But What If The Taxes Do Not Get Paid.

 

The big campaign push from the Democrats for 2020 is finally full tilt Single Payer Healthcare, “Medicare For All.” The programs all rely heavily on taxes on the wealthy to not impose a crushing financial burden on everybody else, at least that is what the Dems say.

Here’s Warren dodge the issue.

“The wealthy will pay more.”

Never mind the fundamental imorality of this or the Robin hood language. Warren is making an assumption that regardless of what she and the other Democrats do, that nothing else in the economy will change. She believes that there is somehow a pot of money out there that she can just take and nothing else will change. It will all work like magic. Just like Obamacare did. Just like every other health or job program run by the Federal government that has come along.

There is just one problem with this logic. What if the wealthy don’t pay. What if the wealthy, those evil one percenters come up with ways to not pay the taxes. I don’t know about Ms. Warren and how she handles taxes, but in my experience when taxes go up, the shelters come out. The wealthy have all sorts of ways to avoid taxes, as do the big companies and if they see a big tax bill coming, the expert will come out, the art market will go wild, as will condos in exotic locations and offshoring. The people that will not get anything will be Uncle Sugar’s people.

Of course it’s worse than that. Assets don’t have a fixed value and if the wealthy need to sell those assets, the assumed value of the rest of the assets will decline, sharply. In fact Warren and Sanders will be surprised how quickly the assets they plan to tax are not worth effort to cash in anymore. To say nothin of what will happen to the value of pension funds and other institutions that hold stocks and bonds in those assets that will be taxed to death. It won’t take long before the health care bill crushes everything else.

Of course the elephant in the room is that the government is already broke. Even with zero interest rates, the deficit is ballooning in a fairly good economy. If Warren or Sanders get elected, say hello to a depression the likes of which we have never seen before. But as long as the Democrat geriatric club gets in power, they don’t care. After all in the long run, they won’t see it, because they will be dead. Apparently they don’t care what they do to their kids.

Here’s a list of the taxes proposed to fund this new health program. In the end, look at your job and think, if my employer has to pay a payroll tax increase, will it pay to keep me? Can he hire an illegal to do my job?

https://www.atr.org/list-tax-hikes-sanders-medicare-all-plan

That is the cold hard facts about tax increases. Especially those that say that they will “eat the rich.”

The outcome of medicare for all is going to be a distorted and further weakened ecomony, increased inequality and massive job losses. The Democrats will have thrown a rocket the window when we don’t have the money to fix the window anymore.
http://bastiat.org/en/twisatwins.html

One comment

  1. Bryce · September 21

    Like Robert Kiyosaki says, “Good luck taxing the rich.” He goes on to explain that the rich have retreated to corporations where they store their wealth. At best, they’ll pay the corporate tax rate.

    The MMT enthusiasts assure us that deficits mostly don’t matter and taxes only serve to increase the demand for currency. The Dems are prepared to test this idea to its limits. Medicare for all will cost $40 trillion over 10 years. To keep the deficit spending the same, they would have to double tax revenues. Alternatively, they can increase deficit spending by some ridiculous amount.

    Given that wages are not increasing, the wage earner has little choice but to offload expenses onto the government if he can’t reduce them. We need to figure out how to stop being wage earners and start running our own businesses.

    I’m skeptical this will end well.

    Like

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