The title, of course, is a shot at Democratic Senator Al Franken (no accounting for the insanity of Minnesota voters)--as well as an "affectionate" shot at Limbaugh. Limbaugh is no lonter fat, and never was an idiot.
But Limbaugh let partisan rhetoric lead him into serious error in his discussion of the health care plan today. He was absolutely correct in stating that Obama and the Democrats are taking dead aim at small business. Limbaugh just got tangled up in explaiing WHY that is so.
Limbaugh made the "error" (which assumes that he did not fully know what he was doing, as leftist Democrats so often fullyknow how they are misrepresenting the truth--Obama being a prime offender here) of saying that most Subchapter S corporations make more than $280,000. That is false--a LIE, if you want to call it that. Limbaugh asserted that Subchapter S corporations pay taxes on "GROSS "earnings" (revenue), rather than net. That is FALSE--simply not true. Individuals electing Subcahpter S status fro their "small" corporations elect to be taxed as if they were not operating as a corporation, provided that they are taxed on the NET income of the corporationi (their pro-rata share) as if they had received the money, whether they actuallly received it or not (income might be reinvested in the corporatioin, but, in reality, this is not much of a practical problem for most people with even half-way competent accountants). Nevertheless, it is still NET INCOME that is taxed, and not gross. Limabugh was exactly wrong to accuse Democrats of lying when they asset that most small businesses do not earn $280,000.00. That is exactly correct. I would note that this blog never makes this kind of elementary mistake (except in typos), mainly because I do not let partisan rhetoric lead me into this kind of "error".
If "small businesses" are not going to be subject to this "sur-tax" on the "rich" the House Democrats are proposing, as most will not be, what is the problem? Well, let us start counting the problems.
1. The "sur-tax" is going to HURT employment as unemployment is heading above 10%. As Paul Rodriguez reminded environmentalists in California, without farms there are no farm workers. The proposed sur-tax would directly take money out of the private economy--from the most successful small business, and others, just at the time the econlmy can least afford it.
2. The democrats are proposing to REQUIRE employers to provide health insurance. You may think you know that that means. You don't. What KIND of health insurance? Is the government going to requirfe every business to provide "cadillac" health insurance? That is DEATH to many small businesses, who may be providing health insurance with large deductibles, or otherwise controlling costs. In other words, are employers going to have to provide at least the equivalent of the "government option"? Can employers tell their employees to elect the government option? Yes, this provision is presently targeted at businesses with over 400 employees, WHETHER THEY MAKE ANY MONEY OR NOT, and those are the "samll" businesses that are providing the most jobs--and where higher costs will cost the most jobs. My brother's trucking company, Shipper's Transport, employed 500 people when he took it over. My brother says this provision would have KILLED his company, because it provides for an 8% payroll tax PENALTY for every such employer who does not provide health insurance. This is a land mine field of of traps for businesses, big and small (the very big businesses, like Wal-Mart, have not problem with it because it hurts their smaller COMPETITORS more than it hurts them). In other words, the government is surely going to TELL employers what health insurance they HAVE to offer, and to the extent the coercion is not sufficient, it will be INCREASED until emplopyers SCREAM (as they already are). Then what will happen? Right. We will get an entirely government system, which is the goal here. In the meantime, the econominy will suffer (losing jobs). This is the central planning problem: ONE size fits all, and coercion is the name of the game. Yes, individuals will HAVE to buy insurance, if they do not get it from employers. Again, what KIND of insurance? Deductibles? Coerage? The media assumes that everyone means the same thing by "helath insurance". That is only true in a CENTRAL PLANNING system, where the government is mandating that there be only one kind of insurance. It is absurdly stupid for the government to try to take over the health care system this way, and most people know it.
3. This "sur-tax" on even people earning more than $1,000,000.00 WILL NOT RAISE ENOUGH MONEY. That sur-tax "raises" $50,000.00 for each person with more than a million dollars in INCOME. That is supposed to pay for health insurance for people who cannot afford it, along with the lesser sur-tax on people with incomes starting at $280,000.00. How much does it cost for a government accepted health insurance plan? $10,000.00? Surely not much less. That means that the extra tax on people earning one million dollars will take care of FIVE people. Okay, say it takes care of TEN people. Even assuming that people with present incomes of over one million dollars do not figure out how to AVOID this tax (and the other rising income taxes on their income--such avoidance being one reason such taxes generally RAISE NO MONEY), there are not enough people earning that much money to pay for the coverage for the other people. Hence, you see why there is this REQUIREMENT that employers provide health insurance. It still will not be enough. This is a disaster waiting to happen, at a time when can least afford it.
