Minor Thoughts from me to you

Tim Challies is a Canadian blogger. Therefore, he's uniquely qualified to discuss the positives and negatives of the Canadian healthcare system. He doesn't much like the utopian image painted by Michael Moore.

Now that Sicko, Michael Moore's latest film has been released, Americans are bound to hear a lot about the wonders of the Canadian health care system. As I understand it, Moore's ultimate proposed solution to the American health care conundrum is to adopt a socialized system similar to what we enjoy in Canada. The truth is, though, that the Canadian system simply isn't all that and a bag of chips. The system works, but it comes with a cost that most Americans would be unwilling to pay: a heavy tax burden.

... Our health care system is good, but it has some serious problems. It is certainly not the ultimate solution, and especially so if you dislike 45% tax brackets.

One of his commenters complained about his characterization of the Canadian healthcare system and included this:

I'm an immigrant to Canada. I've travelled extensively and have family all over the world. I'm convinced that God, in His providence, brought me to live in one of the best countries in the world. As Seniors on government pensions, we have more disposable income than we ever had on a Pastor's salary and no worries about paying for medications and health-care as we age.

...I thank the Lord that I live in Canada.

Ms. Compton: you and your husband are living the high-life on Tim Challie's salary. The Canadian government takes nearly half of his income to fund your healthcare and your pension. This isn't a voluntary contribution made out of the goodness of his heart. If he ever failed to send in his taxes, the government would put him in prison. Millions of other Canadians face the same "choice".

I'm sure you do thank God that you live in Canada. It's quite a good deal for you. How do you walk down the street each day, knowing that most of the people you pass are paying half of their income to support you? More than that, those people are not voluntarily supporting you. And you know it. If it ever came to a vote, you would vote to force those people to keep supporting you. From where I sit, that looks like legalized robbery -- not loving charity.

I thank God that I don't live in Canada. I'd rather keep that extra 25% of my salary (my taxes are roughly 20%) and spend it on my family or donate it to the charities of my choice.

My wife and I take great pleasure in sending nearly 14% of our gross income to others. We enjoy sitting down each money and selecting various charities to give to. We increase our giving whenever our income increases. If we increased our taxes whenever our income increased, we'd lose out on that pleasure. We'd lose out on the joy of voluntary giving if we lived with greater taxation.

Here's what Jesus said about giving.

Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.

I'm thankful that I have money to give away. It's fun. Every month we end up wishing we had even more to give away. That's why I'm thankful that I live in a country that allows me to keep more of my money.

GasBuddy has a nifty map of gasoline prices by county. I imagine that ease of transportation explains part of the price differences. However, I think that most of the difference is explained by differences in state taxes and EPA regulations.

Keep this map in mind the next time you're tempted to blame oil companies for expensive gas.

Hold on to your wallets -- the Senate is in session. Senators Grassley and Baucus plan to make your gasoline even more expensive.

A proposal to hit oil companies with $29 billion in new taxes advanced in the Senate on Tuesday, targeting the money to energy conservation, wind turbines, electric hybrid cars and clean coal technology.

The massive tax package, double what Democrats had discussed as recently as last week, is "designed to promote clean and sustainable energy," said Sen. Max Baucus, D-Mont., chairman of the Finance Committee that approved the measure by a 15-5 vote.

It is expected later this week to be added to energy legislation being considered by the full Senate.

It gets worse.

The American Petroleum Institute, the oil company trade group, said in a statement that the taxes "will discourage new domestic production, discourage new investments in refinery capacity and would lead to the loss of good-paying U.S. jobs."

As I wrote previously, Congress has been discouraging investments in refinery capacity for decades. Our already limited refinery capacity is largely responsible for the current high price of gasoline. We should be doing everything in our power to increase refinery capacity -- not decrease it more.

Baucus said he expects the oil companies to complain, but he doesn't believe the taxes "will substantially change these companies' incentives to produce energy."

Maybe not. But it will substantially change the price that these companies charge to consumers. Senator Grassley doesn't realize that -- maybe he's been smoking something green?

Grassley said the "narrow change" in tax policy "seems likely to have little if any effect on domestic production" or the price of gasoline at the pump.

Uh-huh. Raising taxes by $29 billion will have "little if any effect" on prices. How long has he been out of touch with reality? Also, does he have any plans to return to reality?

How expensive could this all get? The Heritage Foundation did some quick research and put together a state by state analysis for you. Living in Wisconsin, I could see prices rise from $3.29 a gallon (May price) to $3.60 a gallon next summer. By 2016, gasoline could rise as high as $6.62 a gallon. To Senators Grassley and Baucus: "Thanks a lot. I didn't really need that extra $113 in my monthly budget anyway."

