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Tax The Wealthy, Make Everyone Healthy

From the deep thinking Robert Reich, via that well of deep thinking, Salon:

Tax the wealthy to keep everyone healthy

It’s what the House of Representatives wants to do to pay for healthcare. It’s a good idea, and a great slogan

By Robert Reich

Jul. 16, 2009

It’s the most blatant form of Robin Hood economics ever proposed. The universal healthcare bill reported by the House Tuesday pays for the health insurance of the 20 percent of Americans who need help affording it with a surtax on the richest 1 percent.

I don’t recall the last time Congress came up with such a direct redistribution. Occasionally Congress closes a few tax loopholes at the top and offers a refundable tax credit to workers at the bottom, or it creates a poor people’s program like Medicaid, paid for out of general revenues from a progressive income tax. But to say out loud, as the House has just done, that those in our society who can most readily afford it should pay for the health insurance of those who cannot is, well, audacious.

There’s another word for it: fair. According to the most recent data (for 2007), the best-off 1 percent of American households take home about 20 percent of total income — the highest percentage since 1928. Yes, I know: Critics will charge that these are the very people who invest, innovate and hire, and thereby keep the economy going. So raising their taxes will burden the economy and thereby hurt everyone, including those who are supposed to be helped.

But there’s no reason to suppose that taking a tiny sliver of the incomes of the top 1 percent will reduce all that much of their ardor to invest, innovate and hire in the future. Yet if this tiny sliver means affordable healthcare for a far larger number of Americans, who will be able to get regular checkups and thereby stay healthy and productive, the positive effect on the American economy is likely to be far greater.

Don’t believe critics who say the surtax will harm small business. According to the Center for Tax Justice, it would hit only 5 percent of small-business owners — realistically defined as taxpayers for whom small-business income makes up at least half of their adjusted gross income (from schedule C businesses, partnerships, family farms and Subchapter S corporations).

Besides, only the profits of a small business would be taxed. The owner of a small business deducts money paid to employees as compensation, as well as operating costs. So, for example, a couple whose income comes entirely from a small business would have to earn more than $350,000 in business profits — after paying all their expenses, including salaries — before the surcharge would affect them at all. And if they earned more, the surcharge wouldn’t reduce their incentive to hire more employees because they pay employees with pre-tax income. And not even purchases of equipment to expand business operations would be affected because most small business owners can write off up to $250,000 of the costs of such equipment immediately.

A surtax is easy to administer. And the whole idea is easy to understand. Tax the wealthy to keep everyone healthy. Not even a bad bumper sticker.

The Democrats are so confident that this will pass through the Congress and get signed into law they don’t even mind tipping their hands.

In fact, they feel free to gleefully trumpet their intentions, as Mr. Reich does here.

And why not?

The left has already gamed the system so that a majority do not pay any income tax. Indeed, there are now surely more people getting benefits from the government than there are those paying for those benefits.

When most of the voters are now denizens of Sherwood Forest, what is the risk of being Robin Hood?

Still, just imagine the howls of outrage we would have had heard if some brave soul had accused Mr. Obama as having this plan in mind during the last election.

Just ask ‘Joe The Plumber.’

(Thanks to Melly for the heads up.)

This article was posted by Steve on Sunday, July 19th, 2009. Comments are currently closed.

33 Responses to “Tax The Wealthy, Make Everyone Healthy”

  1. bronzeprofessor says:

    Salon is the magazine whose articles are most often forwarded to me by liberal colleagues in the days after a political argument. Here’s the routine:

    ME: Hi, how was your weekend?

    LIB: It was okay. But I read Frank Rich’s latest article and now I’m furious at you conservatives for being such selfish, treasonous cads.

    ME: Frank Rich? Oh, he lies. He said someone used the words “kill him” at a Sarah Palin rally. I was there, it wasn’t true. He says lies like that all the time.

    LIB: But don’t you care about health care? Don’t you call yourself a Christian? What about liberation theology?

    ME: Is that what Frank Rich was talking about? You’re losing me, here. Yes, I’m Christian. I don’t think socialized health care is very Christian, because it’s totalitarian and a false promise to people and in the end it will make care very bad and uncompassionate. Just look at how government-run affairs deal with other aspects of our lives —

    LIB: But studies have shown that health care will be more affordable and better with universal care. And people who are making a lot ought to care about the poor.

