Free Markets, Free People

Clint Stretch

Health Care – Speaking Of Taxes …

According to AP, there’s not much of an appetite among Democrats to raise taxes to support “health care reform”.

And, of course, given the estimates of the cost of “health care reform”, aimed at making health care “more affordable” (how do they get away with that, especially in light of our experience with Medicare and Medicaid), there’s no question that taxes must increase.

Right now the administration and Democrats are attempting to convince a skeptical public that most of that cost can be recovered in “efficiencies” government will introduce into the system. It is the oldest con game going. Anyone who has observed government operations of any scope or size knows quite well that government and its bureaucracies are not at all efficient in their operation. Medicare fraud, for instance, costs us about $60 billion a year. Somehow the same bureaucracy which has allowed this year after year will suddenly become “efficient” and stop it?

Even if that could happen, the huge expansion of the governmental piece of health care is going to require massive funding. That means raising taxes. But many Democrats are very wary of such a move, especially with the 2010 midterms looming:

Many of those newly elected Democrats are wary of voting to raise taxes, especially when they are unlikely to get any Republican support.

“If you are a first- or second-term Democrat, why on earth would you want to vote in July or August 2009 for a tax increase that the president doesn’t want to have take effect until 2011?” asked Clint Stretch, managing principal of tax policy at Deloitte Tax. “You’ve just handed your opponent an extra year to campaign that you’re a big-tax Democrat.”

There, indeed, is the nut of the opposition to such a move. That doesn’t mean that Democrats wouldn’t eventually vote to raise taxes, but they’d want to do it in 2011, not 2009. That, of course, puts them in direct opposition to Speaker Pelosi, from a safe California district, who has pledged to pass “health care reform” this year. As I’ve stated repeatedly, while Pelosi might not be the sharpest knife in the drawer (and her CIA/waterboarding debacle make the case) her political instincts are good. She realizes that there’s a very narrow window available to Democrats to pass their liberal agenda and it may close by 2010.

That shapes up into an interesting internal fight within the Democratic caucus. As I see it, “victory”, at least in the short-term, would be seeing health care put off until after the mid-terms. And, as history has told us, the longer it takes for the Congress to act on legislation like this, the less likely its passage becomes.

~McQ