Everyone is entitled to his own opinion, but not his own facts.
December 24th, 2010George Will’s column today(see below)_ concerns Representative David Camp of Michigan, incoming Republican chairman of Ways and Means. Camp says:
Many conservatives, including Camp, believe that although most Americans should be paying lower taxes, more Americans should be paying taxes. The fact that 46.7 million earners pay no income tax creates moral hazard — incentives for perverse behavior: Free-riding people have scant incentive to restrain the growth of government they are not paying for with income taxes.
“I believe,” Camp says, “you’ve got to have some responsibility for the government you have.” People have co-payments under Medicare, and everyone should similarly have some “skin in the game” under the income tax system.
It’s hard to know what to make of such arguments. It includes the standard Republican move of noting progressive federal income taxes without noting that low-income people pay significant payroll taxes to the federal government, not to mention the state and local sales taxes these lucky free-riders pay every time they buy a toothbrush or a stick of gum. This “skin in the game” argument is also applied rather selectively. These days, anyway, few conservatives argue that everyone who might get hit by a car should have skin in the game by remaining insured. Maybe more people should pay estate taxes, for that matter. Very few us have skin in that game, which abets continued persecution of the dynastically wealthy.
Snark aside, though, Camp has a real point. Only he should apply it more broadly. Two hundred million Americans with decent health coverage have no skin in the game when they consider the millions of poor people who need to wait 12 hours in a cruddy public hospital emergency room or some overcrowded safety-net clinic. Most Americans have no skin in the game when Arizona Medicaid recipients find out that their heart, lung, or liver transplants will no longer be covered, when South Carolinians find out that Medicaid will not cover hospice care and will cut its weekly meals on wheels deliveries from fourteen to ten, when California Medicaid no longer cover routine dental care but at least still covers the eventual tooth extractions. Few of us rely on AIDS drug assistance programs, which are turning people away or placing them on waiting lists. To take an example at random, most Americans do not have to sit in a south Chicago welfare office with a disabled brother, waiting for hours under happy-talk posters say: “Work makes sense!”
Most of us lament from a distance the failing schools and unsafe streets of our inner-cities. Few of us are gay, or are college students who lack proper immigrant papers. We have no personal stake when Congress debates whether to extend benefits to the chronically unemployed. Few of us are uninsured people with preexisting conditions. Few of us depend on Food Stamps or TANF. Few of us are frightened young women dealing with unplanned pregnancies. (Few of us, for that matter, are National Guardsmen doing repeat tours in Afghanistan or Iraq.)
Will rightly notes: “Serious arguments about taxes are never just about taxes. They are about government’s proper size and purposes.” That’s for sure. Republicans assume the House majority with the general promise of austerity and retrenchment during a deep economic crisis. When influential constituencies have direct stakes in the resulting fight—as in the case of Medicare—we have a good idea how these arguments will be resolved.
I’m more worried about other matters, which affect the most politically and economically vulnerable people who depend on federal and state government. If more of us who politically matter had real skin in that game, we would see better and different public policies.
Many conservatives, including Camp, believe that although most Americans should be paying lower taxes, more Americans should be paying taxes. The fact that 46.7 million earners pay no income tax creates moral hazard — incentives for perverse behavior: Free-riding people have scant incentive to restrain the growth of government they are not paying for with income taxes.It’s hard to know what to make of such arguments. It includes the standard Republican move of noting progressive federal income taxes without noting that low-income people pay significant payroll taxes to the federal government, not to mention the state and local sales taxes these lucky free-riders pay every time they buy a toothbrush or a stick of gum. This “skin in the game” argument is also applied rather selectively. These days, anyway, few conservatives argue that everyone who might get hit by a car should have skin in the game by remaining insured. Maybe more people should pay estate taxes, for that matter. Very few us have skin in that game, which abets continued persecution of the dynastically wealthy.
“I believe,” Camp says, “you’ve got to have some responsibility for the government you have.” People have co-payments under Medicare, and everyone should similarly have some “skin in the game” under the income tax system.
Snark aside, though, Camp has a real point. Only he should apply it more broadly. Two hundred million Americans with decent health coverage have no skin in the game when they consider the millions of poor people who need to wait 12 hours in a cruddy public hospital emergency room or some overcrowded safety-net clinic. Most Americans have no skin in the game when Arizona Medicaid recipients find out that their heart, lung, or liver transplants will no longer be covered, when South Carolinians find out that Medicaid will not cover hospice care and will cut its weekly meals on wheels deliveries from fourteen to ten, when California Medicaid no longer cover routine dental care but at least still covers the eventual tooth extractions. Few of us rely on AIDS drug assistance programs, which are turning people away or placing them on waiting lists. To take an example at random, most Americans do not have to sit in a south Chicago welfare office with a disabled brother, waiting for hours under happy-talk posters say: “Work makes sense!”