As if this wasn't bad enough, Congress would like to make your car more dangerous.

Despite Congress' repeated efforts to repeal the laws of physics in favor of something more politically correct, the fact remains that bigger is safer when it comes to vehicle size. Supporters of increasing Corporate Average Fuel Economy (CAFE) standards ignore what millions of minivan and SUV drivers already know: They stand a much better chance of surviving an accident than drivers of lighter, more fuel-efficient subcompacts. The problem is that significantly improving fuel economy means cutting average vehicle weight. The curb weight of a typical family sedan can be reduced from the present 3,200 pounds to, say, 2,800 pounds. But maintaining the same level of safety with advanced air bags, refined crush zones and other technological fixes could make the lighter family sedan unaffordable for middle-class buyers.

Advocates of higher CAFE standards claim that the smaller vehicles will pollute the air less and consume fewer natural resources. As a result, from a global perspective, such vehicles will do less damage to the environment and fewer people will die or get sick as a result of emissions-related causes. But most Americans with families to transport and businesses to move see a much more immediate and concrete health and safety benefit in driving vehicles that serve their purposes without putting at risk their lives and those of their loved ones. Only through force and coercion will they trade their practical vehicles for the smaller, less useful and often more expensive "green" vehicles favored by higher CAFE advocates.

The land of the free -- she ain't quite what she used to be.

The Wisconsin State Journal published a few local reactions to the Wisconsin's ongoing budget debates. One reaction caught my eye.

Christa Decker of Madison said she depends on Medicaid programs for everything from her wheelchair to doctor's visits to long-term care. Decker, 51, who has both physical and cognitive disabilities, said that cuts to those services would have a direct impact on her life.

"You cannot cut out part of my life. This is too important to me," Decker said.

I'd like to pick on Ms. Decker just a little bit, on my way to illustrating a point. Ms. Decker is supported by money that comes from every taxpayer in Wisconsin and taxpayers from around the nation. Ms. Decker's life is sustained by the work of everyone around her. She's making a fairly common blanket statement: "If you cut taxes, you'll cut the money I depend on and throw my life into chaos."

That is a legitimate worry. Many people have come to depend on the money and services they receive from local, state, and federal governments. But there is another worry too, one that's expressed far less often. "What is the real cost of giving all of this money away?" Let me give you an example, straight out of my own budget. First, here's a breakdown of where our income goes.

Mortgage

25.84%

Taxes

21.42%

Tithe

10.37%

Student Loans

8.65%

Groceries

3.17%

Gasoline

3.04%

The remaining 30% goes into a large variety of small expenses and savings. Notice that $1 out of every $5 dollars we earn, goes straight into taxes. $0.20 out of every $1.00. $21 out of every $100. Gone. Straight off the top. That's a significant fraction of our income. We're a young married couple, just 2 years out of college. There are a lot of things we could be spending that money on. Here's a short list.

• Paying down student loans
• Paying down our mortgage
• Replacing the old roof on our house
• Replacing the ancient windows in our house
• Finishing our basement to increase the living space in our house
• Saving for a new laptop, to replace my wife's rapidly aging one
• Saving for a new car, so we won't have to take out a car loan next time around
• Saving for retirement
• Saving for our children's college education
• Saving to visit my parents, in Papua New Guinea

As you can see, paying down loans and increasing savings is a large part of our financial goals. We'd love to be free of our debt. There are times that it seems almost achievable. For instance, if we weren't paying taxes the past three months we could have either paid of 68% of one of our student loans or 20% of our home equity loan. And that's just in a three month period.

That's the cost of those "free" government services that so many people enjoy. Ms. Decker's life is financed by my family's increased debt and decreased savings. Oddly enough, those are the costs that are most likely to make me need a government handout later in life. Ironic, isn't it?

I don't know where the dividing line between necessary and unnecessary taxes is. And I don't have a plan for weaning the public off of the dole. I'm still thinking about that. But just remember that government services aren't free. And that the money I'm spending on taxes is money that I'm not spending on goods and services -- money that could be used to create jobs and wealth.

From the New York Times:

It's a seemingly simple solution to a nationwide problem: if people do not have health insurance, just require that they buy it.

Yes. It is seemingly simple. That's why most of the Democrat candidates for President, one of the Republicans (Romney), and an ever-growing list of states are considering the idea. It's so simple -- if people don't have something that you want them to have, just force them to buy it. The power of government is a wonderful thing.

Of course, there are a few downsides.

