(Original Post)

The Virginian-Pilot(Norfolk, VA.)

September 24, 2009 Thursday
The Virginian-Pilot Edition

Why keep playing Reagan's game?

LOCAL; Pg. B7

By JOHN YOUNG

SCANNING THE ranks of the noble Tea Party protesters -- exiles of conscience, taxed into penury without representation -- it's hard to ignore one impression:

For oppressed people, they must have had their attentions distracted throughout the Bush administration.

They certainly weren't protesting when a Republican administration and Republican Congress drove up the deficit without a care in the world.

Granted, that regime had a care: "global war on terrorism," it was. But the deficit? No.

Now, by George, the Tea Partiers are right. Regardless of ideology, anybody should be concerned -- OK, alarmed to the point of hair loss -- by the deficits facing this nation.

And so we ponder the number $900 billion.

That's the rough cost of the principal health-coverage bills in Congress. President Barack Obama and Democrats have said they will find a way to make the initiative deficit-neutral, largely through cuts in Medicare and new fees on insurance companies that offer so-called Cadillac health plans.

Whether an income tax hike for the wealthiest Americans is in the mix seems clearly in doubt after Obama's speech to Congress. That's unfortunate.

It should be in the mix -- just as the tinkerers press on with the very cuts and economies the system needs.

Simply, tax hikes should be pressed. The biggest reason we are in our current hole is tax cuts without any means of mitigating the fiscal crevice created for pure political expediency.

Citizens for Tax Justice points out that the cost of the Bush tax cuts was more than 2½ times the cost of the health reforms Obama proposes. The loss of $2.1 trillion over 10 years from the Bush tax cuts includes $379 billion in interest on the national debt.

And while Obama seeks to help working Americans without insurance, the Bush tax cuts saw 52.5 percent of the benefits go to the top 5 percent of taxpayers.

For this price tag, we got ... a killer recession.

We didn't use the money to improve our infrastructure. We didn't use it to match federalized "accountability" hyperbole for K-12 education. We didn't treat a college education like the investment of a nation on the move. Instead we found more ways to stick college students with crippling debt.

It's time to address the cost dimensions necessary for health care reform and to raise the money needed to pay for what we need.

This nation has missed many opportunities to raise revenue to pay off its debts. The biggest missed opportunity was when, under Ronald Reagan's urging, Congress streamlined the income tax. It resulted in a better system with fewer loopholes.

So, what did we do with the money that a better system could raise to wipe out burgeoning Reagan-era deficits? Nothing. The Gipper demanded a "revenue-neutral" plan.

Since then, except for a brief moment during the Clinton years, we have refrained from raising income taxes, trying to find arcane means of paying for what we need -- like user fees, stealing from trust funds, and, of course, borrowing from the Chinese.

We built a sleek, progressive revenue superhighway, then placed orange cones at its ramps to keep traffic off it.

Invest in what it takes so that Americans aren't taking hangnails and migraines to emergency rooms? "Outrageous," say the Tea Partiers.

What were they saying when we were spending billions on the hospitals and general infrastructures of Iraq and Afghanistan without any means of paying for it?

By the way, the cost of those wars combined has reached an oddly familiar figure -- $900 billion. That sum, advises costofwar.com, would pay the salaries of nearly 15 million elementary school teachers for one year.

Or, based on what Congress is saying, it could make sure that no American goes without health insurance.

John Young writes for Cox Newspapers. E-mail him at jyoungcolumn@gmail.com

(Original Post)

Slate Magazine

September 22, 2009 Tuesday

Write Your Own Health Reform Bill!

by Timothy Noah and Chris Wilson

The health reform bill (text, summary) introduced last week by Sen. Max Baucus, D- Mont., chairman of the Senate finance committee, is kind of a dog. The product of many months of negotiation among a bipartisan seven-member "coalition of the willing" (reduced to six after the defection of Sen. Orrin Hatch, R-Utah), it includes so many concessions to the GOP that at least three Democrats (Sen. Jay Rockefeller of West Virginia, Sen. Ron Wyden of Oregon, and Sen. Maria Cantwell of Washington) are threatening not to vote for it. Yet the bill has not won the support of a single Republican.

Even so, Congressional Budget Office Director Douglas Elmendorf speaks well of the Baucus bill (blog, report). So does Ronald Brownstein at the Atlantic. They like it because it's projected to reduce Medicare spending more drastically than the other versions of the bill passed by three House committees and the Senate's health committee. But Princeton economist Uwe Reinhardt speaks ill of it. He dislikes the bill because it does a terrible job of curbing private sector health costs. Indeed, Reinhardt argues, private-insurance premiums may rise so fast after the bill's passage that it could provoke a populist revolt.

Not Elmendorf nor Brownstein nor Reinhardt has a vote on the Senate finance committee. Can the Baucus bill be fixed by those who do? That's the assumption behind 564 amendments to be offered as the committee takes up health reform this week.

