No Right to Life?

Open the newspaper, turn on the television, or surf the net, and you’ll find people saying the government can solve our problems and make life better.  This is the happy face of government:

Behind the happy face is an institution that is willing to strip of us of our right to self-defense, and, worse, deprive dying patients of life-saving drugs.   Who do these politicians and bureaucrats think they are?

For more on the right to life, go here, here, and here (pdf).

Health Care: Why Pols Can’t (or Won’t) Identify the Problem

Arnold Kling writes:

The biggest incentive problem in health care is the insulation from costs under comprehensive health insurance.

Yet most politicians’ idea of health care reform involves expanding insulation.  I’ve got a theory to explain why.

“Insulation” is another term for spending Other People’s Money.  Politicians are predisposed not to see spending Other People’s Money as a problem, because spending Other People’s Money is what politicians do for a living.  If politicians thought there were something wrong with it, they would be in a different line of work. 

If, by some epiphany, a politician were to realize that spending Other People’s Money is wrecking our health care sector, he would be loath to point it out.  Doing so would only encourage voters to question whether spending Other People’s Money causes problems everywhere else too.

Sneaky Sequentialism

Amid the current debate over expanding the State Children’s Health Insurance Program – as well as every other attempt to expand federal control over America’s health care sector – opponents accuse proponents of incrementally moving America toward a government-run system.  The strategy seems to be:

First, we let government programs, the tax code, and special-interest-driven regulation slowly kill private markets.  Second, we have government take over each area as it collapses: first health care for the elderly, then the poor, then the kids, then the near-elderly.  Lather, rinse, and repeat until government controls it all.

Left-wing politicians pursue this strategy because they know American voters won’t swallow socialized medicine all at once.  (Just look at what happened to the Clinton health plan.)  And they don’t speak openly about it, because they know voters are less likely to swallow SCHIP expansion if they see where it’s headed. 

That’s why it was so refreshing to read what Ezra Klein blogged while attending the YearlyKos convention last weekend:

At the health care panel, Kathleen Stoll, from Families USA, says, “some of you may think of me as an incrementalist. I prefer to think of myself as a sneaky sequentialist.”

I think I prefer the term “sneaky sequentialism” too.  “Incrementalism” doesn’t necessarily suggest an ultimate destination.  “Sequentialism” suggests there is a destination, and a mind consciously devising a plan to get us there.

In an upcoming briefing paper on SCHIP, I note how that program fits the Left’s sequentialist strategy, and identify Families USA among the “Baptists” who seek to expand SCHIP because that would move us toward total government control of the health care sector.

Pandering to the Protectionists

Given the audience, one could have expected a goodly amount of protectionist rhetoric from the Democratic presidential candidates in their debate last night at an AFL-CIO forum. But at times it seemed as though they were battling to see who among them could pander the most.

Dennis Kucinich has never been a promoter of open trade and markets, so it is hardly surprising that he said withdrawing from NAFTA and the WTO would be a “first week in office” priority. Thank goodness he’s not a serious candidate. What is worrisome is the cheers his pledge elicited. Do the members of the AFL-CIO truly believe that if two of our largest trade partners (Canada and Mexico) increased their tariffs on American goods, that would somehow benefit them? Is the WTO seen as such a negative force overall that withdrawing from its forums and its legal protections is perceived as wise?

The other candidates, to their credit, did not match Mr Kucinich’s pledge. But that is to damn them with faint praise, however, as most of them did undertake to “revise” trade agreements, including NAFTA, (presumably by putting in more stringent rules on labor and environmental provisions) and to put more emphasis on enforcement of trade agreements. None of them, not even Senator Clinton, whose husband showed a commendable commitment to trade during his time in office, stood up and defended the benefits of trade.

Senator Obama, given the chance to acknowledge the positive effect of trade on working families – i.e., cheap goods – demurred, making an emotive, if economically illiterate, point about how a cheap T-shirt is useless if one doesn’t have a job. As though the U.S. economy was not demonstrating that consumers can have access to cheaper goods as well as record employment.

