“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.” – The U.S. Constitution, Article 1, Section 8, Clause 1
Health in a Handbasket
Since the conception of the General Welfare Clause, its meaning has been extracted hither and yon, broadening germaneness between the intent of the language and the laws passed by Congress. Rules and regulations have often been passed out of legislative boredom, and when a crisis comes along, in the parlance of White House Chief of Staff Rahm Emanuel, you don’t want to waste it.
The most prescient threat of impending proliferation of General Welfare into public policy is the expansion of state-governed health care, with a so-called “public option” for health insurance. Similar to the effects of over-spending with our record-breaking stimulus package, which the Congressional Budget Office predicted would “crowd out private investment, thus reducing the stock of private capital and the long-term potential output of the economy,” a public option would eventually crowd out private health insurance, leaving government holding the bag, in an “only government can save us” scenario that statists drool for.
But don’t take my word for it. A representative of the Lewin Group, a reputable research organization, testified before Congress in April 2009, saying: “President Obama and Senator Baucus have proposed to create an ‘exchange’ offering individuals and employers a selection of health plans. They also propose to create a new ‘public plan’ that would compete for enrollment with private insurance plans in the exchange. Premiums under the public plan would be up to 30 percent less than private insurance plans if Medicare payment levels are used. Due to this substantial cost advantage, we estimate that up to 119.1 million of the 171.6 million people who now have private employer or non-group coverage would move to the public plan (70 percent).”
So while overall costs will drop, 70 percent of those with private health insurance would defer to the public option. In an effort to “compete” with private industry, government, the only entity with the capabilities to run a deficit and print more money to make up for it, comprises an unfair competitor within private industry. So when private companies buckle, the public plan would be all that’s left.
This strategy is consistent with our President’s ideology, who in May of 2007, said, “If you’re starting from scratch, then a single-payer system would probably make sense. But we’ve got all these legacy systems in place, and managing the transition, as well as adjusting the culture to a different system, would be difficult to pull off. So we may need a system that’s not so disruptive that people feel like suddenly what they’ve known for most of their lives is thrown by the wayside.”
For those of you that don’t know, single payer refers to a government-managed system that disconnects health insurance from employment, with government paying hospitals and insurance companies by withholding income. With encouragement from the left, and given the President’s popularity, why not push for a single payer health care system? Well, it’s not guaranteed to pass. What will work for this Administration is a slow bleed, away from the private sector, into a “government-monitored” system, and eventually, a government-run system. The Greeks had the same idea with their Trojan Horse.
“Health care costs are the key to our fiscal future,” penned Peter Orszag, director of the White House’s Office of Management and Budget in the Wall Street Journal on the Ides of May. “We need to undertake comprehensive health-care reform, and the president is committed to getting that done this year. Once we do, we will put the nation on a sustainable fiscal path and build a new foundation for our economy for generations to come.” Nevermind the economic drivers of venture capitalism in the private sector; nevermind the entrepreneurial spirit that made this country great. Health care - a service, mind you - is considered not a key, but the key to our fiscal future by the clowns behind the curtain. By ignoring basic supply-and-demand, Mr. Orszag brings discredit to the designator of “economist.”
I consider this fight to be a bellwether for capitalism and the Republican Party, who should stand up and be proud ”Oppositionists,” as the left calls them. If they tarry, the largest entitlement program in the history of this country will be created, as the Administration will use this ‘crisis’ as justification, employing Lenin’s philosophy: “Those who believe that socialism will be built at a time of peace and tranquility are profoundly mistaken: it will everywhere be built at a time of disruption, at a time of famine.” As of now, though, the GOP is asleep and our health care freedom is at stake.
Capital Quelling
On April 2, 2009, Representative Sandy Levin of Michigan (Senator Carl Levin’s older brother) introduced H.R. 1935, a bill to further squash the private sector by raising the carried interest tax rate from 15 to (around) 35 percent and the capital gains tax rate from 15 to 20 percent, a move aligned with recent White House rhetoric. What does this mean for you? Well, the latter increase is obvious; as an investor, you pay 5 percent more in taxes on your investments. The tax increase on income gained as carried interest through “investment management services” is the stickier part.
