Seamanship Quotation

“In political activity, then, men sail a boundless and bottomless sea; there is neither harbour for shelter nor floor for anchorage, neither starting-place nor appointed destination.”
— from Michael Oakeshott's
Political Education” (1951)

Thursday, July 12, 2012

“ObamaTax” won’t defeat Obama in November

Some consultants bank on being listened to by identifying the latest terrifying political “third rail.” Many pundits today think that Justice Roberts figuratively laid Obama across one by characterizing the individual health insurance mandate as—gasp—a tax penalty. Was the term “individual mandate” that much better? Did it really disguise something far worse—a tax?
Last year, political blogger Pat Caddell advised Obama simply to give up on being re-elected and settle for being an honorable one-time president, like his old boss Jimmy Carter. This week, Caddell’s telling Mitt Romney how to prove him right, how to lick Obama in November.

“So Romney must wield that cudgel, and wield it hard.  And so must Republicans, because if the campaign against Obamacare--the ObamaTax--is to be truly effective, it must be a top-to-bottom message.  Indeed, as we shall see, the anti-ObamaTax message could be even stronger for down-ballot Republicans than for Romney himself.  
“The challenge is to keep the focus on the tax--the ObamaTax.  Obamacare is many things, but the biggest single thing is the thing that they said it wasn’t--the ObamaTax.”  

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There’s much to criticize, amend, and worry about in Obama’s 2,700-page liberal/conservative/public/private/federal/state health legislation to ensure universal access to America’s gigantic inflationary health care system. Fine.

(Indeed, Justice Roberts may come to be seen as Obama’s wise helper by making the states more equal and, thus, more accountable partners in its implementation and expansion.)

However, a small health tax on that fraction of American citizens who have the means but presently simply choose not to insure themselves is the least of Obama’s problems.

It’s conceivable that the Republicans might succeed in exaggerating this new tax penalty burden, for instance, repeatedly calling Obamacare one of the “biggest tax hikes on the planet.” But, will Obama actually let them get away with another “death panel” campaign?

Mitt Romney can say pretty well anything, but he can’t be Sarah Palin.

In any case, is that word “tax” always death in American politics? When it comes to accepting common sacrifices, are Americans really that exceptional? The draft and the history of US taxation suggest not.

Look north and you’ll see that typical Canadians pay quite similar levels of taxation and regularly re-elect tax-raising governments.


Bruce Bartlett’s column of May 12th includes a revealing table on personal taxes as a percent of the labor costs for an average worker in OECD countries, in 2011. The “tax wedge” on the Canadian worker was a whopping 30.8% compared to 29.5% on his American counterpart.  

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In 2004, a new McGuinty government introduced the Ontario Health Premium to collect another $3billion annually to bolster the finances of Ontario’s burgeoning public health care system. Up to $900 annually has been levied on everyone making over $20,000 ever since.

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It’s not a better tax than Obama’s so-called health tax; it wasn’t discussed in the Ontario election, it doesn’t single out bad behavior, it’s harder on the working poor than on the rich, it covers only a fraction of the health system’s financial pressures, and it doesn’t lead necessarily to a better-run, more accessible system.

Nevertheless, it was quickly accepted and didn’t stop Dalton McGuinty from being re-elected twice.

The magic of the Ontario health tax is not the superior appeal of the Ontario premier. He’s not in Obama’s league. Its rationale, however, was compelling—it was seen as a health tax, necessary for additional investments in healthcare.

Ontarians, like Americans, will pay a little more if they think they’re paying to get into and keep up, respectively, the “greatest” health system in the world.

Putting the word “health” in front of a tax is very sexy. Obama can’t do better. Posthumous letters of endorsement by Harry Truman, Richard Nixon, John Kennedy, and Mother Teresa would pale by comparison.

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