[President Obama] didn’t state the main qualification for any person who serves in government, the absence of which has lit a brushfire of discontent, fidelity to the Constitution.

He and his allies haven’t taken that first step to recovery — acknowledging their problem. It’s their utter disregard for the Constitution that is causing this big mess. The concept of a limited government, restrained in what it can and should do, is foreign to them, while for most Americans it’s in our DNA. This is what puts Obama at odds with so many Americans.

President Obama said his Supreme Court nominee will be someone who knows “that in a democracy, powerful interests must not be allowed to drown out the voices of ordinary citizens.”

Newsflash for the president! The most “powerful interest” in America today that is drowning out citizens’ voices is…. the government!

Chodrov’s “Argument” is reprinted below:

Tradition has a way of hanging on even after it is, for all practical purposes, dead. We in this country still use individualistic terms—as, for instance, the rights of man—when, as a matter of fact, we think and behave in the framework of collectivistic doctrine. We support and advocate such practices as farm-support prices, social security, government housing, socialized medicine, conscription, and all sorts of ideas that stem from the thesis that man has no rights except those given him by government.

Despite this growing tendency to look to political power as the source of material betterment and as the guide to our personal destinies, we still talk of limited government, states rights, checks and balances, and of the personal virtues of thrift, industry, and initiative. Thanks to our literature, the tradition hangs on even though it has lost force.
But there are many Americans to whom the new trend is distasteful, partly because they are traditionalists, partly because they find it personally unpleasant, partly because reason tells that it must lead to the complete subjugation of the individual, as in Nazi Germany or Communist Russia, and they don’t like the prospect. It is for these Americans that this book was written. For their opposition to the trend takes the shape of reform, while nothing will turn it but revo lution. And by “revolution” I mean the return to the people of that sovereignty which our tradition assumes them to have. I mean the return to them of the power which government confiscated by way of the Sixteenth Amendment.

When you examine any species of government intervention you find that it is made possible by revenues. A government is as strong as its income. Contrariwise, the independence of the people is in direct proportion to the amount of their wealth they can enjoy. We cannot restore traditional American freedom unless we limit the government’s power to tax. No tinkering with this, that, or the other law will stop the trend toward socialism. We must repeal the Sixteenth Amendment.
Washington, D.C.

F. C. February 1954

You can download and read the whole thing here.

Remember that this was written almost 50 years ago and then reflect on how much things have changed – and not for the better – since then.

Love it. But I still want my pony, dammit.

h/t The Corner

First, a mention of 3rd party payments and the inefficiencies that such a system has introduced to our healthcare market (if only he had gone on and said more):

Employer-paid insurance is central to what David Gratzer of the Manhattan Institute calls “the 12 cent problem.” That is how much of every health care dollar is spent by the person receiving the care. Hence Americans’ buffet mentality — we paid at the door to the health care feast, so let’s consume all we can.

John McCain had the correct prescription for health care during the 2008 campaign. He proposed serious change — taxing employer-provided health care as what it indisputably is, compensation, and giving tax credits, including refundable ones, for individuals to purchase insurance.

Then, a mention of what is really going on here: Obama really thinks he’s smarter than everyone else and would rather impose a clean solution than deal with the dirt of democracy:

Professor Obama, who will seek re-election on the 100th anniversary of Wilson’s 1912 election, understands, which makes him melancholy. Speaking to Katie Couric on Feb. 7, Obama said:

“I would have loved nothing better than to simply come up with some very elegant, academically approved approach to health care, and didn’t have any kinds of legislative fingerprints on it, and just go ahead and have that passed. But that’s not how it works in our democracy. Unfortunately, what we end up having to do is to do a lot of negotiations with a lot of different people.”

Note his aesthetic criterion of elegance, by which he probably means sublime complexity. During the yearlong health care debate, Republicans such as Sen. Lamar Alexander of Tennessee have consistently cautioned against the conceit that government is good at “comprehensive” solutions to the complex problems of a continental nation. Obama has consistently argued, in effect, that the health care system is like a Calder mobile — touch it here and things will jiggle here, there and everywhere. Because everything is connected to everything else, merely piecemeal change is impossible.

So note also Obama’s yearning for something “academically approved” rather than something resulting from “a lot of negotiations with a lot of different people,” aka politics.

Pretty much.

Note that I’m not saying that I don’t think that sometimes the political process isn’t inefficient or that experts can’t come up with the best solution to a problem. What I’m more concerned with is the legitimacy of the process – the principle that our government is representative and based on inviolable sovereignty of the individual. That’s what gets lost so often in the mind of the modern progressive, that he feels he is smarter than everyone else and is being held back by his less enlightened compatriots. THAT is the real cause of the opposition to Obamacare today: a lack of respect for the individual in favor of paternalism.