The amendments are all described on the Senate finance committee's Web site. Unfortunately, they're scattered among six PDF files, and navigating them is a nightmare. Slate's Chris Wilson, who sees opportunity where others see an ungainly data dump, assembled all these amendments into a single spreadsheet that can be sorted according to sponsor, party, budgetary offset, and whether the amendment in question addresses insurance coverage, reform of "delivery systems" (i.e., doctors and hospitals), or financing (taxes). (Some readers may need to log in to Gmail to view the sortable version. A low-fi version is available here.)

Here are three problems I would especially like the committee to fix:

Stingy premium subsidies. Like the other health reform bills, the Baucus bill contains an "individual mandate" requiring virtually all Americans to obtain health insurance or pay a tax penalty. All four bills extend government subsidies to low- and moderate-income purchasers. But according to the nonprofit Center on Budget and Policy Priorities, low- and moderate-income people would pay three times as much under the Baucus bill as they would under the House bill (text, summary) and nearly five times as much as under the Senate health committee bill (text, summary). A family of three earning $46,000 per year would have to spend $4,800, or more than 10 percent of its income. And that's just for premiums; if a family member actually used this insurance to go to the doctor, there would be additional expenses such as co-payments and deductibles.

Wyden will introduce an amendment (249) that would increase subsidies for those earning between 200 percent and 400 percent of the poverty level. Wyden would pay for the added subsidies with a sin tax on Internet gambling. Sens. John Kerry, D-Mass.; Jeff Bingaman, D-N.M.; and Chuck Schumer, D-N.Y., have a slightly different amendment (300) to increase the subsidy that's also worth considering. It would be paid for with a tax on health insurers. Baucus has signaled he will support some sort of increase in subsidies.

"Free rider" tax. Another problem with Baucus' bill is the way it taxes businesses to pay for health insurance. I sympathize with Baucus' desire not to rely too heavily on an employer tax to pay for health reform-better to get employers out of the health-insurance business altogether. Baucus' substitute for a straight-up "pay or play" requirement is for employers to make the federal government whole for the (relatively meager) subsidies it provides to low- and moderate-income employees who purchase private health insurance in newly created health-insurance exchanges. But as the Center on Budget and Policy Priorities points out, this creates a strong disincentive for employers to hire low- and moderate-income employees, especially if they have families.

Citizens for Tax Justice, a labor-affiliated nonprofit, has recommended a variety of alternative means to pay for health reform and points out that President George W. Bush's tax cuts cost two-and-a-half times as much as the supposedly spendthrift House health reform bill.

Kerry and Schumer propose an amendment (226) to eliminate the free-rider tax and replace it with a "pay or play" tax. Cantwell has an amendment (295) that would let employers reduce their "free rider" tax to whatever extent they contribute to a medical account for the employee in question. I don't see how that would make much of a practical difference from the employer's point of view. Sen. John Cornyn, R.-Texas, has an amendment that would require the secretary of labor to certify that a "free rider" tax won't result in lower wages or higher employment. This seems mainly an attempt to embarrass the Obama administration. Cornyn has no offset for this but says he'll bring one to markup. My guess is that his offset is "Don't pass this bill."

No public option. The biggest problem with Baucus' bill is that it lacks a "public option," a government-created health insurance program that would compete with private health plans in the health exchanges, thereby exerting downward pressure on private-sector premiums (and more broadly provide a safe harbor should the bill's new regulations fail to end chicanery by private insurers). Instead, the Baucus bill creates nonprofit health cooperatives to do the same thing.

These are a poor substitute, Sen. Rockefeller argues in a Sept. 16 letter to Baucus. Rockefeller points out that in the United States, health co-ops are "a dying business model," having enjoyed a brief vogue during the early 20th century and subsequently dwindled in number to somewhere between five and seven. They "function just like private health insurance companies," Rockefeller continues, and therefore wouldn't likely create much in the way of price competition for private for-profit insurers.

Schumer and Cantwell have an amendment (261) to create the same public option described in the Senate health committee bill. Rockefeller has a slightly different public-option amendment (187). I'd be delighted to see either one pass.

I have some other problems with Baucus' bill, but these three are the most important. You don't like my bill as amended? Consult Wilson'sspreadsheet and amend it yourself.

E-mail Timothy Noah at chatterbox@slate.com

(Original Post)

The Sunday Oregonian (Portland, Oregon)

September 20, 2009 Sunday
Sunrise Edition

TAXING THE RICH It's not class warfare, it's just common sense

NEAL PEIRCE

In a dramatic break from tax trends of recent decades, eight states have voted this year to push up the percentages of income that their wealthiest citizens must pay.

Connecticut is the latest to take this step, following Delaware, Hawaii, New Jersey, New York, North Carolina, Oregon and Wisconsin, according to a Stateline roundup.

What's going on here? Are these moves simply desperate, last-minute attempts to balance budgets that have been hit deeply by the recession? Since virtually all the increases have been muscled through by Democratic legislative majorities, are they just partisan maneuvers?