But [Massachusetts] is discovering that making health insurance mandatory is easier said than done. It has spent the past year dealing with questions about how much basic coverage people need, and how much they can be expected to pay. (The poorest residents receive free or subsidized coverage.)

Step 1: Require everyone to buy an expensive, all-inclusive healthcare plan. Step 2: Give government handouts to everyone who can't afford to buy the expensive, all-inclusive plan. People of all income levels will be using services that they don't directly pay for. Worse, many people will be using services that they don't even indirectly pay for. This sounds like a fantastic way to keep prices down.

Who are all of these uninsured anyway? And why don't they want health insurance?

Almost half of the roughly 400,000 uninsured people in Massachusetts are single males, and many young men think "health insurance is for sissies," Mr. Kingsdale said. Because young males are generally healthy, adding them to the pool of insured would most likely reduce the average cost of coverage over all, given that this particular group is not liable to need expensive treatment.

That sounds like an implicit tax on young males. They're being forced to buy insurance just as a way of getting more money into the pool. That money can then be used to be for treatments for all of the chronically ill and elderly in the pool. Why would any young man want to be part of such a scheme?

A low-premium, high-deductible health plan (combined with a Health Savings Account) would be a far better option for these men. Instead of blowing all of their money on premiums, they could be saving it up for the next 10-20 years. When they do need medical care, they could pay for it out of their savings, rather than out of a common pool that other people are forced to pay into.

Indeed, the problem with healthcare isn't that too few people have it. The problem is that the people who do have healthcare are completely insulated from the actual cost of their care. How much did your last checkup cost? Do you have any idea? How about your last prescription? Other than the copay, do you have any idea how much it cost? Was it the most cost-effective prescription possible or would a different drug have been just as effective with a cheaper price tag? Almost no one knows the answers to the questions.

Healthcare costs are widely variable. And more expensive doesn't always mean better.

In a Pennsylvania government survey of the state's 60 hospitals that perform heart bypass surgery, the best-paid hospital received nearly $100,000, on average, for the operation while the least-paid got less than $20,000. At both, patients had comparable lengths of stay and death rates.

Still, the Pennsylvania findings support a growing national consensus that as consumers, insurers and employers pay more for care, they are not necessarily getting better care. Expensive medicine may, in fact, be poor medicine.

"For most consumers, the fact that there is no connection between quality and cost is one of the dirty secrets of medicine," said Peter V. Lee, the chief executive of the Pacific Business Group on Health, a California group of employers that provide health care coverage for workers.

It's not just that there's no connection between quality and cost -- there's no connection between anything and cost. A monthly premium disappears into a black hole. At some point in the future, healthcare services may or may not come floating back through the black hole. No one understands how or why different services are covered by their plan or what the relation is between the cost of their plan and the services delivered by that plan. All they can see is that each year the amount of money thrown into the black hole gets a little bit bigger.

Is it any wonder that people are dissatisfied with American healthcare? Worse yet, none of the reform proposals on the table address this fundamental disconnect. Rather than improving transparency, most of their reform plans simply aim to get more people to throw money into the black hole. That's not thinking different on healthcare, that's just following the same broken formula over and over again. Insanity.

The best way to lower prices, increase transparency, improve quality, and deliver higher quality services for lower prices is to make consumers directly responsible for paying for healthcare. Third party payor setups will never be able to deliver a great service at a low price. As long as the person paying for care and the person receiving care are different, true satisfaction will never be achieved.

Recently, Congress has been going nuts over ethanol production. Government money has been thrown at every imaginable ethanol-related project.

If the current tax credits, grants and loan guarantees are extended, the package would cost taxpayers an additional $140 billion over the next 15 years. New proposals under consideration in Congress could raise the tab to $205 billion.

The biggest single item would be an extension of an existing 51-cent-a-gallon ethanol tax credit, scheduled to expire in 2010. It would cost the federal government an extra $131 billion through 2022 under a fuel mandate that recently cleared by the Senate Energy and Natural Resources Committee. (It would cost $18.36 billion in 2022 alone.)

Besides the ethanol tax credit, other current incentives include a $1-a-gallon biodiesel tax credit, a subsidy for service stations that install E85 pumps, spending by the Agriculture Department on energy programs, and various other Energy Department grants and loan guarantees.

Some lawmakers want to provide aid for ethanol infrastructure since ethanol is too corrosive to be transported through existing gasoline pipelines. ... Another bill would establish a Strategic Ethanol Reserve for years when corn harvests were reduced by droughts. ... a House Agriculture subcommittee approved a proposed new energy provision that would provide $2 billion in loan guarantees for new biomass plants and $1.5 billion for research into cellulosic ethanol technologies.