Firms that manage private equity and investments usually make 20 percent in profit for their work, and recipients of carried interest are taxed at the 15 percent rate, instead of the normal income tax rate, which is near 35 percent for the top income earners. This loophole keeps investment firms from paying high corporate tax rates (the second highest in the world, actually) and created the now-famous situation in which Warren Buffett was paying a 17.7% tax rate on his income, while his staff was paying a 32.9% rate, validating a row of “eat the rich” talk from leftists. The Administration projects that a tax increase on carried interest would raise more than $23 billion over 10 years.
That’s assuming sustained growth in the financial sector. Many private equity firms take risks with that aforementioned entrepreneurial spirit through the buying, selling, and consolidation of smaller businesses. A larger tax levied against them hurts everyone associated with these kind of investments, not just the firms handling them.
Who is affected by the financial sector, though? Only – oh, wait - as we are now discovering, everybody. In an effort to punish the wealthy, everybody suffers. Taxing start-ups and investment firms has the same affect as taxing Big Oil: with oil, the tax is simply passed on to its consumers; with carried interest, the tax will be passed on to the investors. Whereas oil is currently the lifeblood of American infrastructure, the financial sector is the lifeblood of the American economy.
The White House and Congress also have judicial precedence on their side to tax at leisure, with the support of the Sixteenth Amendment and its associated court rulings. Why do I care so much? Maybe because nobody else seems to care at all. Although it will garner attention in the coming weeks, it will still pass, marking a victory for antagonists of class warfare; namely, the Marxists.
Congratulations, socialists! You earned it! Here, I stand with Sir Winston Churchill who said, “The substance of the eminent Socialist gentlemen’s speech is that making a profit is a sin. It is my belief that the real sin is taking a loss!” I can’t see the socialists’ side, and they probably can’t see mine. As Phelps Adams said, “Capitalism and communism stand at opposite poles. Their essential difference is this: The communist, seeing the rich man and his fine home, says: ‘No man should have so much.’ The capitalist, seeing the same thing, says: ’All men should have as much.’ ”
Canis Familiaris
Finally, I wanted to address something on a quasi-personal note. Last week, Brigadier General Michael Walsh was testifying at a Senate hearing on the condition of the levees in New Orleans, and was consistently addressing Senator Barbara Boxer of California as “Ma’am,” in accordance with military protocol.
Mrs. Boxer found it offensive enough to stop him, saying, “Could you say ’senator’ instead of ‘ma’am? It’s just a thing. I worked so hard to get that title. I’d appreciate it.” After which, being scolded, Gen. Walsh replied, “Yes, senator.”
Now I could address the brazen ”cattiness,” - closer to that of a “female dog” - of Mrs. Boxer’s statement, which aligned her with her namesake, but instead want to tackle her statement, “I worked so hard to get that title.” This in itself rubbed me the wrong way, for I found this contrary to the point of American politics and the idea of citizen representation. A populace should back an individual for public office because they want him or her to represent their ideas and beliefs, not because they worked “so hard” for that title. It reeks of ambition, an unsatisfied hunger, and the sleight of hand necessary to gain a title that requires you to work “so hard.”
The situation helps to articulate the decline of meritocracy in governance. Thomas Jefferson believed a “natural aristocracy” would ascend into power, based on their merits, to look after the common good, or “General Welfare,” of the American people. Although we expect some glad-handing, and yes, some sliminess from our politicians, they should, in my opinion, be essentially drafted into office. If you have to work “so hard” selling yourself to “get that title,” frankly, ma’am, you don’t deserve it. Based on her Californian constituency, however, with her 2010 reelection campaign around the corner, there’s little hope of stopping her.
