Tuesday, July 14, 2009

I'll Have the Free Health Insurance, Please

We tax all the others and pass the revenue on to you

Stop the presses! Yesterday's USA Today/Gallup poll revealed that most Americans favor national health care... as long as they don't have to pay for it. Then who should? Employers, for the most part, disregarding that higher costs mean fewer jobs. "All those rich guys" comes in second, a soft drink tax is third. But we already know there's no free Mexican food, remember?

The employer idea comes with the kicker that if employers don't provide health insurance then they have to pay a "fee" to the gummint. For what, exactly? Presumably to reimburse the gummint for providing health care of its own. But doesn't that make the gummint the health insurance provider of first resort? Yes, it does. You're an employer and you have a choice between finding an insurer and negotiating rates and claims and all the rest or just pay that fee and be done with it. That would be a no-brainer for most over-worked employers. Expensive, maybe, but simple.

This only makes sense if you believe that health insurance coverage is the right of everyone in America. If you believe that, then you might also believe that everyone is entitled to own their own home. That's what BarneyF and ChrisD (of the sweetheart loan that you didn't get) have been pushing for a decade and look where that got Fannie and Freddie... and us.

There is a reason this business model doesn't work anywhere. For instance, GM isn't going to give away 2010 Volts to anyone who wants a car because they're in business to make a profit. Remember profits? They're good, not bad. If you want a Volt, save or borrow or do without. Same with health insurance. You're free to get it and you're free to do without and yes, we'll make exceptions for those unable to fend for themselves. The slogan "From each according to his needs, to each according to his ability" has never worked anywhere.

I also lean toward the message in the warning "If you think health care is expensive now, wait until the government provides it for free."

* * * * *

Private jetter Steve Rattner was our car czar. You knew that, didn't you? He quit yesterday after six months of orchestrating an auto industry bailout that may cost American taxpayers $100 bil. Seems as though he's been named in a pay-to-play investment scheme in NY. (Is pay-to-play all they do in NY?) TimmyG spun it that Rattner had "decided to transition back to private life and his family in New York City." OhhhKay! A multi-state, multi-line car dealer put it a different way: "They just did everything wrong." You mean like spending $100 bil -- a half-bil+ a day -- in six months? For nothing? The new czar is a steelworkers union exec. He doesn't know anything about cars either.

* * * * *

Fun facts #1: Goldman Sachs (GS) earned $9.54 bil in 2006 and $11.6 bil in 2007, dipping to $2.04 bil in 2008. In the second quarter of this year (2Q09) they earned $3.44 bil.

Fun fact #2: GS received $60 bil in bailout money, either directly, through loans or funneled from AIG.

Fun fact #3: GS set aside $11. bil for salaries and employee benefits for the first half of this year. That's, um, an $772,854/year average salary, company-wide. Of course the janitors don't get that, just the Ivy Leaguers and Stanfordites who caused the financial meltdown in the first place, so figure ten times that for the upper, say, third at GS. Assuming a 2,200-hour work year, your stim was just over an average hour's pay for all of them, five minutes for the upper third. In return for that, they wrecked the American economy. Can you even remember where your stim went? Can you remember where your country went?

Fun fact #4: Median American family income in 2007 (most recent year reported, half higher and half lower) was $50,233. That's, oh, around ten hours pay for my mythical upper third at GS. You = $23/hour, they = $3,512/hour.

Not-so-fun conclusion: The gap between them and you is insurmountable. They can't see you from where they are, so how can they understand your troubles? Your economy may be in the tank but theirs is just fine, thank you. You got a $400 stimulus payment, remember? They got $60 bil, of which they re-paid $10 bil and think it was payment in full.

Do you really think they're going to mind a soft drink tax? Health care will NOT be paid for by the rich. It will be paid for by you. Problem is, you're not going to get what you're paying for.

Just remember this simple phrase: "Your failure to plan does not create a crisis on my part."

I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.
Thomas Jefferson

Saturday, July 11, 2009

What Tax Surcharge?

We tax all the others and pass the revenue on to you

NYTimes pimps the health care bill's 1% tax surcharge proposal like this: "House Democrats will ask the wealthiest Americans to help pay for overhauling the health care system with a $550 billion income tax increase".

"Ask"? That plays better to readers than "force". Taxes are not voluntary payments that you are asked to submit. They are extracted from taxpayer wealth by law with the idea that the government needs money to run on and to provide essential services. Fair enough, the government actually does need money to run.

But whom do you think the Gray Lady chose to illustrate the tax pitch? Why, Representative Charles Rangel (D-NY), chairman of the House Ways and Means Committee, the people who write our tax laws. Problem is, CharleyR doesn't pay his own taxes!

CharleyR failed to report rental income from his Caribbean villa either on his 1040 or his congressional disclosure forms. He got caught scamming the NYC Housing Authority regarding his FOUR rent-controlled apartments, scamming the DC Housing authority about his DC residency and caught in a sweetheart loan deal whereby he doesn't pay interest on a contributor's loan to buy said villa. In fact, CharleyR has defended a Caribbean tax shelter (you know, where the wealthy don't pay taxes) on behalf of a principal donor to his own foundation. BTW, forgiven debt, i.e. interest payments that you haven't made for ten years, is taxable income.