The only problem -- nobody's quite sure how to pay for any of this. Especially as Democrat presidential candidates are proposing billions in new healthcare and education spending. All of those billion have to come from somewhere, but Democrats have been pledging to keep the budget balanced. Obviously, those are code words for "hike taxes on the rich to pay for our new toys", but even tax hikes on the rich only go so far. After all, how many separate billion dollar toys can repealing the tax cuts for people who earn $200,000+ really pay for?

As always, the best quote is saved for the end of the article.

Rep. Tim Holden, D-Pa., who chairs the House Agriculture subcommittee dealing with energy, contended that "we need a Manhattan Project ... we need to be less dependent on energy."

Less dependent on energy? As in, the entire nation should start using less energy? How? Ban air conditioning? Ban driving? Mandate thermostat limits in the winter? Take away our iPods, cellphones, laptops, and digital cameras?

I'm afraid Representative Holden is a bit nuts. As are all of these energy subsidies. Knock it off. When an innovator finally comes up with a better, cheaper way to produce energy, the world will stampede to his doorstep. Until then, quit throwing tax money at the problem. None of you idiots in Congress know how to produce energy any more efficiently, so stop using my money to pretend like you're making good investments.

You're worse than a trust-fund teenager taking Daddy's stock portfolio for a test drive. Knock it off already.

UPDATE: Not only that, but the rush to invest in ethanol could lead to a food shortage down the road:

A recent study conducted by the Center for Agricultural and Rural Development at Iowa State University (which receives funding from grocery manufacturers and livestock producers) reported that U.S. ethanol production could consume more than half of U.S. corn, wheat and coarse grains by 2012, driving up food prices and causing shortages. The study estimates that booming ethanol production has already raised U.S. food prices by $47 per person annually. In Mexico, protests have already erupted over the high price of corn tortillas, a staple food in the local diet.

Planting more corn is one solution, but that means planting less of other crops that are also widely used in foods, such as soybeans and wheat. Tilling fallow land could create more growing space for corn, but might lead to soil erosion and impacts on wildlife habitats.

According to a December 2006 study by the International Food Policy Research Institute, producing enough ethanol to fuel all of the world's vehicles would require five times more corn than is planted today and 15 times as much sugar cane.

So. Ethanol investment isn't just a waste of taxpayer dollars. It could also have some very detrimental effects on agricultural production, land management, and food prices. Quit distorting the market and have the patience to let a level playing field reveal the next energy technology. Please.

I'm going to start at the beginning. Merchants price a good based on several factors: the raw materials in the product, the difficulty of obtaining the product, the supply of the good locally versus the number of other merchants selling the good versus the consumer good demand for the good, and any relevant taxes. Taxes are the only truly arbitrary part of the price. It is also the only part of the price that is a constant for all merchants.

Well, all merchants that follow the law. Any merchant that is willing to break the law can sell a product for less than the competition is charging. If the difference between the untaxed price and the taxed price is great enough, merchants and buyers will form a "black market" to buy and sell products free from all government interference.

How does this tie into cigarettes and terrorism? As you may have noticed, many states have begun to impose punishing cigarette taxes. Rates vary from $3 in New York City ($1.50 in New York state) to a mere $0.07 per pack in South Carolina. 21 states charge $1.00 or more -- per pack -- in cigarette taxes. These high taxes provide a large incentive for buyers and sellers to skirt the law and buy cheaper "duty-free" cigarettes.

Organized crime has been quick to notice this and provide a ready source of smuggled cigarettes. In a post at the Belmont Club yesterday, Wretchard connects the dots between cigarette taxes and terrorism.

Why are cigarettes such an attractive commodity for organized crime groups? First, the difference between the duty-free and duty-paid prices are substantial, thereby allowing smugglers to make profits at relatively low street prices. Second, they are very easy to handle and transport. For example, a container load of cigarettes carries a potential tax value of $1.2 million, almost all of which is potential profit for the smuggler. Third, cigarette smuggling requires a willing market and a good local distribution network, which have already been established by drug-trafficking organizations.

...

In Colombia, cigarette smuggling is directly related to money laundering schemes through the so-called "black market peso exchange." During the exchange, drug-dealers convert U.S. dollars into clean pesos, while cigarette smugglers buy U.S. dollars in order to purchase international goods. The U.S. Treasury Department calls this system "the most dangerous and damaging form of money laundering ever encountered"

...

