Senate Majority Leader Harry Reid, D-Nev., recently said, "we must simplify and streamline our broken tax system ... so everyone pays his or her fair share -- including corporations."
President Obama never tires of calling for "shared sacrifice."
At roughly the same time, Neil Cavuto of Fox Business News reported that "More than half of American households (51 percent) pay no income tax."
His guest, Neal Boortz, added that many of the "poor," rather than paying federal income tax, instead receive checks from the federal government. So, in effect, the government is paying a reverse "tax" to the poor. Is this "shared sacrifice?"
So, what is the fair share that the "rich" should be paying? What is the fair share that corporations should be paying? What is the fair share the "poor" should be paying? But perhaps, more importantly, who gets to say what amounts to a fair share? And who gets to label someone as "rich" or "poor?"
Let's take a simple example. A single man makes $1 million a year on a device that he spent 10 years of his life inventing. What is the fair share he should pay in federal income tax: 20 percent; 40 percent; 60 percent; 90 percent?
And who gets to say so? People with comparable incomes? The 51 percent who pay no federal income tax? Congressmen who are elected by the 51 percent who pay no federal income tax?
Let's take a second simple example. A single man earns $10,000 a year? What is his fair share: 0 percent; 5 percent; 10 percent; 15 percent? And who gets to say so?
At the outset, I don't think it is possible for one who pays no tax to claim he is paying any "share," much less his fair share. When a person "shares" he gives a portion of what he has to another.
Giving your neighbor nothing is not "sharing." It's doing nothing. In Mark's Gospel, we have the story of a poor widow who put two coins worth a few cents into the temple treasury. Christ praised her because she gave from her livelihood, rather than from her surplus. Would He have done so if she had walked by and given nothing? Would that have been "shared sacrifice?"
Is a fair share nothingmore than a percentage? Or, does it take account of the efforts that the wage earner expended to earn his income? Does it take account of the fact that nobody else lifted a finger to help him earn his income? Does it take account of how hard the wage earner worked? His genius in earning the income? What he spent to educate himself to be able to generate the income he has achieved?
What is fair about a married couple earning $250,000 paying 35 percent of their income as federal income tax? Is it more or less fair to say they should pay 50 percent? Where is the line between "fair" and "arbitrary?"
And is it "fair" that someone who earns $10,000 a year, and receives a free public education, medical care and food stamps, should have a right to vote to increase his neighbor's income tax, if he pays no income tax himself. Is it "fair" for someone with "no skin in the game" to have a vote to raise taxes on whoever he labels "rich" without voting to raise his own taxes -- at least a little?
By the way, when does one become "rich?" Or is "rich" like "fair share" in the eye of the beholder?
In a democracy, the majority rules. And that is precisely what bothers me. Since the passage of the 16th Amendment, which authorizes Congress to lay and collect taxes, the courts have never deemed any income tax to be a Fifth Amendment "confiscation of private property for public use," so as to require the government to pay "just compensation" for the "taking" (via taxation).
With the passage of the 16th Amendment, the only "check" upon the government setting income tax rates on the "rich" at 75 percent or even 99 percent, or determining that anyone with an income as small as $25,000 was "rich," has been the fact that everybody paid some tax, and that nobody liked paying more taxes.
Now that 51 percent of "taxpayers" pay no taxes, it is not going to take long before they figure out that it is in their best interest to elect congress and a president who will tax the "rich" at higher and higher rates, and who will insure that those who pay no taxes will be left alone.
The income tax will clearly be shown to be what it is fast becoming: a legal system for plundering your neighbor. As long as everybody is adversely affected by tax increases, there is a practical, if not constitutional, "check" on taxes being raised: self interest. But once 51 percent of the people believe they are unaffected by tax increases on their "wealthy" neighbors, that "check" is gone.
So, as the Internal Revenue Service morphs into the Income Redistribution Service, there is at least some good news:
We will still be able to call the tax collector the IRS.
Posted Online: July 20, 2011, 2:51 pm - Quad-Cities Online
by John Donald O'Shea
Copyright 2011, John Donald O'Shea
Thursday, July 21, 2011
Thursday, July 7, 2011
How Long Can Illinois Physicians Afford to See Medicaid Patients?
In 2010, Illinois spent $15.5 billion to provide medical care for the poor, according to a recent Associate Press article. (Up from $7.5 billion in 2000.)
The U.S. Census Bureau says that the 2010 Illinois population was 12,830,632. By simple division, the average cost to each resident of Illinois to pay for medical care for the poor is $1,200 per year.
The same said that under the budget passed by the Illinois Legislature, doctors and hospitals have been promised virtually the same fees for services rendered to those on Medicaid that they had received during the prior year. But the amount budgeted to pay for those fees is $1.2 billion short.
The shortfall, however, is only part of the problem. In addition, there are $6 billion of overdue and unpaid medical bills from prior years. Therefore, next year at this time, it appears that there will be $7.2 billion in unpaid medical bills.
Doctors and hospitals will have to wait longer to be paid. A spokesman for the governor suggests a 30-day payment wait might be expected to increase to 120 days.
But is that for "new" bills, or for the bills already six months overdue? In light of this, what can the doctors and the hospitals say other than, "It's better to be paid money eventually, than not to get it at all."
But if doctors and hospitals know they will get paid "eventually," and "eventually" gets 20 percent longer each year, how long will it be before the doctors and the hospitals can no longer wait for "eventually" to happen?
