Wednesday, August 26, 2009

Imagine v3.0

Imagine for a moment that you are in the top 1% of the population in terms of wealth. You make $10 million a year in income and bonuses. Most likely, you are very business-wise. You know what decisions will maximize your wealth, and you act accordingly.

Healthcare reform starts to get mentioned, and it appears that your taxes may increase as a result. Nothing huge, maybe only 1% higher. From 35% to 36%. This is still far lower than when Reagan was President (the highest tax bracket paid at least 50% from 1981-1986), but it is a slight increase from the tax policy since 2003 (although still lower than taxes from 1993-2002, when our economic growth was strong).

So you make $10 million a year. That 1% tax increase is $100,000. What do you do? Do you say “alright, I’d prefer not to, but I can afford the extra $100,000 in taxes”, or instead do you think “I have to find some way to prevent this tax increase”?

Going on the assumption that you are business-minded, you’re going to take the decision which makes most sense to your bottom line. So if the alternative to paying that $100,000 in taxes is to contribute $50,000 to a lobbyist group to pressure members of Congress to eliminate the tax increase, it is something you would consider. If you realize that other wealthy individuals are also considering this option, then the probability that the lobbyist succeeds will skyrocket if all of you contribute. Using simple game theory, it is easy to see that the wealthy are better off by each of them contributing a fraction of the potential tax increase to influence Congress and prevent reform.

If that means healthcare reform fails, and millions of citizens are still left uninsured, and millions more can’t afford the insurance they have, well then so be it. You’re wealthy. You have great health insurance.

But imagine how the families who are struggling feel.

7 comments:

kevins said...

But why does there have to be an increase in taxes at all? According to all of the Democratic talking points, one of the reasons that we need reform is because we spend more...twice as more in some cases...for health care and get worse results.

Wouldn't reform, then, bring better results with LESS expense.

You seem to be conceding that all this talk about concern for the poor is merely a shell game to raise taxes and expand government.

Republican Michigander said...

Actually, a large number of the rich businessmen SUPPORT the government option. Why?

Because they'd take the government "penalty" and force the workers to get the government plan, cutting their own expenses. It's "cheaper", at least for big business.

Jordan G said...

Lol. I assume you want me to respond kevins, as a way to validate the end of your post, but really, why even bother.

If you wanted to start on a reasonable level of disagreement, then valid discussion would have been possible. But to immediately claim things that aren't there... well I think you're so used to fabricating absurd statements (if you sign on to any of the death panel, care for illegals, death book falsities) that such has become your second nature.

I know you like the attention. And I am fulfilling your desire by writing this. But grow up and learn how to respectfully debate without telling the other side what their position is. If you don't think you can stand up against my true position, then please understand that if I ignore your future posts, it's because I can't condone such immaturity.

Jordan G said...

RM - You are probably correct. My post is on a theoretical level, just to try and explain some of the motivation & strategy of those who may oppose reform. It is by no means intended to indicate that all rich businessmen would take such actions (although I'll admit I fail to make that clear in my post), as there are many examples of great businessmen who are the paragon of philanthropy and unselfishness.

And then, like your post indicates, there are those who can still follow the premise of my post and find a way to support reform. That's the beauty of game theory- you can find different aspects to the alternatives, changing the financial result to the player, and showing he should take a different route.

Game theory does hinge on the player acting in their own best interest though, which I would like to point out is not the only option.

kevins said...

Jordan, I'm crushed. But really I don't care if you don't respond to a thing I say, especially if you have nothing to add but insults.

You, in fact, are guilty of the actions that you attribute to me.

You say that I am telling the other side what their position is, and then you attribute to me a belief in death panels, etc. That's a lie. I've never supported such trash, I've dismissed it for the hokum it is. Rather than debate the issue I raise, you try to dismiss me by tying me to a false claim.

That only shows me you have no answer.

Tell me where I fabricated a position. The original post says that the very wealthy are spending money to defeat a tax hike. You think they shouldn't mind a tax hike because it is a small portion of their great wealth and it will help others. What part of that have I misrepresented?

