The GOP Senate Tax Bill Takes Two Rights and Makes a Wrong

Big Insurance will be the chief beneficiary of scrapping the Obamacare mandate

The Senate tax bill cuts corporate tax rates and scraps Obamacare's individual mandate. Those are both noble ideas. Yet the bill sucks. Why? Not

Albin Lohr-Jones/ZUMA Press/Newscom

because the corporate tax cuts are corporate welfare, as liberals claim. That'll only bring America's taxation levels in line with the rest of the civilized world's.

But there are other parts of the bill that turn it into an early Christmas present for Big Business.

Eliminating the individual mandate will result in 13 million mostly young and healthy Americans quitting their coverage. This will leave the Obamacare exchanges with a sicker population facing premium increases of an additional 10 percent annually, the CBO estimates. It might even put some of the exchanges in a death spiral of adverse selection.

There is a good and bad way to handle this problem. The good way is by deregulating the exchanges so insurers can offer cheaper packages and also by looking for ways to let patients control their own health care dollars. The bad way is throwing more money at insurance companies.

Guess which one Republicans chose?

Go here to read the piece.

Comments

[Just Say'n]

Big insurance will benefit most by eliminating a mandate forcing you buy their product?

That. Makes. No. Sense.

And the opposition to eliminating the individual mandate is a strange position for an ostensibly libertarian-ish publication to be taking

[Rhywun]

The Senate tax bill cuts corporate tax rates and scraps Obamacare's individual mandate. Those are both noble ideas.

Not sure which article you're reading.

[Just Say'n]

"Eliminating the individual mandate will result in 13 million mostly young and healthy Americans quitting their coverage. This will leave the Obamacare exchanges with a sicker population facing premium increases of an additional 10 percent annually, the CBO estimates."

You either. Retarded or Nick Gillespie?

[Just Say'n]

"Big Insurance will be the chief beneficiary of scrapping the Obamacare mandate"

This too

[BYODB]

It's because Dalmia thinks those are 'noble' but essentially impossible goals I.E. she thinks forcing people to do things is better because she thinks that works. Dalmia is only 'libertarian' in comparison to the government of India. She really has no place at Reason as anything other than a foil for other authors.

[Rhywun]

Let's focus on the scrapping of ObamaCare's mandate that all Americans obtain health insurance or pay a fine. This has always been unjust. It represents Uncle Sam crossing a hitherto unviolated ? and inviolate ? line, forcing Americans to buy something against their own wishes and better judgment.

I'm still not getting where she opposes ending the individual mandate. I guess I'm retarded.

Also, she opposes throwing money at "big insurance" because that is a chief cause of out-of-control prices.

[BYODB]

Dear God Rhywun, you clicked through the link didn't you. DIDN'T YOU!

Don't feed the Dalmia.

[Zeb]

Better that we all just criticize her article without reading it.

[BYODB]

Exactly! ^_-

[Zeb]

I don't see any opposition to eliminating the individual mandate there either.

[Just Say'n]

"Eliminating the individual mandate will result in 13 million mostly young and healthy Americans quitting their coverage. This will leave the Obamacare exchanges with a sicker population facing premium increases of an additional 10 percent annually, the CBO estimates. It might even put some of the exchanges in a death spiral of adverse selection."

I guess I imagined this passage

[Zeb]

Is that not a valid observation?

I oppose the mandate, but I think that what she says in the passage you quote is likely what will happen if it is eliminated without any changes to the exchanges or guaranteed issue rules.

Are you going to tell me that I oppose eliminating the individual mandate now?

I don't know what Dalmia thinks about the exchanges, and agree with pretty much everyone that she's Reason's worst contributor. But all I'm seeing here is a policy analysis that seems at least plausible, not an opinion on whether the individual mandate is good.

[Just Say'n]

So before eliminating government overreach should we first assess what the results of eliminating such overreach will be?

In that case how can the size of government ever be reduced?

[Chinny Chin Chin]

So before eliminating government overreach should we first assess what the results of eliminating such overreach will be?

Yes. No matter whether a govt. social program is over-reach or justified-and-needed, ending that program will likely lead to people suffering financial shortfalls. Understanding how other societal institutions will have to adjust to make up for the absence of government is an essential step to creating a realistic plan.

In that case how can the size of government ever be reduced?

Reassuring people that grandma will NOT be eating cat food in the streets is a good way of winning acceptance for the idea of shrinking government.

