Friday, July 31, 2009

Healthcare Reform -- The Income Tax circa-1913

I am for health care being made available and affordable to all Americans, and I'm (very cautiously) in favor (at least not completely opposed) to a nationalized health care option. However, I think caution is needed in accepting Congress' current plan and the guarantees the president and congressional leaders make regarding the a fore mentioned Act. I thought I would bring up something from our past to illustrate -- the income tax.

The first tax return was required to be filed by those that made 3,000 dollars+ during the tax year -- over 64,000 dollars adjusted for inflation. The top rate for the uber-rich was a big fat 6%. A minute 1% tax was owed if an individual had net income less that 20,000 dollars -- 430,406 dollars inflated to 2008 value. The income tax promised when it was enacted was supposed to small and painless to We the People, but the tax system promised has turned into a monstrous beast of government influence. The rates are high, it is used as welfare vehicle, and it is incredibly complex, a gross mutation from the simplistic tax system enacted in 1913.

The President and Congressional leaders are promising that the public option (using the Social Security/Medicare system -- the largest ponzi scheme ever) will provide a flowery fix to the problem of ever booming health care costs. We the people need to have our voices heard on this issue. Given the problems that Social Security already has, it gives me pause to think that our leaders want to put the entire health care in the hands of this same agency. It may be that using Social Security is the best option to provide insurance to everyone, but Congress needs to put a little more caution into creating (what may become) one of the most intrusive government programs in American history.

While I yearn to feel confident that my family and I can afford to see doctors when necessary, I am scared to death to think of Social Security-esque bureaucracy becoming a part of the health care system. I have nightmares of taking my kids to the doctors and the offices resembling the stark white, inefficient Social Security offices I have had to misfortune of visiting on a few occasions.

There may be other options.

y-intercept had an interesting post, about the perverse incentives that insurers have in rising health care costs. He suggested that health cost should flow through individual accounts in Medical Savings and Loans, laws of supply and demand would be better able to regulate skyrocketing health care costs.

I hope that our leaders step back before they take us down a road that will be irreversible. I fear that we will soon tie ourselves to a system that our children will curse for generations to come. Everyone needs to be able to see a physician without worrying about bankruptcy, but we should be able to do it without possibly bankrupting the nation or burdening future generations with an even more grievous tax burden.


Anonymous said...

You've hit on the point that those for nationalized (socialized) health care seems to get (or choose to disregard). It costs money, lot and lots of money. I've lived in a country that had socialized care. It was fantastic--almost free hospital and doctor visits for everyone. Hilariously inexpensive prescription drug care. In the lower 5 infant mortality rates in the world. The kicker? 55% tax rate across the board. How it worked for them. Great. Nearly every family we knew had both mom and pop working full time. Sound good to you?

Phillip Bell, EA said...

I'm still trying to decide. Anon

I've recently discovered that I have a genetic disorder that makes me more susceptible to cancer -- in that regard I'm all for it.

The government 1/2 hating 1/2 exploiting tax accountant hates the idea of giving more control to the government.

Am I for government control or bastard insurance companies. It's still a toss up.