Topic: Health Care
A Libertarian's No-Nonsense Health Care Reform Proposal Is it really so difficult to improve health care in America? Here is a series of proposals that John Galt would approve in a heartbeat.by EJ Moosa
(libertarian)
Thursday, August 20, 2009
A Libertarian's No-Nonsense Health Care Reform Proposal
Effective immediately, all health care premiums will be 100% deductible from the Federal Income Tax.
Effective January 1, 2010, all earnings of health care doctors, nurses, and other licensed providers of medical services will be exempt from paying Federal Income Tax.
Effective immediately, all medical expenses currently allowed to be deducted from the Federal Income Tax (subject to the greater than 7.5% of income requirements) shall be 100% deductible from the Federal Income Tax.
Effective January 1, 2010, all for-profit hospitals shall have their corporate tax rates reduced to 0.
Effective January 1. 2010, those restriction on the sales of across the border health plans shall be prohibited under the Interstate Commerce Clause. If someone wishes to purchase health insurance out of state, they shall be allowed to do so without restriction, if it meets their needs.
What do the above proposals do?
Proposals 1,3 and 5 will reduce the cost of health care for all Americans immediately. Paying for premiums, procedures, and insurance with pre-tax dollars means that the dollars will go further when buying insurance and services. The ability to purchase health insurance from providers outside of your state market increases competition and provides consumers more choices.
Proposals 2 will increase the supply of doctor's, nurses and other medical professionals. If the current proposal was prepared to spend trillions of dollars, certainly forgoing billions in tax collections would be better for the Federal Deficit.
Proposal 4 will reduce the cost of opening new medical facilities for the treatment of patients. Consequently, more facilities open and competing for patients will drive down the costs for those patients in the long run.
If you increase supply, and give people greater purchasing power with their dollars, then supply and demand will adjust itself as needed as we move forward.
We already are facing a severe nursing shortage in many areas of the nation. Doctors near retirement are considering early retirement if the Obama Plan wins approval. We cannot afford to add 47 million to coverage and reduce the number of doctors.
Instead, we need to keep those doctors in the office for more patient visits, not fewer. And we need to give potential doctors a reason to enter the medical profession. What better motivation could one have then the ability to keep what you earn. This increase in supply will keep competition alive in the medical profession, and keep a check on costs. It's how free markets are meant to work.
At 147 words, the above proposals could change Health Care in America for the better forever.
What are your thoughts? Would a tax-free zone for medical care be a workable solution to the "crisis" we have been told we have? Let me know what you think. And if you agree, forward the proposal to your Congressman and Senators.
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Posted By: Jahfre Fire Eater
Date: 2009-08-20 06:22:08
Hi EJ.
As long as were delving into fantasy why go half way?
1. Abolish Federal Income Taxes
2. Eliminate licensing requirements
3. moot point, see #1
4. all corporate tax rates eliminated
5. Business and States should decide their market boundaries, not federal regulations. I like the idea of States being able to use business opportunity as competitive advantages to attract productive citizens to their state.
Why is it fantasy? If the objective of those in charge today is to improve health care(that is their stated objective) what is not possible? We certainly lived in that fantasy world 175 years ago?
I agree, your plan is one I would seek as well. It is time to call their bluff. But this was to specifically address the Health Care issue and a response to what they are preparing to force upon us.
I have to agree with Jahfre, unless your suggestions are applied across the board to everyone, and they should be, they simply become a tax break to special interests.
Also, any tax break [1 and 3] that allows investment in any particular area has the effect of "raising" prices in that area.
And, the feds have no constitutional right to "encourage" interstate commerce or restrict it, not that the constitution is of any concern to our government!
Posted By: Jahfre Fire Eater
Date: 2009-08-20 08:53:01
Hi EJ,
I didn't use "fantasy" in a derogatory manner; my assumption was that I was merely overstating the obvious. In a time when the momentum is towards drastic tax increases on high income earners, many of whom are healthcare professionals, exempting them from the tax rolls is . . . fantasy. That was all I meant. Kind of like trying to interrupt sharks during a feeding frenzy to get them to consider vegetarianism.