[Hail Rataxes]

So before eliminating government overreach should we first assess what the results of eliminating such overreach will be?

No, we should pretend we have no idea what will happen, because that's what the cool kids would do.

Jesus, you've quickly become one of the most retarded commenters here, which is a major achievement. Congratulations.

[Zeb]

So before eliminating government overreach should we first assess what the results of eliminating such overreach will be?

Yes, we should do that. It's a good thing to look at the predictable results of policy changes, even if it doesn't make your position easier to sell to some people.

In that case how can the size of government ever be reduced?

If I knew how to do that (practically and politically speaking) I wouldn't be sitting here like an asshole arguing about trivial stuff on the internet.

I don't like the individual mandate. I also don't like what is likely to happen if it is repealed. I'd still repeal it on principle, but I don't think the response to the exchanges falling apart is going to be less government involvement in health care. Seems more likely that it will be more.

Now if Republicans had the balls to just repeal Obamacare completely without worrying about replacing it with something equally dumb, we might get somewhere. Or we might see an electoral swing back towards Democrats and get something much worse.

I don't know what's going to happen, but it seems to me these things are worth considering even if they don't really change my own policy preferences.

[BYODB]

The thing is that Dalmia phrases things in such a way as to provide the illusion that if not for the repeal than those other things wouldn't be happening RE: Death spiral, adverse selection, etc.

Those things are guaranteed to happen, and if she's only just now figuring that out she doesn't show much sign of it here. And no, I refuse to click through and read an entire Dalmia article. I've been fooled too many times, and the odd's of this time being her 'come to Jesus moment' seem's pretty unlikely.

I don't know what Dalmia prefers as far as a policy, but judging by her writing it's not the forcing people to get health coverage that she has a problem with. It's the ending of it that she appears to be warning us against.

The good way is by deregulating the exchanges so insurers can offer cheaper packages and also by looking for ways to let patients control their own health care dollars.

The very fact that the exchanges only exist because of regulation appears entirely lost on Dalmia. Note that she also wants us to look for ways to let patients control their own health care dollars in the same sentence. She's an idiot, which is why it's so hard to figure out her position.

[BYODB]

What Dalmia is actually saying is that repealing the mandate will hurt the people in the exchanges by allowing even bigger increases to occur because there won't be people there to shoulder their burden for them.

This will leave the Obamacare exchanges with a sicker population facing premium increases of an additional 10 percent annually, the CBO estimates.

Yeah, and guess what? It's going to get a lot worse because community rating and guaranteed issue fail literally every time they are attempted. Not repealing those bits is crazy, but still not as insane as making it into federal law in the first place.

All people like Dalmia talk about is a difference in the rate of failure, and you know why? Because it's definitely going to fail, they just want a slow and gradual failure. I imagine Dalmia also wants to import lots of labor to subsidize the program, too, because you can't have even a pretend redistributionist state with a declining population.

[Just Say'n]

Yeah, but her premise makes no sense. If the markets have sicker people and less healthy people, price goes up because cost has gone up. She is suggesting that this is some kind of giveaway to insurance companies when the individual mandate was a giveaway to these companies

[BYODB]

Yeah, it doesn't make sense but if you know Dalmia it makes perfect sense. She's an idiot, first and foremost, and is only published in order to make the rest of the Reason staff seem more libertarian by comparison.

She isn't a libertarian of any stripe, she's a statist that believes in slightly lighter chains.

[Zeb]

Aren't most libertarians statists that just want less state?

[BYODB]

Maybe, but for Dalmia individual freedom doesn't seem to be her primary issue. She's more of a classical liberal with progressive tendencies. So not totally hostile to freedom, but rather selectively in favor of freedom when it involves a choice she thinks is proper.

Not too different from most of those in Congress, I'd say.

[Zeb]

Yes, I agree about Dalmia.

But in this case, I don't think her analysis is completely terrible.

[Just Say'n]

Your bending over backwards to defend nonsense.

Shikha says "individual mandate is bad, but if you repeal it now that will be worse"

Zeb and Rhywan: see, she opposes the individual mandate

Yeah, in principle, but she says to repeal it would be bad. So, if someone said 'yeah, we should reform the criminal justice system, but if we do that now with the increase in crime, things could get worse'. The mental gymnastics that occur to defend Shikha are beyond dumb

[Zeb]

I'm not defending anything. I just disagree with your interpretation.