When you buy food from the grocery store and eat it within a few days, it's a little unfair to promise the grocer you will pay him in six months or so. If your grocer is required to pay within 30 days for the meat and potatoes he sells in his store, how is he going to pay his supplier and employees if you don't pay him?
When I was a boy, our family doctor was Dr. Cahill. I don't ever recall going to his office, but I recall him making a house call when I got the chicken pox. But medicine has changed.
Today the practice of medicine is more complex. The doctor is assisted by a clerk/receptionist, an office nurse, a scheduler, an insurance billing assistant, a Medicare billing assistant, etc.
These employees all have to be paid, and the doctor doesn't have the luxury of telling his staff he will pay them in six months or whenever he "eventually" gets paid by the State of Illinois.
When a doctor is forced to wait six months to be paid for seeing Medicaid patients, he had better have a sufficient number of privately insured patients to allow him to meet his employee payroll, to pay for his malpractice insurance, to pay the rent on his office, to pay himself a reasonable salary, etc.
If he doesn't, he won't be in business when "eventually" finally comes. I don't think Dr. Cahill faced these problems.
I think it is fair to say that the state's ability to pay doctors and hospitals isn't going to improve as long as the economy remains in the doldrums, and tax revenues remain low. But then, what happens when Obamacare kicks in?
What happens to those doctors and hospitals who, because of private insurance payments, are now able to wait six months to be paid for services rendered to Medicaid patients?
If doctors' revenues fall sharply, what does that do to their ability to see Medicaid patients, and wait months to be paid? If doctors has to see more non-Medicaid patients (because those patients no longer have private insurance) to keep their revenues at pre-Obamacare levels, does this mean that the doctors and the hospitals will have less time to see Medicaid patients?
I don't know. But if a doctor is used to a certain level of income, and what he can charge patients is reduced, he will need to see more patients to generate the same income. And I suspect, that means, he will be able to see fewer of the poorest patients.
Especially, if the state cuts fees paid, or turns "eventually" into something even longer.
Posted Online: July 6, 2011, 2:53 p. m. - Quad-Cities Online.com
By John Donald O'Shea
Copyright 2011
John Donald O'Shea
John Donald O'Shea of Moline is a retired circuit court judge.
The U.S. Census Bureau says that the 2010 Illinois population was 12,830,632. By simple division, the average cost to each resident of Illinois to pay for medical care for the poor is $1,200 per year.
The same said that under the budget passed by the Illinois Legislature, doctors and hospitals have been promised virtually the same fees for services rendered to those on Medicaid that they had received during the prior year. But the amount budgeted to pay for those fees is $1.2 billion short.
The shortfall, however, is only part of the problem. In addition, there are $6 billion of overdue and unpaid medical bills from prior years. Therefore, next year at this time, it appears that there will be $7.2 billion in unpaid medical bills.
Doctors and hospitals will have to wait longer to be paid. A spokesman for the governor suggests a 30-day payment wait might be expected to increase to 120 days.
But is that for "new" bills, or for the bills already six months overdue? In light of this, what can the doctors and the hospitals say other than, "It's better to be paid money eventually, than not to get it at all."
But if doctors and hospitals know they will get paid "eventually," and "eventually" gets 20 percent longer each year, how long will it be before the doctors and the hospitals can no longer wait for "eventually" to happen?
When you buy food from the grocery store and eat it within a few days, it's a little unfair to promise the grocer you will pay him in six months or so. If your grocer is required to pay within 30 days for the meat and potatoes he sells in his store, how is he going to pay his supplier and employees if you don't pay him?
When I was a boy, our family doctor was Dr. Cahill. I don't ever recall going to his office, but I recall him making a house call when I got the chicken pox. But medicine has changed.
Today the practice of medicine is more complex. The doctor is assisted by a clerk/receptionist, an office nurse, a scheduler, an insurance billing assistant, a Medicare billing assistant, etc.
These employees all have to be paid, and the doctor doesn't have the luxury of telling his staff he will pay them in six months or whenever he "eventually" gets paid by the State of Illinois.
When a doctor is forced to wait six months to be paid for seeing Medicaid patients, he had better have a sufficient number of privately insured patients to allow him to meet his employee payroll, to pay for his malpractice insurance, to pay the rent on his office, to pay himself a reasonable salary, etc.
If he doesn't, he won't be in business when "eventually" finally comes. I don't think Dr. Cahill faced these problems.
I think it is fair to say that the state's ability to pay doctors and hospitals isn't going to improve as long as the economy remains in the doldrums, and tax revenues remain low. But then, what happens when Obamacare kicks in?
What happens to those doctors and hospitals who, because of private insurance payments, are now able to wait six months to be paid for services rendered to Medicaid patients?
If doctors' revenues fall sharply, what does that do to their ability to see Medicaid patients, and wait months to be paid? If doctors has to see more non-Medicaid patients (because those patients no longer have private insurance) to keep their revenues at pre-Obamacare levels, does this mean that the doctors and the hospitals will have less time to see Medicaid patients?
I don't know. But if a doctor is used to a certain level of income, and what he can charge patients is reduced, he will need to see more patients to generate the same income. And I suspect, that means, he will be able to see fewer of the poorest patients.
Especially, if the state cuts fees paid, or turns "eventually" into something even longer.
Posted Online: July 6, 2011, 2:53 p. m. - Quad-Cities Online.com
By John Donald O'Shea
Copyright 2011
John Donald O'Shea
John Donald O'Shea of Moline is a retired circuit court judge.
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