    ME: What studies? Are you just accepting Obama speeches as studies? That’s political rhetoric.

    LIB: He cites a study that shows health care savings will top a trillion in ten years with his plan.

    ME: Didn’t he also say unemployment wouldn’t go above 8%? Didn’t he also say he would cut the deficit in half, but now it’s 4 times as big? Didn’t he say, at one point, that there wouldbe 5 million green collar jobs? Do you trust his studies as incontrovertible truth when so many of his statistics haven’t worked out?

    LIB: That’s Bush’s fault. Do you excuse Bush’s deficits?

    ME: No, I didn’t vote for Bush.

    LIB: So you should support Obama’s health care plan.

    ME: I don’t, because I don’t like reckless spending and the taxes and deficits are going to be harmful.

    LIB: I’m going to forward you an article I saw on Salon.

    That’s how almost all my arguments with liberals end — with a note in my email inbox from Salon magazine. And every time I try to read the Salon articles, I feel like I’m reliving the same stupid debate, with the same groundless inaccurate statistics and bogus studies.

    Case in point: The “Tax Policy Center”, called non-partisan by Salon, predicted last summer that Obama would increase the deficit to $3.5 trillion in four years, but McCain would increase it to $5 trillion. The statistic got quoted again and again by liberals. They treated it as fact. And now…. well, you see where we are.

    • proreason says:

      liberals make up their facts

    • Rusty Shackleford says:

      A “fact” to a liberal has to have one critical component: Something that drives the emotional center of less capable humans to want to act…or panic. It’s an old mechanism and until most recently, our politicians have merely played with it, testing its effectiveness in trial markets here and there. Now, they unabashedly scream from the rooftops “crisis” and yell fire in the crowded moviehouse.

      Their actions are as criminal as they are unethical. To call anything a crisis in a public way like that and to thus prompt citizens to motion, even in the entirely wrong direction is a crime, as far as I’m concerned.

      To them it may be simple sheep-herding but I sorely hope the day will come when people realize that they have followed a trail that leads to complete failure of our system.

      I truly hate to admit it but the liberals are winning the war of ideas on a simply emotional level. And this has demonstrated to me that at least half this nation finds thinking too hard. I shouldn’t be surprised, for when I go out on the road and just drive…it is blatantly obvious. There’s stupid everywhere.

    • Steve says:

      Yes, the Tax Policy Center is run conjointly by the Brookings Institute and the Urban Institute, both of which are hard left organizations, as we have noted several times before:

      AP Calls Leftwing Tax Report ‘Non-Partisan’ | Sweetness & Light

      AP Checks GOP Speeches With Dem ‘Facts’ | Sweetness & Light

    • catie says:

      Bobby, that sounds like conversations I have with my lunatic liberal sorority sister. She sends me gems from Salon, some garbage from MSNBC and various other assorted “groups”.
      Steve, everytime that Michael O’Hanlon from the Brookings Inst. is on Shep Smith’s show he calls them “a conservative think tank”. Old Mikey doesn’t correct him. I really don’t understand why. But then again liberals never really like to admit they’re liberals too often.

    • bronzeprofessor says:

      Catie, I have a colleague here in Sociology who did her PhD thesis on “The Effect on Education of Conservative Thinktanks.” She’s a big Dennis Kucinic supporter. I asked her about her work and told her, “you should have called your thesis, ‘The Eating Habits of the Conservative, and other Facts about Strange Exotic Dangerous Animals.” Her work is the most condescending stuff I’ve ever seen in the academy.

      But she includes the Brookings Institution as a conservative thinktank. When she told me that, I said, “huh?” Then I realized, she calls the Brookings conservative as a way of helping the Brookings people –kind of like calling David Brooks and Kathleen Parker conservative, so then you can use them against other conservatives.

      Steve, thanks for those links on the Tax Policy Center. I wonder if you saw the article that came out early in summer 2008 that concluded that McCain would cause a bigger deficit than Obama by $1.5 trillion. It was such a ridiculously outrageous proposition yet I remember so many liberals quoting it and claiming Obama was going to be “fiscally responsible” and “pragmatic” and “not ideological.”

      If you can find that old article it would be a hoot just to read it and see how dishonest the TPC was back then.

