Three Lies and a Truth: On Taxes and MediScare

A couple of timely debunkers for you today.

First up, here are the three big lies about taxation in America:

Lie Number 1) Poor people don’t pay taxes.

Lie number 2) The U.S. suffers from high taxes.

Lie number 3) U.S. corporations are over-taxed.

And here’s the truth of the matter, courtesy of Andrew Leonard at Salon.

Next, what about all those critics (Clearly NM among them) of Congressman Paul Ryan’s plan to end Medicare by turning it into a voucher program.

Poll after poll shows that the Ryan Medicare Plan is a loser.

The response from Ryan Plan proponents is that the critics are simply engaging in “scare tactics” — which they are branding as “Mediscare.”

Why does Mediscare work? Because, according to Matthew Ygleisas, the consequences of privatizing Medicare are scary:

…the key consequence of privatization would be a steep increase in the per unit cost of health care services. Medicare is able to use its semi-monopsony status to drive down prices. If privatized the cost of treating the typical 65 year-old would increase by around 40 percent. Paul Ryan’s version of privatization then “saves” a tiny bit of money for the taxpayer by simply paying a much smaller share of the now much-higher bill. Then he promises to save large sums of money over the long term by ensuring that the share of the higher bill that the government covers will shrink drastically over time. This shrinkage in the value of the government health care coupon either won’t occur (in which case all privatization will do is increase costs) or else it will occur (in which case over 100% of the savings will come from people going without health care services they need) and in either case the consequences are scary.

Some hard truths indeed for New Mexicans under the age of 55 who would be “covered” by the Ryan Medicare plan.

Tortilla Tax Tabled

SB 10, the so-called tortilla tax proposed by Democratic Sen. Bernadette Sanchez, was unanimously tabled today in a key House committee – but not before Sanchez said she considered exempting tortillas from the controversial tax.

Sanchez’s proposal to tax all food items not included on the list used by the state’s Women, Infants and Children Program (WIC) had been widely criticized by a broad array of groups, many of whom testified at today’s House Business and Industry Committee.

Advocates for the poor said the tax was “punitive” and would unfairly impact the poor.  Retailers said it would be too difficult and bad for their business to impose the tax. Advocates for those who live in rural areas noted that the non-taxed foods were often not even available in their areas. Advocates for a fair tax system said the legislature has many other ways to raise taxes without disproportionately affecting the poor.

Before hearing from the many who opposed it, Sanchez tried to explain the reasoning behind the bill, saying she had worked with state tax officials to craft the plan and saying it was meant to encourage healthy eating.

She said that after hearing the uproar over the tax, she had briefly considered exempting tortillas from her proposal.

In the end, members of the committee declined any comment on the bill, voting instead to table it.

That doesn’t mean the bill is dead – it could pop up again in the waning days of the session as part of another revenue plan.

The legislature has a number of revenue options available that could raise hundreds of millions of dollars for the state, including making the rich pay their fair share and implementing combined reporting, which would make out-of-state businesses pay taxes on income made in New Mexico.

The session ends Thursday at noon.

Domenici’s remarks on the deficit in context

Former Senator Pete Domenici today released a few soundbytes to go along with a report by the Bipartisan Policy Center’s report on federal deficits titled “Drowning in Red Ink“:

“The fiscal health of our nation is at stake. We can no longer continue on the present path of unprecedented deficits and debt. Without dramatic changes in fiscal policy, America will find itself far weaker in the world, economically and strategically.”

Whether or not Domenici is right, I suppose, depends on your definition of “economic and strategic” strength. Consider the facts. Pete Domenici voted ‘yes’ on the following:

If, broadly defined, “economic and strategic strength” means billions of dollars of entitlements for prescription drug companies, massive tax breaks for the very same companies who created the insane boom and subsequent crash in real estate prices which would ultimately send our economy into recession, and more money for an unwinnable and politically intractable war, then Senator Domenici is quite right.

If, however, this is not the case, then we can simply let the numbers speak for themselves:

(via Thinkprogress)

(via Thinkprogress)

Are Taxes Evil?

The roads we drive on, the Medicare that helps senior citizens, the garbage that is collected every week – we all know the source of funding for these services – the taxes assessed and collected by the government, paid for by you and I.

In today’s political climate, there’s no way in hell a candidate would be caught dead calling for an increase in taxes. We’ve all been trained since Nixon’s first campaign to repeat the mantra: tax cuts good, tax increases bad.

But the worldwide financial crisis has changed things considerably. America’s taxpayers bailed out not just America’s largest banks, but quite possibly, the world’s economy. Before all the knee jerk reaction starts about how the government overstepped its bounds, let’s remember who was frantically calling for this governmental action – bank CEO’s, leading investors, leadership of both political parties and the President. Continue reading