Or do tax boosts for the richest among us signal a tidal shift?

There's no question that the Wall Street meltdown cut the ground out from under the argument that the wealthy are so much wiser and ingenious that we should touch their earnings lightly or else risk killing off the sacred cow of capitalist growth.

AIG-sized bonuses, ridiculously overpaid corporate executives, careers of financial "wizards" built on moving money around with zero net gain for the economy --all have cut away at "don't overtax the rich" theories. The shift is underscored by a recognition of how many millions of jobs were destroyed by the money moguls' machinations.

But not everything has changed. America's political right wing has spent much of this year staging colorful anti-tax "tea parties" that play on Americans' legitimate fears of an expansive federal government building up fearsome levels of public debt.

And in the legislatures, Republican legislators have garnered attention by accusing the tax-raising Democrats of "class warfare." The standard warning is that taxing the wealthy more heavily will prompt them to flee to lower-tax states.

OK, class warfare may be a canard --who really believes it? But will the flight of the rich to low-tax havens be a torrent or a trickle?

"Not even a trickle," Robert McIntyre of the advocacy group Citizens for Tax Justice replied when I asked. "If you live in Malibu, would you want to move to Omaha? Rich people like climate, amenities and lots of other rich people to talk to." Increased rates, he said, would prompt precious few to move.

But what's the general picture of state taxes today? Are they fair to all income groups, all classes? Can we reasonably shake the theory we should protect the rich against higher taxes because we believe, like Joe the Plumber of the last election season, that we're all "rich people in waiting"?

The reformers have a mountain of evidence to justify a shift to more progressive tax structures. And the new climate may be ideal to hear their case.

By overwhelming margins, states tax their middle- and low-income families more heavily than the wealthy, the Institute on Taxation and Economic Policy reported in its last comprehensive national review, in 2003.

The group added together all state and local taxes that individuals pay --income, sales, property and other --to reach its conclusions. It found the best-off 1 percent of families paid taxes on just 7.3 percent of their total income, and after the federal income tax offset, just 5.2 percent.

Families in the middle 20 percent of the income spectrum paid 9.9 percent before the federal offset, 9.6 percent after --almost twice as much as the very wealthy. A major reason: so many states lack a broad-based income tax, or if they have one, set it at a flat rate.

And the 20 percent of lowest income families? They were found to pay the most of all --11.4 percent of their incomes. The prime reason: sales taxes consume such larger shares of their meager pay levels.

The disparities have continued and deepened, say observers. A highly detailed study in Minnesota, a fairly liberal state, found the top 5 percent of taxpayers there have an effective tax rate of 9.7 percent, and the less-affluent about 12 percent.

Meanwhile, in conservative Mississippi, families making $18,000 or less pay 12.1 percent of their total incomes while those making more than $224,000 pay just 5.4 percent. The Legislature this year tried to remedy the situation with a bill including reduced taxes on groceries and more on tobacco, but Republican Gov. Haley Barbour vetoed it.

A 50-state move to progressive taxes, and adequate overall levels, could serve our national future. Smoothly running state and local governments are vital in every arena from schools to universities, basic infrastructure to law enforcement --crucial factors for our quality of life and our economy.

Helping low-income families through lesser tax burdens means less poverty, more self-sufficiency, brighter futures. Against all that, the idea of asking high-income families to pay as great a share of their earnings as the rest of us isn't radical --it's just common sense.

2009, The Washington Post Writers Group

Reach Neal Peirce at nrp@citistates.com

(Original Post)

The Business Insider

September 9, 2009 Wednesday 10:21 AM EST

Reforming Healthcare Is Way Cheaper Than Bush Tax Cuts

by Lawrence Delevingne

Sep. 9, 2009 (The Business Insider delivered by Newstex) --

Where were Republican deficit-hawks when the Bush Adminstration cut taxes, costing as much as $2.5 trillion?

According to left-leaning Citizens For Tax Justice, the Bush tax cuts cost two and a half times as much as the House Democrats' health care proposal:

CTJ: Newly revised estimates from Citizens for Tax Justice show that the Bush tax cuts cost almost $2.5 trillion over the decade after they were first enacted (2001-2010). Preliminary estimates from the non-partisan Congressional Budget Office show that the House Democrats health care reform legislation is projected to cost $1 trillion over the decade after it would be enacted (2010-2019).

Conservatives, of course, argue tax cuts have a stimulative effect.

But even they seem to concede the basic math here. For example, as Huffington Post notes, the Heritage Foundation agreed with Paul Krugman's June estimate that even high estimates of the health care plan are "less than the $1.8 trillion cost of the Bush tax cuts." That's even less than the $2.5 trillion figure used by CTJ.

Here's the report:

Citizens For Tax Justice: The Bush Tax Cuts Cost Two and a Half Times as Much as the House Democrats' Healt...