Tobacco smuggling is a ruthlessly efficient and highly organized trade which involves some of Britain's most vicious criminal gangs, as well as the Eastern European crime groups and the Italian Mafia. British police estimate that Italian organized criminal groups account for 15% of the illegal trade, while Eastern European gangs are responsible for 10% of the smuggled cigarettes in Great Britain. The ferocity of the competition is likely to contribute to violent confrontations as the gangs compete for control.

Wretchard notes that Interpol was establishing a link between terrorists and smugglers before the attack on the World Trade Center.

Structural links between political terrorism and traditional criminal activity, such as drugs trafficking, armed robbery or extortion have come increasingly to the attention of law enforcement authorities, security agencies and political decision makers. There is a fairly accepted view in the international community that in recent years, direct state sponsorship has declined, therefore terrorists increasingly have to resort to other means of financing, including criminal activities, in order to raise funds. These activities have traditionally been drug trafficking, extortion/collection of "revolutionary taxes", armed robbery, and kidnappings.

Maybe it's time that we struck a blow against terrorism. Let's end the "War on Drugs" and drastically cut cigarette taxes. By taking a lot of the profit out of smuggling we can dramatically cut funding to terrorist organizations.

It would certainly be an innovative approach.

Today's Capital Times had a heartwarming little article about homeless activists and their endless crusade to wring money out of everyone else.

Members of the Tenant Advocacy Group, or TAG, already know about homelessness. Each was once homeless, or narrowly escaped being out on the street. "We learned these things from the inside out," said Cynthia Travis, coordinator for the group.

That's good. These people are uniquely situated to help the poor and the homeless. Their goals are absolutely praiseworthy. Unfortunately, their methods are not.

The group entered the fray of state legislative politics this year by sending a letter to Secretary of Commerce Mary Burke requesting a $1 million-a-year increase in state funding for homeless shelter and transitional housing services grants. The Commerce department administers the grant program, funding for which has been $1.5 million a year for some 15 years.

They even saw some initial success as Governor Doyle put an additional $1 million into his budget, for their cause. Then action stalled in the Joint Finance Committee:

As Joint Finance Committee actions on other issues proceeded, it unfolded that any additional funds for homelessness services would need to be funded through an increase in the real estate transfer tax. That didn't fly.

They decided to use an appeal to pity as leverage for their demands:

"I slept in a Ford station wagon for six months," Morris King recalled. The way to help unsympathetic legislators get their priorities in order, he said, is to ask them: "Do you want potholes? Or do you want people sleeping on the street?"

Here's the thing. The legislature doesn't hand out free money. Every penny that the legislature hands out has to come from somewhere and someone else. Increasing the real estate transfer tax would make it more expensive for Wisconsin residents to buy a home. Increasing the gas tax would make it more expensive for Wisconsin residents to drive. Increasing the sales tax would make it more expensive for Wisconsin residents to purchase everything. Increasing the ... well, you get the idea.

Every time the government increases taxes, it becomes more expensive for poorer people to survive on their own. For those living the closest to the financial edge, a tax increase may be the difference between survival and failure. Ultimately, these crusades are counter-productive.

It will ultimately prove fruitless to use the government to confiscate the resources of others and redistribute them to your group. You will merely drive up the cost of living in the State leading to an endless cycle of increases in government aid and increases in the cost of living. Focus on creating wealth that you can use to help others, rather than confiscating wealth.

The Times is surprised to learn that the recent emphasis on biofuels is making our gas more expensive.

In hearings before Congress last year, oil executives outlined plans to increase fuel production by expanding existing refineries. Those plans would add capacity of 1.6 million to 1.8 million barrels a day over the next five years, for an increase of 10 percent, according to the National Petrochemical and Refiners Association.

But those plans have since been scaled back to more than one million barrels a day, according to the Energy Information Administration, an arm of the federal government.

"If the national policy of the country is to push for dramatic increases in the biofuels industry, this is a disincentive for those making investment decisions on expanding capacity in oil products and refining," said John D. Hofmeister, the president of the Shell Oil Company. "Industrywide, this will have an impact."

The concerns were echoed in a recent report by Barclays Capital, which said the uncertainty about the ethanol growth "will do little to accelerate desperately needed investment in complex United States refining units."

"Indeed, it is likely to deter and further delay investment, if not rule out many refinery investments completely."

The oil companies say their views on the longer-term prospects for fuel reflect simple economics. Because of the enormous investments required to expand refineries, they say they have no other choice but to re-examine their plans in light of the calls for more ethanol fuel, regardless of how realistic they may be.

Not that any of this matters to Congress. Now that they've injected a huge dose of uncertainty into the gasoline market and driven prices sharply upwards, they're prepared to tax away any profits that might enable the oil companies to actually handle the market uncertainty. (High profits might give the companies enough of a margin to both invest in refinery capacity and invest in ethanol production. Unfortunately, profits are evil so we can't let that happen.)