  2. proreason says:

    “But there’s no reason to suppose that taking a tiny sliver of the incomes of the top 1 percent will reduce all that much of their ardor to invest, innovate and hire in the future.”


    The truth is exactly the opposite. There is decades worth of evidence that shows people with high incomes are expert at lowering thier tax profile when the tax rates go up.

    Indeed, that is the reason that teeny Robbie Reich can claim that the top 1% take have a higher % of income than ever before. In a nutshell, they allow it to be taxed when the rates are not confiscatory. The truth is that there is very little difference between income strata now and 40 years ago. And if the highest strata has more income now that before, it is due to teeny Robbie’s buddies like Soros and Goldman Sachs destroying the wealth of the middle class to create more separation between them and us. And those criminal aren’t the top 1%….they are the top .001%…..there is where your “tiny sliver” of finacial jihadists lie…..the Soros, Kennedys, and Kerry/Heinz’s of the world. But they pay taxes at rates 1/1000th of what you pay and they won’t pay an additional dime no matter what the tax code says. They simply buy off the politicians. They WRITE the tax code.

    But let’s lay out the real landscape of wealth. Teeny Robbie and the Moron’s Criminal Cabal have no intent whatsoever to tax their super-wealthy patrons. Those are people like the evil genius Soros, and idiots like the Kennedys and Kerrys. That group also contains decent people like Buffet and Gates. That group pays whatever they choose in taxes. They simply have whatever provisions they want written into the tax code. Some of those people are the Moron’s handlers.

    But there is a second tier of wealth that is the real target. That tier contains people with high income, but not enought to own the politicians and hire armys of lawyers to write the tax code for the idiot Rangel. Most successful business owners are in that group. They are the people who create jobs. (Do you thank a Kennedy or Kerry has never created a job? To think it is to laugh. Their long-dead relatives made their money and now they just sit on it, “investing” it in the lowest-possible risk vehicles. Since they are incredibly wealthy, they hardly need to make their estates grow at all to live sumptiously.)

    The targeted group are the people whose money IS at risk, and they typically invest it in businesses and markets, seeking to break into the upper echelons of wealth, where they are truly financially independent. But if the government attempts to confiscate it,they simply pull in their horns, put it in less-risky investment vehicles and wait for better times. That’s why tax revenues decline when the tax rates go up. People in that wealth strata have enough to wait a long time, and they do.

    But let’s do some quick math, using teeny Robbie’s numbers. He says 1% take in 20% of the income. I’m sure he has statistics to back it up, but those stats won’t count Soros and Kennedy’s true income, which is so hidden by their armies of lawyers that it will never be discovered. Anyway, If the 1% and 20% were true, the 1% takes in about $2.4 trillion a year. 5.4% of that would pull in $129 billion. That’s about 1/5 of what the Universal Health Scare will cost.

    Notice he doesn’t do the math for you?

    • Rusty Shackleford says:

      “Their long-dead relatives made their money and now they just sit on it, “investing” it in the lowest-possible risk vehicles.”

      Yes, bootlegging and shaking down businesses was fairly lucrative for an undocumented Irish immigrant in the 20’s, wasn’t it?

  3. jobeth says:

    Thanks guys, You all have articulated what is driving my up the walls.

    BP these arguments with the left can raise my blood pressure because like Pro said…they just make up facts as they go.

    You just can’t talk sense to them. Sometimes I feel like I am drowning in a see of liberals and can’t get my breath.

  4. Liberals Demise says:

    What if we were to take away the “free” health plan the turds on the hill get. Do you for one minute think that they would love the plan they are shoving down our throats that will do absolutely nothing for us but cause future generations to loathe us?
    If we could only pull them down for their “Mt. High” and have them become one of us “citizens” again. Without the perks of being one of the turds on the hill!


  5. 12 Gauge Rage says:

    Take note of the picture from this article. Lenin is giving a speech to a group of armed thugs. Armed to ensure that they enforce his policies upon the working class. Taxing the wealthy won’t make everyone happy especially the rich. I know that some wealthy people such as Bernie Madoff are unethical but it’s the wealthy who invest and create jobs. When was the last time a dirt poor man hired people to work for him or loaned out money to investors?