I then take what I believe is a logical and clear assumption: That you believe there must be a tax hike to support the Obama healthcare reform. Am I right so far, or is this somehow a distortion? If so, please explain.

Then I ask what seems to me to be a fair question: If healthcare as it is now is wasteful, if we are spending more than other nations but not getting better results, then why will reform cost more? Shouldn't reform either provide better outcomes, reduce the cost or both?

Tell me please what part you disagree with? Do you think we don't spend enough on health care (that's not what Obama says, by the way)? Do you think our outcomes outshine other nations (Again, that's not Obama's position)? Where was I wrong?

So from there, I admittedly draw the conclusion that a goal of healthcare reform is to raise taxes and increase the role of government. You are free to respond and correct my mis-assumptions...or you can hide and pout. I'll be fine either way.

Before you continue to try and define my positions, let me state some of them for you: I believe we spend a lot, maybe twice as much, per capita for health care as other nations; I believe that while results vary, in general our outcomes aren't that good compared to other nations; I believe that while the exact number of uninsured is up for debate, we have a large class of Americans who need better access to affordable healthcare; and I believe that portable healthcare coverage should be a critical part of reform. I also believe that rising healthcare costs are a serious issue, particularly in the public sector where uncontrolled benefits are limiting the ability of government to provide future services without even further massive tax hikes.

These are issues worth debating and using as a basis for healthcare reform. Up to now, your position seems to be that the rich are greedy, unworthy of their riches and we should go after some of that wealth to fund our healthcare. I'm always uncomfortable with folks who think they have a right to other people's money. Because while I'm not remotely among the really rich, my guess is that soon you'll be coming after me as well.

Jordan G said...

You are completely right kevins. My position is that President Obama doesn't want to improve our healthcare system. He doesn't want to help families who are struggling with the rising cost of health insurance. He doesn't want to add competition to the market, forcing for-profit companies to keep their prices closer to that of a non-profit public option.

Nope. I believe that President Obama is trying to pass this healthcare reform for the sole purpose "to raise taxes and expand government".

I believe President Obama was sitting around one day and thought: "you know what, I want our government to be larger. How can I find a way to do such?... I know, I'll try to pass healthcare reform. That's sure to appease my desire to raise taxes. Ideally, it won't even help anyone, so that in four years, after I win the next election, I can attempt additional reform that will further expand government power and tax the wealthy even more. Because really, who wants the government to actually help the citizens of this country? Everyone is on the same page in thinking that the government should completely neglect the public good."
[/sarcasm]

kevins said...

Jordan, are you a child? Seriously. Because of you are, I won't waste the time of either of us by trying to engage in an adult discussion.

I never said anything that suggests that Obama doesn't want to improve healthcare in our country. In fact, unlike you, I've actually alluded to a couple of his core beliefs: That healthcare expenditures are too high, and that our outcomes aren't as good as they should be.

I asked you to tell me several times if I stated something wrong, or if I misunderstood or mis-stated your position. You haven't. All you've done...twice now...is ignore my questions and wrongly attribute to me positions that I've never taken.

I listed a fairly extensive list of my core beliefs on healthcare reform. You responded with a childish statement. Am I to assume now that you disagree with my positions? That would be odd since I think some of those are pretty basic and support the need for healthcare reform. (By the way, if you have to tell someone it is sarcasm, then you likely haven't phrased it very well. That's like having to explain a joke.)

Of course Obama wants to expand government. That's the road he sees to reforming healthcare. Democrats in general want to expand government's role. I'm not saying it's a good or bad thing; it's just a fact. Ted Kennedy supported a larger government; so does John Dingell; so does Barack Obama. It's a fact.

Almost everyone supports government to some extent: Military, police, roads, Medicare, etc. The debate is always the extent and the role. It's a fair debate.

What I've asked -- and apparently you aren't prepared to answer -- is why does there need to be a tax hike to support healthcare reform? There are potentially reasonable answers, which may be beyond your grasp.

If you are a child, I can always hope you can grow up. If you are an adult, your contribution to the healthcare debate may be terminally limited.

Once again: Do you think there should be a tax hike to fund healthcare reform? If so, why?