Most of us lament from a distance the failing schools and unsafe streets of our inner-cities. Few of us are gay, or are college students who lack proper immigrant papers. We have no personal stake when Congress debates whether to extend benefits to the chronically unemployed. Few of us are uninsured people with preexisting conditions. Few of us depend on Food Stamps or TANF. Few of us are frightened young women dealing with unplanned pregnancies. (Few of us, for that matter, are National Guardsmen doing repeat tours in Afghanistan or Iraq.)
Will rightly notes: “Serious arguments about taxes are never just about taxes. They are about government’s proper size and purposes.” That’s for sure. Republicans assume the House majority with the general promise of austerity and retrenchment during a deep economic crisis. When influential constituencies have direct stakes in the resulting fight—as in the case of Medicare—we have a good idea how these arguments will be resolved.
I’m more worried about other matters, which affect the most politically and economically vulnerable people who depend on federal and state government. If more of us who politically matter had real skin in that game, we would see better and different public policies.
Dave Camp's plan: Taxes made simple
By George Will10:41 AM CST, December 23, 2010Many parents have heard FICA Screams. Indignant children, holding in trembling hands their first paychecks, demand to know what FICA is and why it is feasting on their pay.
FICA (the Federal Insurance Contributions Act tax) is government compassion, expressed numerically: It is the welfare state; it funds Social Security and Medicare. Sometimes it makes young people into conservatives.
Dave Camp was 14, working for his father's garage in central Michigan, when he made the acquaintance of FICA. Now 57 and about to begin his 11th term in Congress, he will chair the House Ways and Means Committee, where he will try to implement the implications of his complaint that "the tax code is 10 times longer than the Bible, without the good news."
His aim is "fundamental" tax reform, understood the usual way — broadening the base (eliminating loopholes) to make lower rates possible. He would like a top rate of 25 percent - three points lower than Ronald Reagan achieved in 1986, with what proved to be perishable simplification.
In George W. Bush's 2004 speech to the Republican convention, he denounced the tax code as "a complicated mess" that annually requires "6 billion hours of paperwork" — now estimated at 7.6 billion. He vowed to "simplify" it. The audience cheered. Then he promised new complexities. There would be "opportunity zones" — tax relief for depressed areas — and a tax credit to encourage businesses to establish health savings accounts. The audience cheered.
This is perennial mischief — using the tax code not simply to raise revenue efficiently (with minimal distortion of economic behavior) but to pamper pet causes, appease muscular interests and make social policy. Since 1986, the tax code has acquired more than 15,000 complications.
"Targeted" tax cuts are popular complexities because they serve a bossy government's agenda of behavior modification: You can keep more of your money if you do what Washington wants. The tax code, says Camp, "should not be a tool of industrial policy" or of "crony capitalism": "Politicians should not pick the industry of the day."
One of Camp's objections to the health-care law is its obvious design to cripple health savings accounts. With HSAs, an individual who buys high-deductible health insurance becomes eligible for tax-preferred savings out of which he or she pays routine health expenses. (No one expects auto insurance to pay for oil changes or new windshield wipers.) This gives consumers of health care an incentive to shop wisely for it. Camp says the health-care law will make HSAs less attractive because "a qualified plan will be defined by the government rather than the market." And government will make HSAs unnecessarily expensive by requiring them to have "all the bells and whistles."
Many conservatives, including Camp, believe that although most Americans should be paying lower taxes, more Americans should be paying taxes. The fact that 46.7 million earners pay no income tax creates moral hazard — incentives for perverse behavior: Free-riding people have scant incentive to restrain the growth of government they are not paying for with income taxes.
"I believe," Camp says, "you've got to have some responsibility for the government you have." People have co-payments under Medicare, and everyone should similarly have some "skin in the game" under the income tax system.
In addition to the one-third of the 143 million tax returns filed by individual earners for 2007 that showed no tax liability, additional millions of households have incomes low enough to exempt them from filing tax returns. The bottom two quintiles of earners have negative income tax liabilities — they receive cash payments from the government via refundable tax credits.
Camp remains amazed by the slipshod practices by which banks and other financial institutions made mortgage loans without due diligence. He remembers that "the president of the bank approved my first Visa card." Other things have changed, too. "I used to do my own taxes," Camp says, "until I got on Ways and Means." No more. The tax code is so complex that the chairman of the tax-writing committee, like many millions of Americans, cannot be confident he can properly perform, unassisted, the duty of paying taxes.
If Barack Obama is accurately reported to be considering serious tax simplification and lower rates, he will have an ally in Camp — up to a point. Serious arguments about taxes are never just about taxes. They are about government's proper size and purposes. Concerning that, Obama differs with Camp, who says: "Washington doesn't have a revenue problem. It has a spending problem."
Washington Post Writers Group
George Will is a syndicated columnist based in Washington.
georgewill@washpost.com
Copyright © 2010, Chicago Tribune
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