Hedgehog Party

Universal Healthcare Fallacies

We usually resist posting on any proposed spending.  The bailout debate has altered that policy for a time.  There are some elements in the bailout package that make incremental steps to implement universal healthcare.  The administration favors the idea, and it appears that sometime during his tenure, Obama will succeed in passing this legislation.

Our healthcare system is under extreme and growing cost pressure.  And there are many flaws in the system than need reform.  Many favor the idea under the mistaken belief that it will improve medical care and lower costs.  It is a cruel hoax that will have the opposite effect.  This article was linked in a post several months ago...but it is worth a rerun.

Revenge of the tax code

Chris Edwards, of the Cato Institute, has an article in today's Washington Post (here).  He rightly criticizes the "sophisticated taxpayers [who] often find loopholes that enable them to reduce or eliminate their tax liabilities."

But his solution, the flat tax, has been around for a long time.  It is no closer to being enacting than it was a generation ago.  The Hedge Tax adds two important ideas to the flat tax that should attract broader support:

• The flat tax applies just to income tax.  But the Hedge single rate tax also replaces Social Security and Medicare taxes.  So, low income workers under the Hedge Tax truly won't pay taxes, unlike today, where they pay 15.3% (employer and employee share) on practically the first dollar they earn.  Liberal voters will appreciate this. 

• The Hedge tax introduces a small asset tax for the very top asset holders.  So, high income earners who might still avoid triggering taxable income will still be subject to an asset-based tax burden, thus ensuring that they pay taxes like the rest of us.  Liberal voters will appreciate this.

The flat tax is a good idea.  The Hedge Tax proposal makes passing it possible. 

Daschle Cheese Gathering

Step back from partisanship for a moment.  The recent Daschle debacle can be quite instructive.  Regardless of the motives of the players, "soft corruption" is the inevitable result of a tax and spend regime that is unbounded by the voters.  Of course, there is also a lot of room for garden variety corruption.

The Daschle issue is not really the failure to pay taxes (corruption?).  The issue is: Why are connected politicians immediately worth millions or tens of millions when they enter the private sector?  Make no mistake, this is a bi-partisan cheesefest.  Reagan, Bush I, Clinton(s), Gore, Emanuel, Daschle, Rubin, Cheaney, etc.  This article explains it well.  They can direct or influence the direction of billions of dollars through spending bills and regulations. 

Voters have been carved into so many small special interest groups, that they cannot resist this onslaught.  Sometimes, with the help of their congressional friends and regulators, the rats back up dump trucks to haul away the subprime cheese.  Do we have to wait for our total financial destruction before we can support the Hedge Tax?