Friday, December 26, 2014

In Case You Missed It

It's always difficult to keep up with the important news of the day at this time of year.  Parties and get-togethers take us out of our normal routines.  And broadcasts are filled with stories of generosity or need for generosity or just recaps of what else happened throughout the year.  But there are a couple can't miss things that happened in the past few days that need to be in the limelight.

The first is the demise of the "Single Payer" health care system in Vermont.  This was the "Government Option" that so many Democrats--especially former Wisconsin Senator Russ Feingold--insisted was "needed" instead of the Affordable Care Act and the exchanges featuring private insurance company policies.  Advocates of "Single Payer" claim it's the only option that will ever work--as the Government will control costs and resources will be "re-distributed" to those who need them the most.

Vermont was one of the few states to buy into those arguments.  They were all set to launch their "Medicare For All" system next week--becoming the vanguard for what would surely be a national movement to centralized health care.  And then Governor Peter Shumlin had to kill the plan admitting (to the shock of NO Fiscal Conservatives) there was no way the state could afford to pay for it.  The Vermont "Single Payer" plan was going to be funded by an 11.5% payroll tax on private businesses--and a 9.5% premium tax on all private sector workers.  The Governor finally had to admit that putting those new taxes in place would have had a negative effect on the economy and likely put Vermont in a hole that could not be risked at this time. 

Meanwhile, over in France, that country will allow its so-called "Super Tax" on the wealthy to expire next week after two years in place.  The 75% income tax rate was going to be panacea for French economic woes--as it would "redistribute wealth" and ease the country's debilitating debt caused by decades of government health care and pension programs.

The only problem was the money raised by the "Super Tax" didn't come anywhere near the levels needed to actually make a difference--and it further hampered the French economy.  Not surprisingly (at least to Fiscal Conservatives), many of the high-earners simply moved to lower-tax countries.  Others chose deferred compensation plans that would underpay them for the first two years of the tax--and then feature balloon payments on the back end when the tax would likely wither and die.  And those on the outside became reluctant to invest in French companies--or come in as executives--for fear that the taxes could go even higher.

So two of the cornerstones of Liberal fiscal policy--Government-run health care and "Tax the Rich"--come crashing down in the same week around the holidays.  Think of it as a bit of cold reality during a time of fairy tales and magic.

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