[Rhywun]

You said she opposes ending the individual mandate, so I pointed out a couple sections in the article that directly contradict this.

That is all. I am not playing 'mental gymnastics to defend Shikha'.

[Square = Circle]

Claiming that it's a giveaway to "Big Insurance" is bizarre and comes off as just a Progressive shibboleth.

Pointing out that getting rid of the individual mandate without getting rid of guaranteed issue is sensible, precisely because while it's a violation of an individual's rights to force them to buy insurance, it's also a violation of an individual's rights to force a corporation (a collection of individuals) to "insure" people who already have known costs.

Simply getting rid of the individual mandate by itself, while good on feels, exploits the latter group for the benefit of the former.

Both need to go, or neither. So - both.

[BYODB]

Both need to go, or neither. So - both.

Sort of true, except for the bit where even if the mandate is kept the whole thing will eventually go into a death spiral. It's a when, not an if, and I haven't seen anyone bother mentioning that.

Now, if the government wants a 'penaltax' with actual teeth or something else to absolutely be sure 100% of the population is in the exchange, no matter what, they could likely extend the life of the program but it will inevitably fail.

There isn't enough money in existence to make such a scheme work, merely different ways of arranging the failing pieces to make people like Dalmia pretend that some combination of pieces will result in a larger whole.

Undergirding those opinions is a belief that centralization can work, even if they question that the current arrangement of pieces might not be the Utopia they envision. That's about as far as most pundits are willing to go on the left.

[Square = Circle]

Undergirding those opinions is a belief that centralization can work, even if they question that the current arrangement of pieces might not be the Utopia they envision.

Which is why the Republicans either need to scrap the whole thing entirely (like they promised they would) and massively deregulate the medical sector, or do their actual best to implement Obamacare as written without fucking with particular provisions.

Team Blue is already blaming Team Red for Obamacare's failures when Team Red hasn't actually even done anything yet.

If Republicans just get rid of the individual mandate without touching guaranteed issue, then when it fails sooner rather than later Republicans and free markets will take the blame as people like Dalmia scream about Big Insurance. At that point we'll inevitably wind up with Single Payer.

[BYODB]

Which is why the Republicans either need to scrap the whole thing entirely (like they promised they would) and massively deregulate the medical sector, or do their actual best to implement Obamacare as written without fucking with particular provisions.

On this, I would absolutely 100% agree. Either recognize it's a problem now and avoid it, or double-down and make the other side play by their own idiotic rules. Sadly, option #2 hurts a lot of real people and option #1 is clearly never going to happen.

It's the worst of both worlds, otherwise known as a bipartisan compromise without being called as much because admitting to it would cast both sides in a negative light to everyone rather than just their true believers.

[Ornithorhynchus]

That has got to be the worst case of Hepatitis I've ever seen.

[some guy]

That'll only bring America's taxation levels in line with the rest of the civilized world's.

We should nationalize health care to bring our health care system in line with the rest of the civilized world's. See, this argument is always terrible and should never be made. The rest of the civilized world gets a lot of things wrong. Instead, say that lowering corporate taxes will incentivize productivity and investment, growing capital and improving quality of life. It will keep money in the hands of the people who earned it and are most efficient at expending it.

[ipatrol]

It could also be argued that since America is a large and very attractive market for corporations, that we can have a higher corporate tax rate, because we're essentially charging a premium for the benefits of operating here.

[Tony]

There's no evidence that lowering corporate taxes (from 0% to 0% in many cases if we're talking effective) will incentivize anything socially useful.

Why is it that throwing money at wealthy people and entities is supposed to incentivize them to help society out, but giving money to poor people is considered encouraging of bad social outcomes (women and booze!)?

[Rebel Scum]

from 0% to 0%

Holy shit. Does Tony actually realize that corporate taxes are actually a cost transferred to consumers???

throwing money at wealthy people

I had high hopes, but it appears not.

socially useful.

Fuck off, slaver.

[MarkLastname]

There are mountains of evidence actually that lower corporate tax rates coincide with higher growth and wages. By all means keep lying though.

[Tony]

Show me a pebble of evidence.

But I'm glad you admit that this is being justified by referring to social engineering. Guess they just can't say "I wan't more money and don't want to have to do any innovation other than buying off politicians!"

[Square = Circle]

Guess they just can't say "I wan't more money and don't want to have to do any innovation other than buying off politicians!"

You don't ever actually listen to anyone else at all, ever, do you.