On a larger scale, tweaking the system so its oppressive levers are less oppressive has never been the goal of government growth. Control of future votes is the game. Don't let your quest for desirable outcomes blind you to the fact that desirable outcomes are not the purpose of federal government programs. They are purely investments in future political campaigns.
Nothing today is applied across the board to everyone. So why would that be a requirement?
Second, you are incorrect. Eliminating taxes does not increase the cost of goods and services. Quite the opposite. By eliminating taxes, you lower the cost of doing business and the break-even point. If you want less of something, then you tax it.
Your third point: they do it anyway today.
The goal is to improve health care, not to eliminate all the miscarriages of justice we already endure.
It is the momentum of a minority that are in pursuit of high taxes. But that will just lead to less of what we want-more medical care.
So it is up to those of us who understand this to get that message across.
And I agree-Government Growth does not want to lessen the oppressive levers....but that should not stop any of us from pointing out that there are other ways, and if we hold them to the "original" premise-Improve health care as the primary objective, then they should have to relinquish some of their secondary objectives (control) if we can illustrate that we can improve health care with Free Market approach.
Would you agree or disagree that the above proposals would improve health care in the United States? After all, that is what my proposals seek to do.
"across the board" is only a requirement in the Libertarian viewpoint, you are correct in saying that nothing is done across the board. that is called "special interests".
in your comment you said, "if you want less of something, tax it". that is exactly what you propose, exempting health care from taxation raises the relative taxes on everything else. so, you get less of everything else and more of health care, which raises prices.
Did you catch the question to the President today about opening up the Federal Health care plan to all comers, or to have the Federal employees use the "Public Option" they want to create?
They are not going to share it with us, and they will not be pushed into it as they are planning for the rest of us.
If that does not scare you, I am unsure what will.
I hear so many people debating over the same issues in healthcare and I feel like many of the parties involved in these debates are fairly narrow-minded in that they are so focused on specific aspects of healthcare to reform and are ignoring the fact that to truly reform healthcare one must take into account all the factors driving up costs. I for one would love to hear someone try and deal with the issue of malpractice. It's a tricky subject and there needs to be a system in place which can both provide oversight to ensure that doctors are held accountable for their mistakes, but also a system that is capable of shielding doctors from silly torts with no basis. The Obama healthcare reform proposed mandating that doctors not perform needless tests on patients, but it seems that charging a patient for a $150 test is much nicer than getting footed with a big fat malpractice suit because they are the one in a million patient who happens to have the disease and you didn't catch it.
I like most of your ideas and I agree with the spirit of your proposals. My criticism here is to correct what I percieve as either faulty reasoning, or else poor choice of wording (not sure which it is.) I will assume the goal is to not only lower costs to final consumers, but without hiding the actual costs by using public/government funding. I will also assume that by "cost" you are talking about the number of dollars spent, rather than the opportunity cost. Additionally I will assume that your proposal is to achieve results in cost and quality of treatment to consumers, and not some kind of justice, liberty, or equality, which would make this proposal really tough to debate with some folks. I'm with Jahfre in asking why only go half-way, there.
I'll go through my problems with them by proposal number:
#1 & #3. My main problem here is with your use of the word "immediately" in your explaination of what the proposals would do in dropping prices. The opposite is true. Immediately there would be an upward push on prices as more people are likely to make the decision to get insured, have a check-up, have a proceedure done, etc. "Immediately," the same amount of goods and services are available with more people trying to get at them. In such a situation prices will necessarily rise. Now, as time progresses with this proposal going, insurance and health care providers will react by hiring more people, getting new equipment, R&D, marketing plans, etc. As time progresses (not immediately), either care will improve, prices will drop, or both. This will not happen "immediately" by any stretch of the imagination. The proposal will reset the equilibrium point because of increased demand. The market's supply will adjust to meet it over time. I have no problem with #5, in you saying that insurance rates would drop "immediately" if state barriers to insurance were ended. That seems fairly accurate. (And also a nice change in Congress actually paying attention to their granted powers in the Constitution instead of seeking powers they are either not granted or expressly denied.)
