Monday, January 26, 2009

Heinlein inverted

The worst part of Pres. Obama's tax plan is that it will create a huge class of non-taxpayers. By most estimates, if his tax "cuts" are enacted (and the majority of the most crucial cuts are credits to people who pay little or no tax), then the result will be that more than 50% of the working population will not pay income tax. But the minority of workers who do pay the taxes that help fund the country will be supporting the non-payers' use of an expanding supply of government benefits and services, especially medical care.

This is a recipe for disaster.

The majority who would pay no income tax would not support policies that make them do so, they want to eat their cake and still have it. The minority would continue to get soaked for an ever-increasing amount as Social Security obligations come due to the Baby Boomers (aka The Useless Generation). And the minority would lose the political ability to alter this reality because the non-payers would control who gets elected and re-elected.

Without some first-hand knowledge of what your imposition upon society costs, you will impose more and more. Thus, the failure of TennCare, the single-payer health care solution for Tennessee that sent the state into debt because the TennCare participants had no co-payment obligation and routinely used emergency services for even the most simple non-emergency health issues. Similarly, Massachusetts' insure-everyone plan is a complete failure because there are no evident costs to the people who don't pay for their insurance and can use their benefits repeatedly. Even a minor co-pay makes the rational economic actor realize that there is a price for what he does -- will I use my $10 to get a checkup for my sniffles or just go buy some generic Comtrex and have $4-6 left over for lunch? The wisdom of having a nominal payment is clear: everyone has a stake in the system and everyone has to pay some price to participate.

In the Hugo-award winning novel Starship Troopers (ignore the movies, they're rubbish), only veterans can vote. They sacrificed part of their lives for the country, they had to protect the country from its enemies, they get the reward of the franchise. That logic is not impeccable, but it's better than Obama's plan to create a majority of Americans who contribute nothing or less to the cost of the nation's various programs control the future of the country.

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