[Tony]

Tony's daily pearl of wisdom for Monday Dec. 4:

Justifying tax cuts because they will allegedly result in more hiring and economic growth is every bit of a social engineering program as Medicare.

That it doesn't work and is a giant con is incidental.

[BYODB]

So if people keep more of their money, your contention is they will place those extra dollars into mattresses.

Seems legit.

[Square = Circle]

So if people keep more of their money

That's the fundamental point where Tony's paradigm is absolutely different from anyone else here.

To Tony, money comes from the government. The only question is who "We" give it to - rich people or poor people.

Rich people, obviously don't need it. Duh!

[BYODB]

Well, to give Tony at least some credit he's also gravely misinformed on basic economics and human psychology as well. It takes effort to be that wrong. You need to read just enough to know some buzzwords, but not so much as to actually learn anything of real value.

[Tony]

That's a kind of pointless semantic debate. What we should be able to agree on is that defense, roads, bridges, etc. cost money, and if you're not paying enough taxes then you're using those services for free. Like dining and dashing. Surely we can agree that, even if you want to stop paying for all those services, fiscal responsibility demands that we cut the programs before we cut the taxes that pay for them.

[BYODB]

...and if you're not paying enough taxes then you're using those services for free

Odd that you appear to have absolutely no problem whatsoever with half the U.S. population paying either zero or effectively negative taxes then. I don't recall ever seeing you mention that before. Yet I see you call for 'the rich', who pay 80% or so of all income taxes, to pay more.

So no, I don't think you do agree to that.

[Tony]

Look at the super smart libertarian confusing the federal income tax with all taxes. It must be a day of the week. Bonus banality points: the rich pay most of the income tax (because they have a vast share of the income).

[Square = Circle]

if you're not paying enough taxes then you're using those services for free

So - you believe that people should receive only those services that they themselves pay for?

So - would you agree that fee-based toll roads would be better than government-provided roads paid for through progressive taxation?

Would you agree that education should be funded entirely through voluntary, private means?

You just have no idea what it would mean to present an internally coherent argument, do you?

[Square = Circle]

All I'll waste my time saying is that the point is, as usual, lost on you.

[BYODB]

If you haven't found any evidence, Tony, it's because you literally haven't looked.

[KDN]

You could try doing a little research. The most generous assumption is that 70% of the cut goes to workers, though skeptics claim it will be more like 20% in this instance.

Like most deficit-financed activities you're looking at a definite short-term benefit with long-term consequences which are potentially disastrous. Whether you think the trade-off is worth it almost entirely depends on your political affiliation and that of the party pushing the policy.

[Tony]

So it's being justified as economic stimulus when the economy is doing OK, corporate accounts are doing fantastically, the stock market is well into record territory, the economy is at full employment, but the remaining persistent problem is stagnant wages. By the logic employed, corporations should already be spending on increasing wages, if that's what's supposed to naturally occur when they have lots of cash laying around. What difference will it make when it's in the form of a tax cut?

[KDN]

the economy is doing OK
Just OK ain't gonna help us pay off that debt, and economic anxiety is still through the roof.

corporate accounts are doing fantastically
but a significant portion of that money is not being brought back into the US, mainly because of tax reasons

the stock market is well into record territory
Partly (mostly?) on the strength of assumptions of a giant corporate tax cut soon to come into effect

the economy is at full employment
With a LFPR similar to what it was when mothers defaulted to homemaking.

but the remaining persistent problem is stagnant wages
A problem which will not be solved by leaving the corporate tax rate alone. There's ample evidence of that, as you just so ably demonstrated.

[BYODB]

With a LFPR similar to what it was when mothers defaulted to homemaking.

Shh, don't confuse Tony with advanced concepts like the participation rate. Don't scare him with looming trifles like the Boomer retirement wave vis-?-vis Medicare/Medicaid. Those are scary and he's not really mentally equipped for such concepts.

[Tony]

Why aren't they working on innovative ways to try to increase wages in an increasingly globalized economy instead of trying the same old useless tax giveaways?

[BYODB]

Do you know what helps drive stagnant wages, Tony? Devaluing the worth of the currency itself by printing.

But no, you keep doin' you. By all means, don't learn anything about inflation or how it can drive your rate of savings effectively negative.

That said, if Republicans slashed spending would you consider that a good thing since it would help shore up the value of the dollars you already have in your pocket? Survey says no.

