Archive for November, 2010

Bad, bad, US Health Care

30 Nov

Proving the recent studies that say Cuba and other countries have better health care than the US, another international leader, the Saudi King, has traveled internationally for health care.

To Cuba? To the UK? France? Canada? Netherlands?

No. To the United States.

The problems with health care isn’t the treatment – we’ve got the best treatment in the world. Otherwise, perhaps the Saudi King, Canadian officials, and others, would perhaps stay in their own countries or head to Cuba.

The problems have been cost and an entitlement attitude of a large group of citizens.

Cost is high because of a few factors:

  • Cost of compliance with government regulation.
  • Cost of excess treatment to attempt to prevent frivolous lawsuits from being filed.
  • Cost of malpractice insurance and/or legal expenses to fight frivolous lawsuits that have been filed and which benefit trial lawyers (aka Democrat congressmen) more than anyone.

The entitlement attitude is not just among those on government healthcare. If the middle class didn’t feel entitled, we wouldn’t all be in so much debt, having “bought” things we cannot afford. What many Americans expect:

  • Someone else should pay for the health consequences of my behavior.
  • Someone else should pay for the elective treatments I receive.
  • Someone else should take financial care of my family and parents.
  • I deserve to keep the money I make for my work. Doctors that provide treatment and insurance employees that ensure it’s as affordable as possible do not deserve to be paid for their work.

The Obama-Pelosi-Reid health plan does a few things to ensure all the problems get worse:

  • Dramatic increases in government regulation are raising the cost of health care.
  • Purposeful ignorance of the frivolous lawsuits has empowered trial lawyers (Democrat congressmen) to continue to file even more frivolous lawsuits which is raising the cost of health care.
  • Adults up to 26 years old have been told that legally they are not needing to be responsible for their own health care.
  • Everyone has been told that pre-existing conditions, often the result of behavioral choices are not their responsibility and someone else will pay for them.

The costs continue to rise, and the entitlement attitude is being encouraged.

The Obama-Pelosi-Reid health care plan has successfully made the two main aspects of the problem worse.


Politically Correct Starbucks? [photo]

16 Nov


I thought Starbucks was more politically correct, but they are now encouraging the consumption of Polar Bears.


Why a Fair Tax Would Be Better.

01 Nov

This is the second of a 3 part series on taxes.

1. Flat Tax

2. Fair Tax

3. Basic Economics and the Laffer Curve

Here in Colorado, appointed-never-elected Democrat Senator Michael Bennet launched a deceptive attack ad on his opponent, Ken Buck, claiming he wants a 23%  tax hike.  Here’s the ad:

YouTube Preview Image

Other Democrats around the country are attacking conservatives for the same thing.

And really, who would want a 23% sales tax?

To answer the question, we have to clarify what we’re talking about.  The conservatives talk about two types of tax alternatives. A Flat Tax and a Fair Tax. I wrote about the Flat Tax previously. The sales tax is called the “Fair Tax.”

The basic idea is this: Instead of penalizing earning money (income tax), saving money (interest tax), investing money (capital gains tax), and passing money on (death tax), we just collect taxes when money is spent.

Some liberal Democrats have suggested adding a federal sales tax in addition to income taxes. Some Conservatives are in favor of the sales tax, but instead of income taxes. This would likely require an amendment to the constitution.

The Math: Tax inclusive or exclusive?
The math on this is a bit tricky. We speak of income tax in tax-inclusive terms. A 23% tax means that 23% of your money goes to the taxes : out of $100 total, $23 is paid in taxes, 23/100 is 23%. We use different, tax-exclusive, terminology with sales tax. If a purchase total is $77, and the tax is 23%, we’d normally say it’s a 30% sales tax, as 23 (taxes)/77 (purchase amount) = 29.8% tax-exclusive.

This causes some confusion because the 23% tax could also be called a 30% tax when calculating it differently.

The Math: Why is 23% the magic number?
23% sales tax would be collected in place of income tax, Medicare tax, self-employment taxes, and corporate taxes.  This would pay for:

  • replacing the revenue the government currently makes with the current system.
  • sending prebate checks for low-income Americans
  • a few percent to pay retailers and local governments for collecting the sales tax.

23% Seems really high, even as an income tax. However, our current system taxes us more than just our tax bracket. Most people fall in the 15% income tax bracket, everyone has 7.65% taxed in payroll taxes, and the employer has to pay an additional 7.65%. That’s already more than 23%.

What’s a prebate?
The fair tax prebate  is a check mailed to poorer Americans at the beginning of every month to pre-emptively pay the sales tax for them.

What’s the benefit?
Suddenly everyone’s income would jump up without having to get a raise. Businesses would no longer have to pad their prices to pass corporate taxes on to consumers so every product becomes cheaper. Only new products are taxed, not used items, so anyone shopping at a thrift store for clothes just gets cheaper clothes.

Your life savings is no longer taxed, so everyone’s retirement funds are more valuable. The IRS would be able to be dramatically downsized because retailers and states would receive a portion of the tax revenue as payment for their collecting it. There would be no tax filing every spring.

The “fair tax” sales tax, like the flat tax, removes the system of loop-holes and allows everyone to pay a lower tax rate instead of just the poor and the super-wealthy. Both would stimulate the economy. Both would remove government financially rewarding and punishing Americans for behavior politicians favor or disfavor.

For more information, check out the FAQ over at the fair tax website.


Posted in Politics