The health care mess and tax reform failure
Posted June 28
We are in the doldrums of an extremely hot and humid Washington, D.C., summer. The Senate is dealing with its version of the health care bill, but even when its been voted on it will still have to get House concurrence. Unfortunately, the health care debate will drag on into the haze of July and early August when Congress will take its recess.
Having spent 22 years in Congress, I have long been an advocate for Congress to be more active and to take a lead as the Constitution provides it should. However, Congress is doing very little these days. It has made a mess of the health care debate and its promises of tax reform.
On health care, it would be better for President Trump and the congressional Republican leadership to release a surrender statement saying that “we campaigned to repeal Obamacare, but never proposed a substitute. Having come into office on the mantra of repealing Obamacare, we now feel compelled to do that. But, as time has evolved we realize that the people essentially want to keep the basics of Obamacare. Therefore, we are merely going to make a semantical change in the name of the program and basically keep it unchanged.”
As occurred with Medicare, which we old guys enjoy so much, the American people have come to expect universal health care insurance/coverage. Congress may technically repeal Obamacare, but it will keep almost everything in it with maybe some adjustments on Medicaid — which isn't really a part of Obamacare. All this will be enormously expensive, which tragically will be added to the national deficit.
To continue this bleak assessment, Congress will not pass tax reform this year or in next year’s midterm election. We will never have real tax reform until the starting point includes eliminating all tax deductions — the revenue lost from these deductions is huge. The Trump plan (and most Democratic plans) retains church, charitable, educational and home loan deductions. Once you give one man his favorite tax deduction, you have to keep them all, because that is how the political system breaks down.
One cannot get elected to any office in the United States if you are not for the church/charitable tax deduction. In the Judaic-Christian biblical tradition, our forefathers (and foremothers) suggested a tithe of 10 percent be donated to one’s church. If it is deductible, a rich man is probably getting at least a 50 percent reduction in his taxes for his contributions. A poorer man or a man who chooses not to contribute to a church or charity gets nothing, and that is not fair. And finally, many churches and charities are today doing things that private enterprises pay taxes on, such as essentially running health clubs, restaurants and other businesses.
Americans are a very generous people. We have more donators per capita than most countries. I believe it is in large part due the very generous deductions that are available. However, it also means an immense revenue loss for our federal government.
Thus, the only way we will have tax reform or adopt an ad valorem system is to eliminate all deductions. So for now, Congress will not pass tax reform. It might pass little amendments, but our country needs a new, simplified tax code and we won’t get it until we eliminate charitable deductions and deductions for home loans. But, in a country where “a man’s home is his castle,” woe to any politician that suggests eliminating the home loan deduction. In fact, we even have it on additional vacation homes which is truly a tax break for the very rich.
Thus, as we move forward in this hot summer, the two biggest items before Congress, health care reform and tax reform, are stalled. Next year, the excuse will be that it is an election year.
We need a more productive, effective Congress, but we will only get that with a more enlightened, demanding citizenry that works at nominating and electing good candidates. A “do nothing” Congress springs from a lazy “do nothing” electorate. All those who want to resist, demonstrate or “make themselves heard” can start now by working for their local precincts to support issue-oriented candidates who will work on specific issues to get elected in 2018. It’s unglamorous, exhausting work, but it is what we must do to improve our Congress. The current mess in health care reform and tax reform both spring from citizens who will not participate in demanding issues-oriented campaigns.