Thursday, July 19, 2012

Few Pay More in Health Care Law?

That's the claim by USA Today. The opening paragraph is very revealing of an all-too-common attitude amongst journalists. Authors Kelley Kennedy and Richard Wolf write
Though the law is projected to raise more than $800 billion in taxes, fees and penalties over a decade, 40% comes from about 3.5 million households with adjusted gross incomes above $200,000. Employers, insurers and health care providers are slated to fork over much of the rest.
It is as if 3.5 million households and the multitude of entrepreneurs who will be affected do not count. This smacks of a callous disregard for one's neighbor at best or crass class warfare at worst.

The authors do cite Orin Hatch as pointing out that the specific taxes will directly impinge on 10% of those below the poverty level and quote Dave Kamp stating that 12 of the 21 taxes in ObamaCare will hit the middle class.

Here are some things, however, to consider when pondering this article:

Since when is a person less then human if they receive income of more than $200,000 a year? If a person has reaped such an income through providing a productive service in voluntary exchange, why is it okay to take their money and give it to someone else, just because they have a relatively high income? Are they not our neighbor? Are we not called to love them as ourselves as well? Are we not called to do unto them as we would have them do unto us? If so, are we then masochists? Do we secretly wish that they would take some of our income from us and give it to their friends?

Additionally, the new health care law is going negatively affect a lot more people and make them pay a lot more than people understand. In recent testimony before the U.S. House Committee on Oversight and Government Reform, John C. Goldman, Research Fellow at the Independent Institute and President and Kellye Wright Fellow in Health Care at the National Center for Policy Analysis explained that
The Patient Protection and Affordable Care Act (ACA) will radically transform the U.S. health care system. Arguably the most radical piece of legislation ever passed by Congress, the law will affect everyone with private insurance, every senior on Medicare, everyone on Medicaid. The bill will create 159 new regulatory agencies. Its first 10-year cost is close to $1 trillion. It is intentionally designed to fundamentally alter the way medicine is practiced in this country.
Indeed, even Hatch and Kamp demonstrate a lack of understanding of economics. They miss is the full economic impact of such legislation.

All increases in taxes and regulation, no matter who they directly impinge upon, result in capital consumption by reducing the ability and incentive for the taxpayers to save and invest. Lower savings and investment puts us on a trajectory to capital consumption. With less capital per person, we are less productive, so real wages will decrease generally and our citizens will be relatively impoverished. All of us will pay higher prices for fewer goods. The truth is that, in terms of social wealth, all will pay more in the brave new health care world.

1 comment:

  1. People all over the world have great healthcare yet live in countries with socialized systems. They seem to do just fine without paying anything like as much for the everyone gets covered. By demonising the alternatives fear keeps you paying more.