    The sweet payback to all of this would be for those who backed Obama and his forty thieves to suddenly wake up and withhold financing for his re-election. You need people with deep pockets to run for president but you can’t go to those people when you’ve spent the previous four years fleecing them for everything they’ve got. When all else fails, people take notice when you start hitting them in the pocketbook.

    • catie says:

      12, I’d like to believe that his rich friends would withhold funds but I see old stupid Tom Hanks and his ilk as well other sports, rap and hollyweird celebs still hoping for the chance to clean his bottom with their tongues after he has a bowel movement. Next up is that (in my opinion) non-talent Brad Paisely at the White House for the Weds. evening cocktail hour. Hell, even the rock band Styx was there a few weeks ago mugging in the press room while meeting and greeting the messiah. But then again they lost me after the “Kilroy” album in 1983ish. I would assume all these rich people have their assets tied up in the Turks & Caicos or someplace like that offshore where it can’t be touched. It’s just the honest folks who will get hurt.

  6. beautyofreason says:

    “Don’t believe critics who say the surtax will harm small business.”

    Another lie, I’m sure. I’m fuming. My father is a dentist with his own private practice. His accountant estimated over $30,000 in new taxes due to proposed penalties from the Obama administration over providing health care plans to his employees. That’s one less employee my dad can afford to hire – or one he has to fire to make up for the cost. And now the vultures in big government want more? Yes, tax the rich, tax the doctors, lose your medical care (he’s retiring if socialized medicine comes through).

  7. canary says:

    Catie, too many unusual trips by Hillary. It did not surprise me in the least Obama choosing her. He needed to know how to hide the money. Her first sneaky trip to Indonesia. Then Hillary goes to China and check their factory for environmental reasons. Clinton goes to Haiti after leaving office, now more frequent trips as he is ambassador to Haiti. Course that could be checking on the drug business and Bill loves those Haiti women. It’s nothing but business between Hillary and Bill now. The duaghter in the wings.

  8. canary says:

    Family farms? So, the years they barely scrape by, will mean no hope for a good year.
    The government run like the mafia.
    Now, Obama’s growing book business. Are the many ghost writers, handlers, editors, transcribers, going to get health insurance.

  9. canary says:

    I guess when Obama says “many” think America should be run like Chavez’s empire, an idea Obama does not “dismiss”. I guess the many are the ones, fawning him, and taking time for a moment of silence for MJ, the one democrat writing up a resolution for MJ, that the Obombies do not mind Obama’s lavish
    presidency, much like a child in a toy store.
    When Obama mentions his reasons, hidden medical costs, unnecessary tests, etc. How come they can’t be more transparent. Why does everything have to be overnight with Obama. It’s not like people are dying on the streets.

    And Obama knows first hand the devastion of cocaine on health costs. Children in poverty, whose only food is from school, the killings, the robberys. He doesn’t approach this as a major problem in the U.S. He doesn’t want to lose his biggest fans.

    • proreason says:

      I heard a great saying the other day:

      “Never buy a watch from a man who is out of breath”.

      That’s exactly what the country is about to do.

  10. LewWaters says:

    Truthfully, the slogan is “Tax the wealthy and put everyone in poverty.”

    • David says:

      I was thinking: Obamacare…
      “spread the wealth in the name of health” or
      “give me forced government plan and/or give me death”
      “providing insurance for 14% of the (possible legal) population… priceless $1.5 Trillion”
      “long waits and mediocre health care is a human right!”

    • proreason says:

      Uncle Obamy needs you to die, senior citizens!

  11. MinnesotaRush says:

    The lunacy continues!

    “But there’s no reason to suppose that taking a tiny sliver of the incomes of the top 1 percent will reduce all that much of their ardor to invest, innovate and hire in the future.”

    Oh! And have you asked them? How many “slivers” will be enough for you Socialists to take?

    “Don’t believe critics who say the surtax will harm small business.”

    Oh! So you asked them, too? Be honest. Just say, “Don’t believe the critics.” Period. That’s what you want to say, so say it! “Don’t believe anybody who debates against our thinking .”

    These people are morally and intellectually bankrupt!

  12. Colonel1961 says:

    I guess the ‘pay their fair share’ line was getting worn out…

    • Melly says:

      Yep – now it’s just “fair” to impose a surtax (whatever amount/sliver) on the rich.

