Monday, March 29, 2010

President Obama as Robin Hood: Is this a good or a bad image?

I try really hard not to get political here in the cottage, but such momentous things are happening in our nation, that I feel I cannot let it go by without any comment at all.  The "unprecedented" (on of the President's favorite words) health care legislation that passed the Senate last week is going to significantly impact life for everyone in this country, for good or bad, for many generations to come.

Fox News has been consistent in decrying the legislation, pointing out the huge gap between the promised benefits and the funding, the suspicious back-room deals and the false promises, more of which come to light each day.  (For example, that children with pre-existing conditions would be guaranteed coverage, which they are not.) (click highlighted green text for links)

Liberal outlets, such as the New York Times, are actually praising the bill as a way of redistributing wealth in America, something they feel is long overdue and correctly the role of the federal government.

Is it?  Really?  Is the equal distribution of wealth part of the American philosoply?  I don't think so.  Do you?

Even if we could guarantee everyone health care and (by extension) a fair share of the wealth at the outset, there is little doubt that the legislation is underfunded and will, by nature of the system it is creating, grow very quickly beyond its projected scope.  The constant bickering about people losing their current coverage is ridiculous.  Supporters (including the President) repeat over and over that you can keep your current coverage if you have it.  Yes, that is true, opponents say, but only until your employer figures out that it's cheaper for him to drop your coverage and pay into the government plan, in which case you will have no choice but to accept so-called "Obama Care."  Anyone who pretends not to see this, is lying.

You're going to get charged no matter what.  If you have good health care coverage already, you will have to pay a tax to the government for the value of your plan.  If you don't have health care, you will have to pay a tax as a penalty, to help cover the cost of your free emergency care.  Either way, you pay.  Even union members, after a temporary grace period.

Personally, I don't think the federal government has any business getting involved in half the stuff it does, especially health care.  I believe that the powers of the federal government are pretty clearly outlined in the constitution:  to coin money, run the post office, maintain roads, to maintain the military and defend the country in time of war, to uphold the laws of the land (via the Supreme Court), etc.  Read it here.

I know that the "commerce clause" is used to justify all sorts of things, and that there is social inequality in the land.  But the statement "All men are created equal" doesn't mean that we are guaranteed to always possess equal amounts of wealth.  On the contrary, Jesus told us "the poor will always be with you," implying that charity on a personal level (not a government level) is a mandate for all Christians.  The fact that all men are created equal means that we are due equal protection under the law, not under the dollar.

Many of my friends - both Christian and non-Christian - feel that this legislation is necessary on moral grounds.  While I understand and sympathize with their arguments, I disagree with the underlying assumption.  I absolutely, positively believe that everyone should have access to health care.  I know that there are some tragic holes in the current system.  I want those holes to be fixed... but not this way.

I believe it is morally wrong to place a burden upon the citizens of this country, both those living now and those living generations from now, that we cannot possibly pay for.  There is no doubt that many new taxes will have to be levied to pay for it, and in the midst of this recession that will only make a very bad situation even worse.  The worst is the national VAT (value-added tax), which we cannot avoid now.  My fear is that we will end up like Denmark, which has a 25% VAT, or Great Britain, which has a 19% VAT tax and 50% income tax.

Think about it... right now middle-class Americans pay around 5-10% income tax to the federal government, after all of your deductions for mortgage interest, charitable giving, dependent children, etc.  In NJ, we pay 7% sales tax.  Can you imagine if your federal income taxes were, say, 25% of your income?  So, if you earned $800 a week, $200 went right to the federal government?  Then you would have to pay whatever your state and local income taxes are on top of that. Then you go to buy a cup of coffee, which costs $1 at McDonald's, and are required to pay a 10% VAT tax on top of your 7% state sales tax.  So the dollar cup of coffee now costs $1.17.

So you stop buying coffee at McDonald's because you can't afford it, along with millions of other people.  McDonald's profits go down, which means that your retirement and other investments, which include McDonald's stock, also go down.  McDonald's has to raise the price of the coffee to compensate, which hurts them even more and they start laying people off.  Those people go on unemployment and the new federal health care plan, which means the government needs more money to take care of them, so they raise the VAT tax to 12% and increase the income tax even further.  And so the cycle continues.

And I didn't even include the effect of the mandatory insurance McDonald's will now have to provide all its workers, which will also raise the cost of the coffee and add more layoffs.

"But," you argue, "ten cents more for a cup of coffee isn't that much if it guarantees health care for people who need it."  Well, let's look at something more expensive, something you can't live without.  Like tires.  My car needs them, and my husband thinks it will cost at least $600 for a set of four, probably more.  So assuming we can get them for $600, with 7% state sales tax, the price would be $642.  Add 10% VAT tax to that, and the price becomes a whopping $702.  If the VAT tax was 25% as it is in Sweden (and don't think that it will never go there, because in 20 years or so it very well might), then the cost of those $600 tires now becomes $792!

See why this is a bad idea?  The Christian Science Monitor said in its article  "New Health Care Bill:  A Robin Hood tax with a twist"   that   "In a decade or so, we'll know whether the new healthcare plan took from the rich to give to the less fortunate – or just mortgaged the future for all of us."

So, what do you think?

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