Let's not forget the other place that oil industry revenues have been going:

The refining industry has also spent vast amounts "” more than $50 billion in the last 10 years "” to meet requirements to produce cleaner fuels, according to the American Petroleum Institute, the industry's main trade group.

That's a lot of money. And Congress could mandate something else in the future that will cost just as much -- or more. These are the risks that oil industry executives have to face every day of every year. When uncertainty about future expenses goes up, so do prices.

In case you think that everything will be solved if we just move from corn based ethanal to cellulosic ethanol, not so quick:

The economics of cellulosic ethanol, made from nonfood crops and agricultural waste, are also unclear. Since cellulosic ethanol, still at an experimental stage, is twice as expensive as corn-based ethanol, there are currently no commercial-scale cellulosic plants.

In addition, Mr. Goldstein said, an emphasis on ethanol might lead to increased volatility in fuel prices.

"If we get a bad corn crop, we will end up paying for it at the pump and on the food shelves," he said. "We are not buying security. We are increasing volatility."

While Congress was busy thinking about reducing our dependence on foreign oil, they forgot to think about reducing our dependence on fickle weather patterns. When was the last time that the entire nation had to worry about whether or not the farmers would have a bumper crop of corn? Thanks to Congress, we'll be able to experience this old-fashioned form of worry all over again.

Rather than blaming the oil industry for high gas prices, Congress needs to take a long hard look at their own behavior. Then stop it.

Three months ago, I reported that Jim Doyle wanted to hike the hospital tax in order to give hospitals more money. Well, he still wants to. Only now we know that the amounts the hospitals will supposedly receive, is less than Diamond Jim hoped for:

UW Hospital had been projected to gain $23.3 million in Medicaid reimbursements over two years under the original proposal. Under the new calculations, it would receive about $11 million. Meriter, which had been projected to get almost $22 million, would receive about $14 million. The projected reimbursement for St. Mary's Hospital's increased by half a million dollars, to $4.8 million.

Oops. Of course, people not affiliated with the Doyle administration think that hospitals will actually lose money by being taxed, not gain it:

In March, the Wisconsin Hospital Association released an analysis showing hospitals would lose money in the next two years if the hospital tax is approved, not gain $283 million, as Doyle claimed. The group is still analyzing the new data, but remains skeptical.

Of course, it's not even a given that the hospitals will receive all of the money from the tax scheme:

"A large portion is diverted to other programs. ... It's difficult to say where the funds will ultimately be used," Quinn said.

Government efficiency, marching onward. Roll Wisconsin!

Last week the Democrats in Congress decided how they'll spend your money. Surprisingly, they won't be letting you keep much of it.

Majority Democrats passed an important test Thursday with approval of a $2.9 trillion budget plan that promises big spending increases for party priorities such as education and health care.

The budget blueprint sets a course to produce a small surplus in five years by assuming that many of President Bush's tax cuts would expire.

Ah, yes. They'll hit all of their spending priorities by taking more of your money. Makes perfect sense.

The House passed the measure by a 214-209 vote without a single Republican voting for it. The Senate quickly followed on a 52-40 vote; moderate Republicans Olympia Snowe and Susan Collins of Maine joined with Democrats.

But deficits under the Democratic plan would be higher over the next two years than the $150 billion to $200 billion the Congressional Budget Office predicts for the current year. A $41 billion surplus is projected for 2012.

They noted it projects a surplus of $41 billion in 2012 by assuming that more than $200 billion worth of tax cuts over 2011-12 "” on income, stock dividends and capital gains, among others "” expire as scheduled at the end of 2010.

Yep. That makes sense. Increase the deficit in the hopes that continually increasing tax revenues will cover the spending spree. Also, assume that the American people will let you hike their taxes by $200 billion.

The budget plan sets the stage for an $850 billion increase in the national debt "” to $9.8 trillion. Under a House rule endorsed at different times by both Democrats and Republicans, adoption of the budget resolution means a separate debt limit increase bill is automatically passed and sent to the Senate.

You know, Congress has the same sense of fiscal responsibility that the Moellering's do. Joy.

George C. Halvorson, CEO of Kaiser Foundation Health Plan and Kaiser Foundation Hospitals wants to force you to buy healthcare. He doesn't care if you want healthcare or if you think you need healthcare.

"Anything short of an absolute single-payer system requires an individual mandate. If you don't have that, then people will make decisions about coverage that will result in far less than universal coverage."

