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Monday, September 21, 2009

It Depends on Your Definition of a Tax

I confess that I didn't see much of the president this weekend. So, I won't make any large assessments of his performance and its effect on the health care debate. That said, what I have read and heard so far spells serious trouble for the president. I already analyzed the president's comments on ACORN. Now, Politico has a good article analyzing the mandates within the Baucus plan.

At issue is whether or not these mandates are in fact a tax increase. The president, of course, denies this, however this assertion is countered by the language in the bill. Here's the relevant language.

Page 29, sentence one of the bill introduced by Senate Finance Committee Chairman Max Baucus (D-Mont) says: “The consequence for not maintaining insurance would be an excise tax.”

And the rest of the
bill is clear that the Finance Committee does, in fact, consider it a tax: “The excise tax would be assessed through the tax code and applied as an additional amount of Federal tax owed."

There is a long exchange between President Obama and George Stephanopoulos in the article. I will let the audience click over and read it there. Also, here is full coverage of the interview from ABC.

The president's assertion that these excise taxes on anyone that doesn't get health insurance aren't really a tax goes like this. First, those without insurance cost those with insurance money and so there's already a tax in the system. Second, health insurance premiums are going up and so there's already a tax. Third, by forcing this mandate, we will have a healthier people and so that will bend the cost curve on health care and thus everyone will wind up saving money.

There is absolutely no way to test most of the president's assertions. Sure, health care premiums are going up. There's no way to know that the president's plan will stop that. Sure, those without health care are a strain on the system when they show up and get free health care services. Yet, there's no proof that the Obama plan will have any effect on health care costs. None of his statements can be tested. The only way we would know is by having the plan take effect and seeing what happens.

There is no doubt that his plan calls on an excise tax on both health insurance providers and those with the means but no insurance will be taxed if they continue that way. Those are taxes. Everything else is a theoretical point that can't be proven one way or another. In other words, the president would like us to disregard the tax that is clearly in the bill because in theory, there will be savings that the president hopes will happen as a result of the plan.

Furthermore, the President continues to compare this health insurance mandate to car insurance mandates. That's just silly. No one forces anyone to have car insurance. They merely force you to have car insurance if you have a car. No one is mandated to have a car. In fact, driving is a privilege and not a right. If you drive you must have car insurance, but no one is mandating that you drive. Health insurance is a mandate simply for living.

The president continues to get in trouble with this kind of language. He continues to lose credibility when he claims one thing and has a different outcome. He promised no more earmarks and then signed an omnibus bill with eight thousand earmarks. He promised no more lobbyists in his administration and then proceeded to exempt dozens from that rule. He promised to be open and transparent and then proceeded to block the release of numerous White House minutes.

In this case, he is guilty of promising something he simply has no hope of achieving. The president is determined to spend an unprecendented amount of money. Yet, he also proclaims that only the superwealthy will have their taxes rise. He also promises to tackle the deficit, sometime. Well, you can't spend unprecendent amounts of money, tackle the deficit, and also only tax the really rich. This isn't his fantasy but reality. The math doesn't add up. So, he's forced to claim that an excise tax is really not a tax. The public isn't buying and that's why opinion continues to slip.


Anonymous said...

But his numbers are increasing.

I'm starting to think the broken clock principle applies to your analysis. You always think the President is in trouble, you always think the President is unpopular, you always think the President doesn't represent the views of the American people, and you always think the next Reagan Revolution is *just* around the corner.

Its as pathetic as those Fox News wonks constantly predicting a bounce in Bush's approval rating that never came.

mike volpe said...

Which numbers are increasing? It isn't health care numbers that are increasing.

I said that the president was in trouble early on. Since then, he's done nothing to change my mind and things are only getting worse.

Frankly, I don't always say the president is failing. You just don't acknowledge those times when I compliment the president.

Anonymous said...

Almost all your articles imply that it is the end of the Obama Presidency or he is "on the brink" or if this issue doesn't work out in his favor then his Presidency is going down the toilet .

It's like, subconsciously, you so badly want it to happen that every minor story in the daily news cycle is another chance to play out that fantasy.

I don't think you spend a lot of time talking to political views different from yours. You are in your own world.

mike volpe said...

First of all, I try and find provocative titles because those get read more. Second, almost all my articles aren't any one thing. I write on a variety of subjects. Third of all, I recently wrote about my time with a local community organization. I just interviewed the Green Party candidate locally for another article. I examine every side.

Obama himself has said that if health care doesn't pass his presidency is in trouble. I don't think his whole presidency is over but it is until after November 2010 and at that point he would have to moderate. That's been my thesis for months. I haven't changed and nothing Obama has done has changed that.