Did I mentiono that CharleyR writes the tax laws, or at least oversees their writing. Oh, I did? Thanks to ProPublica for last year's overview of CharleyR.

It'll all be OK pretty soon, though, because CharleyR filed some House ethics complaints against himself. Say, did you know that statements made in a House ethics investigation can't be used in a later criminal trial? Neat side-step, Charley. And if you're not paying your own taxes, why not add a 1% surcharge to someone else's?

* * * * *

The WSJ headline is "Obama Exhorts Africans to Fight Corruption, Embrace Democracy". Well, yes, that is as good a banality as any. Too bad he didn't mention any of that in Moscow... or to the Iranian protesters.

* * * * *

In the '60s our marginal tax rate was as high as 90% and that spurred the growth of aggressive tax shelters. Watch for it again when the rich take exception to paying a surcharge for nationalized health care. And BTW, the plan still only covers 1/3 of our uninsureds. National health care is gonna cost more. Know how I can be so sure? CharleyR added a provision to increase the tax surcharge in one year. Has congress ever authorized a tax that they didn't implement? Nah, didn't think so, and what's a surcharge to CharleyR if he doesn't pay in the first place?

* * * * *

The gummint wants to sell 36 F-18 SuperHornet jet fighters to Brazil. OK, exports are good for America and Brazil's a reasonably friendly ally. Problem is, Brazil wants a "big portion" of the plane's components to be made in... Brazil. Boeing's gonna do it, too, resulting in 5,000 new jobs in Brazil. Nanci Pelosi is all about "... jobs, jobs, jobs!" when she's pitching health care reform. Not so much, I guess, when it comes to exporting 5,000 defense jobs.

* * * * *

Not much gained in the prez's international journey. Turns out that most of the G-8's members don't want to sign on to a new global warming bill and the major developing nations adamantly refuse to, something we have mentioned in the past. Then in Moscow we gave up some missiles and got in return... nothing. In Ghana, well, nothing. There's nothing to get in Ghana.

* * * * *

Giving money and power to government is like giving whiskey and car keys to teenage boys. P. J. O'Rourke

Friday, July 10, 2009

Cash for Clunkers

We tax all the others and pass the revenue on to you

There are these two fellas, see? Joe and John. They both own clunker pick-up trucks that you or I wouldn't be seen dead in. Well, I might, seein's I drive an '88 Ford F-150. But I digress.

They both would really like to buy new pick-up trucks. Problem is, Joe can afford one and John can't. So, who does the gummint help buy his new truck? Why Joe, of course, the guy who could buy one without any help. He does allow, though, that he didn't mind the free $4,500 "cash for clunkers" that he got from the gummint. John, who really did need help to buy a new truck, gets to keep his clunker. You know, the one that's overheating the earth and all? The one like mine? No help for ol' John.

Does this make sense to you?. We paid Joe money that he didn't need in order to get him to buy a new truck sooner than he intended. That helps Joe (duh, free money and all), the UAW and it pays back some political debts. Plus, everyone in the picture where Joe gets his new keys gets to smile.

On the other hand, that's John over there, shaking his head and wondering " I work and pay taxes too. Why is the gummint giving my tax money to Joe so that he can buy a truck that I can't afford when I'm the one who needs the help?"

That's the conundrum: Why are we giving money to people who don't need it? Why are we pushing Joe into further consumer debt as a matter of national policy? Consumerism and mass consumption are NOT good for Joe or John or for you. The administrations sells cash-for-clunkers as one way to reduce our national dependence on foreign oil. It may be, but at what cost?

The thing is, Joe was gonna buy a new truck anyway. Maybe c-f-c motivated him enough ($4,500 of enough) to buy it a little earlier than he had planned but he was gonna buy it anyway. Count one truck sold. OTOH, if we had helped John buy a truck (in the same way, say, as we're helping banks and car companies who need some help to get back on their feet) then we could count two trucks sold and two clunkers off the road, more car jobs saved, the whole shebang. For the math-challenged, two is better than one.

Unfortunately, only the "haves" get the c-f-c incentive. "Have nots"? Sorry, not you, you gotta keep driving your clunkers. "You gotta have money to get money" is a perverse modern twist. Our national divide grows. There's a better way:

Hey gummint! Don't give away our hard-earned tax dollars to incentivize consumerism. There are too many other problems on the table and this doesn't fix any of them long-term.

Let the people who can afford new trucks buy them, but don't help them buy them. Let the folks who can't buy new save their money or buy used or take public transportation (you know, those systems you told us would solve our transportation problems?) or, God forbid, walk or carpool.

Count on it: The administration is selling us out to pay for its stimuli and bailouts. Did anyone NOT see this coming? I wonder how many Obama voters thought he would wind up being an auto industry shill?

"C'mon down! We got 45 hunnerd bucks an' a shiny red truck right here for ya'll, but don't wait!"