"Individual mandate": code words meaning that the government will force you buy healthcare and fine you if you don't. "Far less than universal coverage": people might otherwise choose not to purchase health insurance.

The comments were made while Mr. Halvorson was discussing European style healthcare. Several European countries allow private insurerers to sell healthcare, requiring only that every citizen purchase a health insurance plan. This is the model of healthcare "reform" that Mr. Halvorson favors. I can understand why he would be in favor of "individual mandates" -- he heads up an organization that makes quite a good profit selling health insurance. I'm sure Kaiser would earn even higher profits if more people bought health insurance. On the other hand, no one should be forced by their government to make a private company richer.

Individual mandates: just say no.

I don't always agree with Capital Times columnist Mike Ivey, but I do today. He writes about WalMart's appetite for corporate welfare:

Wisconsin's largest employer draws more in corporate welfare than it pays in state taxes. Wal-Mart pocketed $852 million in net profits in Wisconsin off value-hungry consumers between 2000 and 2003. Over that same period, Wal-Mart paid only $3 million in corporate income tax here. That's a tax rate of 0.35 percent, a fraction of the 7.9 percent rate corporations doing business in our fair state are supposed to pay.

Pardon my West High math, but if Wal-Mart paid the going tax rate here it would have owed closer to $67 million. The Arkansas-based retailer has benefited from more than $20 million in public economic benefits in Wisconsin, according to one national study. Good Jobs First reported in 2004 that Wal-Mart stores and distribution centers in Baraboo, Beaver Dam, Menomonie, Milwaukee and Tomah received at least $21.75 million in local tax subsidies, the report says.

I'm a fan of WalMart and I applaud their efforts to bring lower prices to shoppers. But what they're doing in Wisconsin is neither "capitalism" nor "free enterprise". It's looting, pure and simple. The local governments that decided to give tax money -- taken from individuals -- to a big business should be vilified, demonized, and run out off office on a rail.

Wisconsin Governor Jim Doyle has a plan to give more money to hospitals. It's very simple -- in order to pay them more, he first has to tax them more. The Wisconsin State Journal gave a breakdown of the plan:

It works like this: The state imposes the tax on hospitals, leading to an increase in the cost of providing health services. The state returns the money raised by the tax to hospitals to help cover the costs of providing care to Medicaid patients. Then the state reports the increased costs of Medicaid to the federal government, which in turn increases its reimbursement to the state.

The state can then use the extra money for health care or other programs.

I'm reasonably certain that any private doctor, trying to increase Medicaid reimbursements this way, would be prosecuted for Medicaid fraud. Why are states are allowed to get away with such blatant fraud? Wisconsin isn't the only state doing this, but it might be one of the last:

"We have, as a state, been much less aggressive than other states in the use of these assessments," said Jason Helgerson, executive assistant and policy director for the Department of Health and Family Services.

Hospital executives say they understand why states are imposing such taxes. But they said the federal government is catching on to what states are doing and federal rules changes could limit Medicaid reimbursements and render the taxation strategy ineffective for states.

This whole scenario is a perfect example of government inefficiency and waste. Whatever faults private insurance might have, this kind of chicanery isn't it.

It looks like the State is getting behind the Wisconsin goat industry:

State officials are putting their support behind Wisconsin's growing goat industry.

About 260 farmers, processors, state officials and lenders are expected to attend a conference - "Focus on Goats: Milk and Meat Production in Wisconsin" - on Thursday in Barneveld.

... The program is an extension of the Grow Wisconsin Dairy project, which has put an emphasis on high-quality dairy products. "Goat cheeses and other goat products are really becoming more popular," [Jeanne Meier, a spokeswoman for the Department of Agriculture, Trade and Consumer Protection and a leader in the dairy goat initiative] said. "There's great demand in the U.S."

Based on the article, it sounds like the goat industry is really taking off. Lots of farmers have already made big money with goat cheese, goat millk, and goat meat. Many more farmers are eager to get into the industry. Here are the questions that the article raises in my mind: why does the State need to help out the goat industry? Why do Wisconsin tax payers need to pay for an already successful industry to become even more successful? At a time when Governor Doyle wants to tax the oil industry for being too successful, why is his administration paying for another industry to become more successful than it already is? At a time when the state faces a $1.6 billion deficit, why are we spending scarce tax dollars to help businessman who apparently don't need help?

Alaskan Senator Ted Stevens (supposedly a Republican) seems dedicated to wasting money -- he's setting aside Federal money for the development of baby food made from salmon. I'm not sure why this is a Federal issue. Millions of children have grown up without the benefit of baby food made from salmon. I do know that it's just one more wasteful use of my tax dollars. If you want to know why my wife and I complain about losing $600 a month to the Federal government -- this is one of those reasons.

