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11/10/2009
Burri: The gum’mint – mucking it up just by leaving it alone
All things considered, this is one example of government spending I wouldn't mind seeing more of. A lot more.
This is the Washington Post's Ezra Klein, writing about the Stupak amendment that helped the health care “reform” bill pass the House of Representatives on Saturday by forbidding the "public option" from subsidizing abortions:
Rep. Bart Stupak's amendment did not make abortion illegal. And it did not block the federal government from subsidizing abortion. All it did was block it from subsidizing abortion for poorer women.
Stupak's amendment stated that the public option cannot provide abortion coverage, and that no insurer participating on the exchange can provide abortion coverage to anyone receiving subsidies. But as Rep. Jim Cooper points out in the interview below, the biggest federal subsidy for private insurance coverage is untouched by Stupak's amendment. It's the $250 billion the government spends each year making employer-sponsored health-care insurance tax-free.
What? The government spends money to make employer-provided health insurance tax-free?
What?
It's true, employer provided health insurance is tax free. It doesn’t count as income for tax purposes. You, the employee, don't have to pay taxes on it. Other forms of income – including non-monetary forms – are taxed.
That's what got Tom Daschle in trouble - he was given the use of a car and driver by a company for which he worked, but he didn't report its value as income, and didn't pay the taxes. Another example: I once won a small gumball machine in a drawing at the amusement park where I worked. I had to declare its value as income for tax purposes. That's the law.
At the time, for that reason, I considered the law an ass. Klein would accuse me of demanding a federal subsidy.
It’s no longer “how will the government pay for this tax cut?” Now it’s “if it's not taxed, the government is paying!” Like they have to write a check or something. If the government doesn't tax it, the government is spending on it. In Wisconsin, groceries are exempt from the sales tax. According to Klein, therefore, Wisconsin's state government is subsidizing your dinner.
Being from Baraboo - Circus City, USA - I appreciate a good contortionist act. Klein...well, he isn't bad.
Between 1980 and 1988, the top marginal income tax rate dropped from 70% to 28%. In Ezra Klein's world, that means government spending increased to make up the difference. The government had to spend more to make up for the tax revenues they weren't receiving.
Where'd they get the extra tax revenues to pay for the non-existent tax revenues? Heck if I know. It's not like President Obama and his magic stimulus were in office yet.
Lately, there's been talk that the non-taxability of health insurance might be bad policy. It might incentivize companies to over-buy; increase demand for both insurance and, thus, for health care. John McCain included greater taxation of health insurance in his campaign plan. Barack Obama savaged him for it, until he was elected. Then, well, maybe that's not such a bad idea after all.
And, heck, it might be true, I guess, although if we're going to start calling it government misfeasance when the government doesn't tax something, then we have officially gone over the edge.
But that's Klein's position and, I dare say, a relative summation of the liberal, "progressive" world view: when the government isn't sticking its fingers into something, the government is unfairly influencing that thing. They're mucking it all up just by letting it be.
Surely I'm not the only one who finds that frightening.
Lance Burri blogs regularly via his site, The TrogloPundit.
COMMENTS
More vocabulary voodoo.
A tax cut is now called "government spending". A reduction in the INCREASE of spending for a program from year to year is called a "funding cut".
Everything is not as it seems.
Washington has become so convoluted that we should all be suspect of any word coming out of the mouth of anyone who sets foot in the District of Columbia.
Methinks they all need to be "fixed".
Jeff Riedl (Tue Nov 10 08:09:30 2009)
According to Ezra Klein, everything tax free or untaxed amounts to government spending. Since virtually everybody favors a reduction in government spending (even liberals on the campaign trail subscribe to this virtuous thought), the logical next step is to tax everything. Thus, "spending reduction" becomes the grand justification for taxing everything! Woe unto us when that day arrives! Or has it already?
Ronald Zahn (Tue Nov 10 09:16:53 2009)
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