well before Cheops built his pyramid.

Now, health care taxation wise – the Senate is proposing some 480 billion in new taxes – and that means, somehow, somewhere, for someone directly and all indirectly, prices will rise by 480 billion bucks. But there is no innovation, no new health care, no better health care for anyone. We will have the exact same health care the day after this bill is passed as we did before. There is only new health care taxes and government enforced allocation methods (also alluded to as rationing, but denied,) and the creation and soon protection of an all new health care bureaucracy that does nothing but collect forms and force you to pay for the privilege. And any and all companies that sign on, and accept the law, its rules and regulations, and subsidies, then whatever exists at the moment of surrender will continue to exist – and all innovation will be squashed. And that means the price will go up on new style and old style health care, and the whole thing will be more expensive, thus blowing the estimates out of the water.

Now, the House has a different version of the bill. And so they must be reconciled. What will come out of the mess is a slew of new bureaucracies – not a one of which can improve health care. They can only create more expense that has nothing to do with health care. A bureaucrat in Washington is not new health care. New forms to fill out is not new or better health care. No new health care is being created. Not even so called uninsured people will get more and better health care – for no one is denied now. Not one person can be denied. If you have no money for health care you are automatically enrolled into Medicaid which is an entitlement program for anyone who cannot afford health care. You cannot be denied health care paid for by Medicaid. The fact that people are not on Medicaid when they need it is because they simply had no need for health care. When they needed it, the get it automatically – that point cannot be stressed enough. It means that there is no such thing of some poor person who cannot get coverage – they are entitled to it. And which ever sector of the health care system that they enter will have a case management person to make sure their case is made.

Now, because they will be required to get health care, they are going to pay for the health care received by others by paying a tax for what they do not buy or want, but they are now forced to buy, or pay a fine, and of course, face a tax. It’s convoluted, but the bill will require people to buy stuff they don’t want or face a fine, all for stuff they are entitled but don’t need at the moment. The cost is no more expensive by adding people in – for those not in are not using the services that have any cost, they are Zero dollars in the health care costs of anyone. But now they will pay a tax. And the people who are already entitled to the health care will get the exact same health care they already have. But, because as is true, by the government being the owner of a company – Medicare/Medicaid – they set prices that are unrealistic, and are political, and thus cause both shortages and higher prices. Their solution is to give us more of the same on a larger scale.

The thing is so convoluted that to even contemplate claiming that you known anyone will get better health care is tomfoolery – but you can point out what will happen due to the inexorable math of stifling innovation, controlling prices, and subsidising failing companies. Mathematically there can be no other outcome, however much desired. Why, even people who supposedly should know this come up with wholly different costs of the costless bill they talk about – ranging from 850 billion to 2.5 trillion – but no new debt or deficit, or taxes, or anything whatsover – just happiness and bliss will flow from the annointed legislation. Few of them seem to point out that every single federal program ever set up was soon costing two to five times more than promised. Promises are fine – but those based on the government ownership model cannot work, just as they never have previously. Now it will merely be a matter of time before it is apparent.

And will anyone be healthier? No. Everyone will have the same health as they did. They will go to the same hospitals and the same doctors – only now they will have to deal with any number of new bureaucracies and a slew of new taxes – all so that they can get exactly what they already have. In fact, promoters of the bill claim exactly that you will get exactly what you already have but it will be new and improved.

And when the costs of the existing health care comes along, on top of which is added the cost of the new rules, regulations, taxes, laws, agencies, panels and whatever, then the cost will go higher. It is a verity. You cannot provide more of government without it costing more. Government is people – and labor is cost expensive – and government will always pay their people before they pay out benefits to the people taxed to pay for them. So you will wind up with the same health care, and millions of federal bureaucrats will have jobs to tell you how you should do what you were already doing. They will even have the incentive to lower your benefit to increase their pay. This is reform in our time.

The only other option is for rationing by those who control the money – but they assure us that do not have this in mind. Yah, right. Welcome to higher priced ever more stodgy, stinky and rationed health care.


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