Senator -- if you believe in the project so much, please put your own money into it. Don't put my money into it and then try to tell me that you're doing it for my own good.

(Hat tip to Radley Balko.)

KTPB, the radio station of Kilgore College, is being sold to a Christian music broadcaster. The radio station plays primarily classical music. Local lovers of the arts are outraged over the sale, enough so to form a group dedicated to saving it: Save Our Arts Radio.

Amidst all of the hand-wringing over the decline of classical music radio, a few interesting facts emerge. First, Kilgore College is selling the station because it can no longer afford to run it:

The school, a junior college in this town of 11,000, has been increasingly strapped financially, and the money it was using to subsidize the station "” about $125,000 a year "” was better put toward educating students, officials said. The Corporation for Public Broadcasting provides about $85,000 a year, and donations amount to $80,000.

Secondly, while these citizens may be vocal in their support of the station it appears that loud voices are the only thing they have contributed:

Mr. Holda (Kilgore's president) also pointed out that the station has a meager 650 members. "People want things, but they don't want to pay for them," he said. "It's not unique to the arts."

Supporters of the station see it differently. "It's a public trust," said Otis Carroll, a prominent Tyler lawyer and a leader of the group trying to save the station.

Ah. So. Here we have a station, enjoyed by many apparently, that has been largely supported by tax dollars and subsidies from the local college. Residents are now outraged that their primary source of culture and sophistication is being sold. It seems to me that the biggest problem is that few of these residents have been putting their money where their mouths are. They sure talk big about the value of the station, but they haven't backed up those words with financial support.

Excuse me if I don't weep for their loss.

[tags]taxes[/tags]

My telephone service is about to get more expensive -- thanks to the FCC.

The Federal Communications Commission voted to boost the amount that cell-phone companies must pay to a fund that subsidizes phone service in rural areas, and to require Internet-based phone companies to contribute to the fund for the first time.

Under the FCC's proposal, cell-phone and other wireless providers would have to contribute as much as 3.9 percent of revenue from customers for the third quarter, while providers of Internet-based phone service would have to contribute as much as 6.8 percent of revenue.

We use Vonage for our telephone service. As an "Internet-based phone service", I expect they'll have to jack rates by a couple of percentage points in the next month or so. I'm close to getting another cell phone. Looks like that'll be getting more expensive as well.

How long has it been since rural phone service has truly needed a subsidizing? All that's happening now is that people who choose to live in the sticks get artificially cheaper telephone service -- at my expense. Hope they're enjoying it.

The U.S. Treasury department laid to rest a long-cherished friend today. The federal excise tax on long-distance phone calls was officially declared dead by Treasury Secretary John Snow. The tax was first enacted in 1898 as a temporary measure designed to "soak the rich". Along the way it has managed to soak the middle-class, the poor, the indigent, and the homeless.

This tax, sadly, outlived my grandfather. He saw long-distance service go from an expensive luxury to something that cellular companies gave away as a free benefit. Nevertheless, the federal government continued to tax everyone who used long-distance service as part of "the rich".

Keep that in mind the next time someone wants to tax "the rich". In another generation or two, we might all be "the rich".

From Boston Gal's Open Wallet:

Today's Christian Science Monitor explains: Why the rich get the most tax goodies.

He suspects one reason Americans tolerate tax cuts favoring the wealthy is that many anticipate becoming rich themselves and thereby benefiting.

It is true that when I made the most (as an independent contractor) was also when I paid the least in taxes (write-offs, write-offs, write-offs!) Sometimes I wish the tax code could be written to heavily tax people like Paris Hilton - we could call it the "stupidly wealthy tax". Money generated from the Paris Hilton tax would directly fund educational programs with the goal to produce as many anti-Paris Hilton's as possible.

Well, the Fair Tax would certainly accomplish that goal. Err, the goal of taxing Paris Hilton, not the goal of funding educational programs to produce anti-Paris Hilton's. Still, by taxing consumption rather than income, the Fair Tax would certainly make rich playboys/ playgirls actually pay taxes for the first time in their lives.

Fortunately, the Fair Tax wouldn't just tax Paris Hilton. It would make all of us better off by removing all federal taxes (income, investment, capital gains, business income, etc) and replacing them with a single consumption tax. It would simplify the entire tax code and increase the tax base (tax everyone, not just those earning an income). It would make American exports cheaper. American made products and foreign made products would -- finally -- be taxed at exactly the same rate.

What's not to like?