  13. BillK says:

    A surtax will not harm small business, unless they don’t have enough employees they can fire to offset the increased expenses.

    Will it harm those who might otherwise be employed by those small businesses? Yes.

    Will it harm kids looking for a first job? Yes.

    Will it drive more people to believe the Government is their only savior? Definitely yes.

    And that’s the whole point.

    The more Americans who become dependent upon Government, the more power Government has.

    As has been stated before, health care will make Social Security look like an accounting error.

    Social Security may be the “third rail” but Government health care will be the 10,000 volt electric fence bordering the tracks.

  14. BannedbytheTaliban says:

    “It’s the most blatant form of Robin Hood economics ever proposed”

    It seems to me I must have “misremembered” the story of Robin Hood. According to my recollection, Robin Hood stole from the rich, illegitimate king who, thorough his henchman, the Sheriff of Rottingham, took money from the hard working people of Sherwood Forest through a process called TAXES to enrich himself. If this tax really where a case of Robin Hood economics, wouldn’t we only tax politicians? But why let the truth stand in the way of good propaganda?

    • Melly says:

      You know things are bad when one can dumb down “Robin Hood” and people believe it.

    • neocon mom says:

      The Robin Hood story has been completely co-opted by champions of “social justice”. I guess it’s a result of public education that enough folks accept this total reversal of the narrative.

      The real tragedy is that we conservatives haven’t taken it back. Robin Hood truly illustrates conservative principles and principles of our founding fathers. Robin Hood fought against the forces of a too-powerful, unaccountable government with an insatiable appetite for the property of its citizens. The stupid and thuggish King John and his cohorts loved flaunting their take, by doing things like taking Air Force One to NYC for an evening getaway, or using the stolen treasure to buy signs informing the citizens that their stolen treasure was used to buy said signs, or ramming trillion dollar spending bills through congress before anyone had a chance to even read them…er, wait a minute, even King John wasn’t as nuts as that.

  15. 12 Gauge Rage says:

    You guys are forgetting Obama’s definition of Robin Hood. It’s now Robbing Hood. Steal from the wretch and give to the peer.

  16. Enthalpy says:

    I think I should have paid a lot more attention to Pat Buchanan. Mr. Buchanan wrote a piece last week that speaks of Robert Reich–not directly, but accurately. Buchanan’s article, Socialist America Sinking, includes at its beginning a quote from Garet Garett’s “The People’s Pottage:”

    “There are those who still think they are holding the pass against a revolution that may be coming up the road. But they are gazing in the wrong direction. The revolution is behind them. It went by in the Night of Depression, singing songs to freedom.”

    “Garrett wrote of a revolution within the form. While outwardly America appeared the same, a revolution within had taken place that was now irreversible.”

    Reich and the other delusional fools support a political religion that will kill initiative. To have to pay for their madness is bad enough, but they will destroy the very structure required to bring prosperity to a majority of our people.

    If we plan on avoiding Orwell’s boot on our neck–forever, we better get busy.

    • proreason says:

      “Reich and the other delusional fools support a political religion that will kill initiative.”

      They are ok with that.

      After all, they will be the aristocrats who live like emperors as they rule us.

      Even the Dark Ages were GREAT for the ruling aristocracy. Absolute control of 99.9% of something, no matter how diminished in comparison to what it might have been, makes you feel pretty good.

  17. Enthalpy says:

    No question about that, proreason.

  18. navymom says:

    I’m curious. If liberals want to live in a socialized country so, so bad, why don’t they simply move to one? They have so many choices. Why do they feel they have to change the US? Answer: They think they are going to be among the “Elite” ruling party in America. They won’t have to be in the lower working class. If they moved to a Communist/Socialist country, they would be nobodys. I’ve got news for them, they’re already nobodys. They simply don’t realize it. I personally would pitch in for air fare for a few choice people if they would move to another country. One provision…they could NEVER return to the US. Leave the U.S. the %&*# alone. It’s major problem is all the liberals trying to change it!

    • Liberals Demise says:

      That won’t do, navymom!
      To them, “WE” are the problem and it is “We” that must go not them. They cannot leave anything that is working alone. That is their major malfunction. If they could get away with it …. they would re-invent the wheel and handkerchief. Hell, I’ll even toss in the napkin!! They will not leave well enough alone, period!!

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