The AHCA: Tax Cuts Do Not Solve Problems That Require Money

By Jason Taylor

Let me tell you a little bit about what the Republicans have planned for Kansas. Kansas was the blueprint. Soon, the rich won’t pay taxes at all. Sales tax will spike, raising costs on basic necessities and hurting the poor worst of all. Schools will begin to close and teachers with experience will be laid off or quit. The remaining teachers will be fresh out of college, inexperienced with no one to guide them.

Money for roads will be taken to pay for other services and the roads will begin to fall apart. People who work for the government, already underpaid, will have a pay freeze for nearly a decade causing anyone with any real skills to find employment elsewhere. Government services will be cut and those federally required will be out of compliance to the point funds are taken and things like hospitals close. What we are seeing in Kansas is the true creation of a Banana Republic.

I have wondered for years why conservatives, the Republican Party, in particular, have such a visceral opposition to any legislation or policies designed to assist those in need. Be it food, housing, educational, workers protections, environmental safety, or health care, the Republicans can never conceive of a reason or a situation requiring Federal intervention. The law of the jungle, wolf pack rule, holds supreme.

The Republicans health care legislation should make it clear to every doubting Thomas, every fence straddling voter and hopeful onlookers, affordable and accessible health care has never been the objective. The question now is what will the American voters do in response? It took a century to enact the Affordable Care Act only to have it destroyed in favor of tax cuts for millionaires.

There is overwhelming data that single payer would save enormous amounts of money and yield better results.

All other industrialized countries have some form of universal government-run health care, mostly single payer. They get at least as good care as measured by all 16 of the bottom line public health statistics, and they do it at 40% of the cost per person. If our system were as efficient, we would save over $1.5 TRILLION each year.

Here are the per capita figures for health care costs in 2013 in PPP dollars (which take cost of living into consideration) from the OECD:

OECD average — 3463
US — 8713
UK — 3235
France — 4124
Australia (similar obesity) — 3966
Germany — 4919
Denmark — 4553
The Netherlands — 5131
Canada — 4361
Israel — 2128
Switzerland (Highly regulated private insurance) — 6325

Let’s compare some bottom line statistics between the US and the UK which has real socialized medicine.

Life expectancy at birth:
UK — 81.1
US — 78.8

Infant Mortality (Deaths per 1,000):
UK — 3.8
US — 6.0

Maternal Mortality (WHO):
UK — 9
US — 14

The World Health Organization (WHO) using a formula developed by The Harvard School of Public Health ranks the US system as 38th in the world (France & Italy are 1 & 2). This formula doesn’t include costs. Bloomberg ranked countries’ systems on efficiency which does include costs. America came out as 50th out of 55.

Why the tax cuts in the so-called Health Care bill are so pivotal to GOP strategy should be front-page, headline news. Every Representative who voted for this bill should be grilled on these tax cuts for the rich, at every town hall, during every interview, at every opportunity. Only the tax cuts explain the willing deception: the callous disregard for the disadvantaged and the sick, and the baseless, even fraudulent claims that “letting the states decide” will result in better health care at lower cost.

One of the underlying myths pushed by the Freedom Caucus and its ilk is that health care is an open market thing: You just shop around. Just like buying tires.

Let’s see if we can understand why tax cuts for the Rich or more generally, income and wealth inequality, are bad for the economy. Economists have a concept called the velocity of money. It is the frequency, how often, that money changes hands in domestic commerce.

Here’s an example. Suppose the government gives Scrooge McDuck a Billion for advice on the comic book market, If Scrooge puts the bucks in his basement, and forgets about it, that doesn’t help the economy at all. That Billion has a velocity of 0. Also, if Scrooge loses a financial bet to Daddy Warbucks, and the Billion moves from Scrooge’s basement to Daddy’s, that is a change, but the velocity does not change because it is not a useful change. It doesn’t affect commerce.

Money going to the Rich has a lower velocity than money going to the non-rich. The Rich spend a lower percentage of their money. What’s a guy or gal who already has so many houses he can’t remember how many & an elevator for his horse gonna spend his money on? The answer is he is going to use it to speculate. There is a correlation between inequality and financial speculation. Speculation is bad for the economy. That money has a very low velocity. AND it increases risk which we have seen in 2008 ain’t a good thing.

I would dispute that a single-payer system would require a substantial tax increase, or at least contend that any tax increase would be more than offset by not having to buy the terrible profit-laden private health insurance we are stuck paying for. Further, if the payment for the Medicare for all scheme was income based everyone could be covered for a flat fee, say 5% of income matched by employers which — while I haven’t done the math — could well cover it. With everyone contributing all the silly issues of pre-existing, annual caps, high deductibles, etc. go away — as they have in every other developed country where everyone is covered and everyone pays in.

I am bored by the fear mongering of a Single Payer or Medicare-for-All system being a bad thing because of the higher taxes required to fund it. When the current system of both employers and employees paying ever-increasing premiums, both pre- and post-ACA, (and administration fees) into a for-profit system is gone…that money will all but cover those higher income taxes needed to run the system. Without the profiteering middlemen.

It will not be simple..but it is, actually, that simple.

The GOP not only hate the idea of any kind of national program, but they are especially galled that the only way to cover the federal subsidy is by taxing the wealthy. A closer look at all of Trump’s programs shows the same pattern. Cut taxes for the very wealthy and shift the costs to the working people. If individuals can’t cover their costs, tough luck, you get what you can pay for. Just as his tax plan left everyone making less than $75,000 a year unchanged, he’s put the increases in insurance premiums on their backs as well. Trump is a billionaire president who talks a good game but in the end is there to serve the interests of his fellow billionaires.

A wealthy European from a country with good social services was quoted as saying,” I don’t want my neighbors to be sick, uneducated or destitute.” Sadly few Republicans subscribe to this wisdom. Someday they may learn that their gated communities won’t protect them forever.

If Americans can’t get over the fact that the only solution to our healthcare woes is a single-payer type system like the rest of the free world, you might be receiving that Trumpcare card sooner, rather than later.



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