#4. You claim that ending corporate taxes will reduce the cost of new buildings and such. The opposite is true for the same reasons of supply and demand listed above. Extra money seeking constuction and real estate means demand will exceed supply and prices for those things will rise. It is certainly true that over time quality and cost to the end consumer will improve, but prices for capital investments for hospitals, etc. will rise, until the supply of such rises to meet the new demand.
So, I hope my criticism was constructive and informative. The spirit of what you are proposing is interesting, but the details of the probable effects are either way off, or misleading in their wording. The point you are trying to get across is right on the money, that is if you are aiming at the goals of increasing quality and reducing prices. The details will destroy your credibility if trying to actually get support for this.
Thanks for the feedback. Here are a few comments I have in response
1) The difficulty in debating what is driving up health care costs are manyfold. One of the items, which we cannot truly discuss is the role that mandates made by government to drive up costs. Government is not going to say "Hey, it's our fault. Let us undo what we have done to make things worse". It never happens.
So we are left debating things that are secondary issues, when the primary issues are the ones that must be addressed.
2) Yes, demand may go up slightly at the start. But that is because demand has been artificially restricted by what has happened to date. Believe in the free markets and things will correct much faster than anyone anticipates. Also, there are many people with coverage today, who do not go to the doctor with every ache and fever. We should not expect the newly insured to act different. Many of the uninsured are healthy individuals who do not even see the need for insurance.
3) Regarding construction: We are in a serious slow down in construction across the board. There probably is not a better time to start building new facilities. Were we at the peak of the economic cycle, I would be more inclined to agree. But this would bring more people back into active construction. and reduce unemployment at the same time. Commodity prices are down such as steel, concrete, and other interior bulding materials), so it is likely never going to be cheaper to build than it is now.
The true key is to get government out of the way, and let the free markets respond to demand and take the risks associated with this opportunity. If the demand is really there, the supply will materialize if there is no interference.
Government attempts to manage the risks by controlling the demand, and that ends in failure.
Agree 100% with your last comment. I would focus on that. The key to "fixing" healthcare is to "unbreak" it. The proposals you have are mostly a way of fixing it, and do little in the big scheme of things to unbreak it. The best proposal you have is #5. It "unbreaks" a problem. It is foolproof. It is Constitutional. There isn't a good valid argument to refute it among those on the left seeking social justice, etc, your main opposition. I appreciate Jahfre's opposition based on the concepts of federalism and state sovereignty, and they are good points. However no one seems to proposing that businesses redefine their market boundries. Instead, we propose that state governments stop defining boundries for business and free up trade between the states, also a key concept of federalism, and one of the enumerated powers of US Congress.
Why stop at exempting health care professionals from federal tax? I'm a small business owner, all my business done right her in the USA. If you want to see small business survive we need to have insurance available w/out preexisting that can easily bankrrupt a family, when such treatment is necessary and insurance is not covering (your proposal does not address preexisting problem). If you're going to give health workers a break, I want one too. Federal tax exemption would put a lot more money in my pocket for health care. If the government were to give the health care professionals who make way more than the average joe, tax exemption without doing the same for everyone else...well it's quite a fantasy to think you could sell such a thing to the general public. Also, you're assuming the entire reason that health care professionals are in short supply is that they don't see enough money. What about the cost to educate them? Should a degree in the health care field be free? Or exemption from federal tax to those who are attending college (or have kids attending) for health related degree? The list could go on and on of those who should be excluded from federal tax under such a proposal.
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