[Zeb]

I think the argument there is that corporate rates being higher than the rest of the world puts the US at a competitive disadvantage, not that if the rest of the world does it then it must be right. The rates of the rest of the world are relevant because they are relatively lower, not because there is something inherently right about them just because the rest of the world does it that way.

[Square = Circle]

It's also a way of pointing out to those who do feel we should strive to be "more like Europe," that most European countries in fact have much lower corporate tax rates.

[KDN]

Often a much flatter personal income tax rate structure as well. And a significantly higher proportion of those dastardly regressive consumption taxes.

[Tony]

Which pay for a more robust social safety net... Money is money whether it's paying for a tax or for cancer treatment.

[BYODB]

Ever wonder how Europe provides that supposedly superior social safety net with way, way lower corporate tax rates?

I'm guessing not.

[Tony]

So we're just pretending that statutory tax rates are the effective tax rates for this exercise?

[BYODB]

It's hard to know what you're doing since you make no points and use no relevant data. I just assumed you were emoting as usual.

[Square = Circle]

He's implying US corporations don't in fact pay any taxes. It is known.

He could prove it, but he's too lazy.

[CE]

If the rest of the world has non-zero taxation levels, the rest of the world isn't civilized.

[Just Say'n]

"from 0% to 0% in many cases if we're talking effective"

Because accountants are free

"There's no evidence that lowering corporate taxes will incentivize anything socially useful."

You mean other than economic growth? Why do the Scandinavian 'socialist' paradises tax their corporations lower?

"Why is it that throwing money at wealthy people and entities"

Damn millionaires and their 401(k) plans!

[Square = Circle]

You mean other than economic growth? Why do the Scandinavian 'socialist' paradises tax their corporations lower?

You're missing the key maneuver, which is to declare that US corporations actually pay $0 in taxes.

It is known.

[Brandybuck]

I'm disappointed that there are no spending cuts. But I have no problem with the tax cuts themselves. So why are all the progressives shitting their pants? I can see them rending their beards over spending cuts, but there are no spending cuts. What is it about lowering taxes, per se, that drives them nuts? Last I checked Facebook the going meme was that we're all going to die over this.

[BYODB]

Suddenly they're pretending to care about deficits. Yeah. It's pretty hard to take them seriously at this point.

[Zeb]

I don't know. Some kind of slippery slope worry maybe? If taxes can be cut, then maybe actual spending cuts will be next.

They also have a real hard-on for making rich people pay more taxes (even though the highest income quintile already pays the great majority of income tax).

[Tony]

Yes Republicans will come back around and use deficits as an excuse to cut social programs, knowing that it's much more difficult to raise taxes once they've been cut. Cutting social program is what gets Paul Ryan hard. He has to put a copy of Atlas Shrugged on his wife's face when they make love.

Lowering taxes alone serves to increase wealth disparity that is the primary driver of economic/wage stagnation, not to mention the erosion of democracy. And not to mention the sheer gall it takes for Donald Trump to give himself a billion-dollar tax cut and stand up and lie about it. I'm a much better human being than Donald Trump and have made my living honestly, unlike him. Can I have a billion dollars for doing nothing?

[BYODB]

Lowering taxes alone serves to increase wealth disparity that is the primary driver of economic/wage stagnation, not to mention the erosion of democracy.

What the actual fuck are you babbling about? Has your TDS finally entered the terminal stage?

[CE]

Freedom is the greatest driver of wealth disparity.
When people are free, some of them can become wealthy.

[CE]

They think the tax cuts are a prelude to spending cuts. Even though Republicans have never cut spending. The last president to cut spending was Thomas Jefferson, a Democrat.

[Alan Vanneman]

"This has always been unjust. It represents Uncle Sam crossing a hitherto unviolated ? and inviolate ? line, forcing Americans to buy something against their own wishes and better judgment."

Well, except for Old Age and disability pensions and health insurance (SS)*, unemployment insurance, among other things. And I don't have any kids, so why should I pay for schools?

As for that sky-high corporate tax, the Treasury Office of Tax Analysis estimates that the average corporate tax rate on profits from new investments made in the U.S. is 24 percent; the average corporate rate on profits from new investments made by companies in other "Group of Seven" (G-7) industrialized, democratic countries, weighted by the size of their economies, is 21 percent.

There's more, of course, all of which Reason could have been writing about weeks ago instead of waiting until Mitch & Co. finished "ramming" the bill through, banana republic style.

*Ayn Rand's favorite!

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