4. When you combine the econoomic impact of the extra taxes with the tax avoidance induced by all of these extra taxes (this sur-tax being only one of the many extra taxes proposed for the "rich" in the Age of Obama), NO EXTRA MONEY WILL BE RAISED TO PAY FOR THIS EVER EXPANDING "ENTITLEMENT".
5. This entitlement WILL expand, and is intended to expand. Democrats want Michael Moore style, "single payer", universal health coverage. Yes, that will be a central planning nightmare that will ruin both our health care system and our government. But it is not much more of a nightmare thann the absurd mish-mash of a central plannning system that the Democrats are trying to foist on us. Democats are using absurd ten year projections for a plan not intended to last ten years. Employers alone are going to start SCREAMING (as stated above). The intent is for people to demand a total government system And that will happen. In the meantime, our economy will be further destroyed (if any is letft after the "global warming", "cap and trade" tax). This is a Soviet style "ten year plan" INTENDED TO FAIL--intended to fail in a very specific way that results in a total Federal Government takeover of health care.
6. Just why is it necessary for the Federal Government to mandate all of tis? Has the Federal Government shown the ability to operate efficiently on this kind of scale? There is no "crisis" in health care in this country. Health care is pretty darn good. The poor are covered (in a Medicaid program going broke). The elderly are covered (in a Medicare program going broke). People have "universal health care", in the sense no one is turned away from a hospital emergency room. Why mess this up with a disaster from which we cannot recover--a central planning disaster when we KNOW central planning does not work, and cannnot work. Health care insurance mandated by unions (who thought their members were not "payiing" for it) is "credited" with dooming General Motors. Why should anyone trust the government to tell businesses what kind of health care insurance they have to offer? Still less should we trust the government to take over the entrie health care system (the ultimate goal here).
7. The cost of this kind of Federal program is ALWAYS underestimated, and the revenue to pay for it (see above) is ALWAYS overestimated. This leads to a never ending spiral of more an dmore taxes on an ever expanding number of people as it becomes obvious that it is impossible for the "rich" to pay for everone else to have everything they want.
Did I say the Republicans were much better here? They aren't. As best I can tell, their "plan" is WELFARE for the middle class, providing $5700 for every family to buy health insurance. What about employers? Will not every employer tell peple to use that money, and get out of providing employer insurance? Is that the Republcan GOAL, or do they want to mandate eemployer insurance too? Republicans plan to give a TAX CREDIT, with NO ONE to pay any more taxes (although the rich will not get any net tax benefit). You say you thought Republicans were against increasing the deficit? YOU FOOL!!!!!!!!!!!! What ever made you think that.
The first, second and third optiions here are to DO NOTHING. Wait until we are out of the recession, and then we MIGHT consider tinkering with the margins. Really, the best thing to do is to go back to federalism, and let the "pay as you go" because they can't print money, except for the doomed attempt by California) decide how to handle health care in each state.
Yes, I am going to "out" my brother--the former truck company owner--here. My brother agrees with me that both TORT REFORM (Republicans also believe in central planning) and health care insurance regulations can be handled by EACH STATE. My brother says: "If the 12 non-government employees in Montana don't like their state's plan, they CAN MOVE. Then we will just have one less state." Now you people who live in Montana, or just like Monatana, DO NOT BLAME ME FOR THIS ONE. This was MY BROTHER (who also said: "There is a good reaons Monatana has no speed limit. They don't have enough people to put in police cars to enforce one.") Okay, people of Montana, go lynch my brother. But the point is valid (not about Montana, but about states beind different, and having the option to MOVE if you don't like your state). Why have ONE approach, when you can have 50. You say that why have 50 approaches, when one is the best one? That is the central planning DELUSION? How arrogant are you, Obama, the Democrats, and the mainstream media, to assume that you KNOW the ONE right apporach? All you have to be is wrong ONCE, and the game is over. YOU LOSE. That is not true in the free market, and it is not true in federalism. People are fallible. They make mistakes. The problem with central planning is that a mistake spells DOOM.
Nope. Rush Limbaugh is not an idiot. He is fundamentally, instinctively right. The Democrats really are out to destroy small business in this country. They want economic fascism: that central lplannng partnership between Big Government and Big Business. Then they want Big Government to dominate that partnership. I just wish Rush would not let his partisan zeal lead to falsely overstating his case. The case aginst Federal "health care reform" is overwhelmingly strong without any exaggeration using "dramatic license" (borrowing the license from Obama and other leftists).
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