Perhaps the next Democratic presidential candidates debate should be held at a consumer- or taxpayer-group forum.

Sub-Optimal Tax Cuts in France

Supporters of limited government often say that there is no such thing as a bad tax cut, but it also is true that some tax cuts are better than others (for instance, see here for a comparison of the sub-par 2001 tax cuts and the supply-side 2003 rate reductions). If policy makers want to boost economic performance, they should concentrate on reducing marginal tax rates on additional economic activity. By this standard, the tax cuts advocated by the new French President generally are not well designed. He is seeking to cap the total income tax burden at 50 percent rather than 60 percent, but this change affects the total tax bill and may not have much impact on the decision to engage in additional productive behavior. A better approach would be to lower the top tax rate. Likewise, Sarkozy wants to increase wealth tax exemptions, but this approach is inferior to a rate reduction (or, better yet, repeal of the tax). He also has a gimmicky plan for tax cuts on overtime and a scheme for mortgage payments. The good news is that there will be tax cuts in France. The bad news is that they could have been better designed. Tax-news.com reports

Chief among Sarkozy’s reforms are measures creating more exemptions to France’s wealth tax, which has often been cited as a key reason why France lags behind its competitors in terms of investment and economic growth, and a 50% cap on individual income tax, down from 60%. The reforms would also cut tax on overtime - encouraging more French workers to work beyond the previously politically sacred 35 hour week, part of plans to make the domestic labour market more flexible and business-friendly - and tax cuts on mortgage interest payments. …It is hoped that Sarkozy’s tax and economic reforms will tempt back the hundreds of thousands of French citizens who have left the country seeking less punitive tax regimes. Popular destinations for the estimated 500,000 French tax exiles include Belgium, Switzerland, the UK and the US. …studies show that it is not just the rich and famous who have seemingly grown weary with France’s high taxes, with families and investors fleeing in increasing numbers. Research by French Senator Philippe Marini, cited by Bloomberg, claims that households fleeing the fortune tax have climbed to a record 649 in 2005 from 370 in 1997. Another study by the Economic Analysis Council concluded that approximately 10,000 business directors have fled France in the past 15 years, taking as much as US$137 billion in capital to invest elsewhere.

A Curious Statement from Gov. Romney

I’ve been at a conference in Hawaii for a few days, so I don’t know if anyone called Mitt Romney to the mat for this extraordinary statement he made during the most recent GOP presidential candidates’ debate (quoth The New York Times):

But Mr. Romney took aim at Mr. Giuliani’s recent proposal to offer people $15,000 in tax deductions to help them buy health insurance. “We have to have our citizens insured, and we’re not going to do that by tax exemptions, because the people that don’t have insurance aren’t paying taxes,” he said.

I think Romney is wrong when he says, “We have to have our citizens insured.”  But at least that point is debatable.

Did Romney actually say, “we’re not going to do that by tax exemptions”?  Are you kidding me?  Not only does Romney’s own Massachusetts health plan use tax breaks to expand health coverage – that’s all it uses.  That law requires employers to offer a type of health plan (a Section 125 “cafeteria plan”) that extends the federal tax exclusion for employer-sponsored health insurance to the “employee portion” of the premiums.  The whole point of the “Connector” is to extend that exclusion to health plans your employer doesn’t offer, and to make sure workers don’t lose the exclusion when they change jobs.  Even the controversial requirement that all residents purchase coverage is an attempt to use a tax break to expand coverage.  If you buy coverage, you get the personal exemption from the Commonwealth’s income tax.  If you don’t buy coverage, no exemption for you.

And what’s this about the uninsured not paying taxes?  The Census Bureau reports that 17 million of the people it counts as uninsured had household incomes over $50,000 per year.  The Tax Foundation suggests that over half of the uninsured pay either income or payroll taxes, meaning that Romney is not even half-right.

(If Romney wants universal coverage, and tax breaks won’t accomplish that, how’s he gonna do it?  More government spending?)