Wait. Consumer debt shifts the economic crisis to you.

The gap in our economy is between what we have and what we think we ought to have - and that is a moral problem, not an economic one. Paul Heyne

Tuesday, July 7, 2009

1st Half of 2009 - A Retrospective

We Tax All the Others and Pass the Revenue on to You

This is where I get all wispy and look at my foolishness from the past six months. First off, let's look at what I got wrong

SOOO Wrong

Chrysler will either fail in bankruptcy or succeed by renegotiating or voiding its debt and contracts, including salaries, pensions and health insurance. A judge will decide and s/he won't prefer one group of same-class creditors over another. (April 30)

This is the only one I'm admitting to, but it's a biggie. If you think there are others, comment here and I guarantee I'll post it.

Jury's Still Out

No major health care reform this year or any time soon. DOA, despite CharlieR's "by the end of 2010" promise. Ain't gonna happen, folks. No will, no money. Maybe some window dressing, that's all. (Feb. 5)

Watch For It...
The prez to bring on Bill Clinton as some sort of buck-a-year "special advisor" on budget and the economy. (March 12)

GM and Chrysler aren't ever going to repay their bailout "loans" and Fiat will go away -- just like they did in 1984 -- as soon as they have milked the American taxpayer out of his last free dollar. (March 31)

We just call 'em like we see 'em and that's how we see CK, a preening political hack-in-waiting. Waiting for, say, Uncle Teddy's seat to open up. (April 21)

Dems, you don't have a thing to worry about in 2010. The GOP has already been reduced to firing blanks on the sidelines... The GOP has nothing to offer these days. Until that changes, until a leader comes forward with an agenda that resonates with America, we're going to remain a one-party nation, Bob's party... What is troubling is the silence. Where did you go, GOP? What ideas do you have to make things better for all of us, Dems and Repubs alike? Where is your charisma, your leader, your next Contract With America? You'd better find something and someone, and quick, and it better be more than just carping about what the prez is doing. And BTW, Michael Steele ain't it. (May 1)

Just as we're going to get mileage taxes plus gas taxes to make up for better fuel economies, we'll surely hear a push to tax pot, and is it such a leap to then tax all forms of now-illegal products? (May 19)

We have squandered our descendant's fortunes and the money won't be coming back. (June 1)

Got These Right

There are going to be tax increases, no matter how much you make or who you voted for or what you believe about how much government should spend and on what. They're coming because the new administration can't be seen to back off on its promises to tax everyone but you. (Jan. 12) Hello cap and trade.

Big increases are coming for all the traditional sin taxes. If you make your living catering to any of those penchants, think about a career change. (Jan. 12)

We're spending -- call it a trillion and try not to cry -- and it's gonna take a while? How much would it take to start it working today? We're spending a tril and no one is demanding anything to show for it? Are you freakin' kidding me? No wonder some of it is going for dividends and bonuses for failure. No one is saying STOP! (Jan. 12 again. It's worth a re-read.)

TCFR raise tax revenue. Get over it. (Jan. 13)

If there is an economic crisis that requires massive amounts of public money for bailouts and stimuli, then shouldn't there be some oversight about where it's going? There hasn't been so far and no sign of that improving on Mr. Obama's watch. (Jan. 13)

But there is no such thing as a "national version" of freedom. Others may not define your freedom! That's what freedom is all about. There is only... freedom. (Jan. 20)

There is a modern reign of terror in Russia. (Jan. 21)

There's no free Mexican food. Somebody always gets stuck with the check. Can you look your kids in the eye and tell them it's going to be... them? Poor them. (Feb. 8)

We're already being set up for the failure of the stimulus bill. "It's not perfect" says the prez. Here's a thought: If you wanted it to be better, maybe someone should actually have read the freakin' bill before we spent the $800B! (Feb. 17)

One of the problems these days is that there are no responsible plans issuing from the other side of the aisle. There isn't one single viable national alternative to anything that the Obama administration is doing. (March 9)

The second stimulus is already on its way, count on it. (March 10)

Let me say this again. No significant health care reform AND energy policy reform AND economic recovery in the first two years of this administration. Whatever political capital the prez has left is going toward economic recovery. (March 12)

"The plan" calls for 8% unemployment this year. It's going to hit 10% before Christmas. (March 12)

All those new jobs? You can forget them, too. Sham. No money + no incentive to invest = no new jobs. (March 17)

I've seen this movie before. I think the prez goes to China or Russia pretty soon. (March 19... eerie, huh?)

Consumer borrowing shifts the crisis to you (March 19... and read the rest of that column, too)

This just in: There is no upside when you loan someone money to buy a bunch of someone else's bad debt. (March 23)

This just in: TimmyG and the prez don't know how to fix the auto industry. (March 31)

We will fail, all of us. That's another universal. We all will experience sorrow and frustration and pain. We'll all be scared. The measure of us all is "Then what did you do?" (April 9)

Watch for the prez to "force" GM into bankruptcy in a month. (May 1)