So let me clarify my position:

Under the system we have today, the best option for my family is to use my wife’s employer sponsored plan. She works for a large company and, thanks to the way the tax code is set up, it’s cheaper and easier for us to use her plan. I fully admit that I am benefiting from the system we have today.

But that doesn’t mean that I think that the system is the best possible one, nor does it mean that I am a hypocrite who isn’t allowed to have any opinion on the system itself.

(And, for what it’s worth, shouting “HYPOCRITE!” isn’t an argument, its a form of  ad-hominem attack that one falls back on when he can’t argue facts. Loser.)

More detail? OK.

The system we have today, at least from a tax perspective, is geared towards employer provided plans. It’s a relic of World War II wage controls where companies had to offer really good perks to compete for employees since they were prohibited by the federal government from competing on wages. Somewhere along the way the IRS began to allow those health insurance premiums to be deducted as a business expense and the practice continues to this day.

(I am ignoring the whole issue with the meaning of the term “insurance” here, which, along with access, is the other prong of the health care reform issue: rising costs. When I say “insurance” here, I mean a payment plan for health care services, but not necessarily true insurance, which is a provision for the risk of a future liability, which generally is not the same what most people have as “insurance” today.)

As most people probably know, when you have health insurance through your employer, your employer doesn’t usually provide it for “free”, he typically considers all, or at least a portion, of the premium to be a deduction from your net pay. Employees can then usually choose the level of coverage they want – or no coverage at all – and receive a proportionally higher or lower net paycheck based on that choice. Nonetheless, regardless of how employers classify those premiums relative to an employee’s pay, since the employer is ultimately the one writing the check to the insurance company, the IRS considers the employer to be the one who is actually paying for the policy and therefore allows the employer to take the tax deduction.

This only works for plans “paid” for by employers – individuals do not get a similar deduction from their personal taxes. If you were to decline your employer’s coverage and maximize your net pay relative to the insurance coverage, you still couldn’t just go buy an equivalent health insurance plan of your own and see a commensurate reduction in your personal income taxes for the cost of that policy. The employer is buying the policy with before-tax dollars and you’re buying the policy with after-tax dollars, so, in a sense the employer is getting a discount on the policy that you don’t, and you’re not going to come out equal on April 16th.

So, when my wife’s employer deducts our family’s insurance policy from her paycheck the amount of that deduction is MUCH smaller than it would ultimately cost us – in premium payments and taxes paid – to buy an equivalent policy, not to mention the added savings we get because she works for such a large Fortune 50 company with so many employees in the potential insurance risk pool (compared to my company, which has one employee, me, which is why we our on her plan to begin with).

Now get this point straight first: this is just the way that our system is set up and, under that system, it’s cheaper for us to get our coverage through her employer, so that’s what we do.

And it’s that way for all employees all over the country – it’s almost always cheaper for employers to pay for those policies than it is for individuals. There is no fundamental reason for this to be so, except for a political decision made fifty or so years ago to allow that tax deduction to be allowable only for employers, which was, in essence, part of a larger political decision to express a preference for as many citizens as possible to be reliant on large companies and less independent than they otherwise would be. There is a tremendous ineffiency in the labor market because of this, because many many people are reluctant to change employers or strike out on their own because of the change, or loss, it would incur to their health benefits. This doesn’t have to be so, it’s only because of a deliberate political decision to make it that way that we have the system we have today.

It is also important to note that companies are not required in any way to offer this coverage, most do so out of their own benevolence towards employees (even if employees “pay” for the entire premium through a paycheck deduction, there are still administrative costs and efforts to the company that are associated with offering health plans), and because modern workers today expect to be offered a health plan in conjunction with employment. But there is no legal requirement that employers offer coverage and there shouldn’t be. Running a business is hard work, containing and controlling expenses is difficult, and there is still a nominal level of autonomy and independence in our economy today that should still be respected. Mandates on businesses make business harder to run and operate and encouraging business creation and growth should be a goal of the government as part of its obvious role in growing the economy.

When President Obama was making his final remarks last week, he spoke of employer insurance almost as a right to be asserted by the employee, and insinuated that employers who don’t pay for insurance for their employees are doing wrong by the employees and should be criticized for contributing to what he sees as too high a percentage of Americans without health insurance. In a sense, the tone was one of wanting to force employers to offer coverage and not one of trying to enable more individuals to take care of their own needs. There was an unspoken assumption that employer-based coverage is always the best way.

This assumption may or may not be correct, but I think it’s fairly clear that the system we have today, where employer-based coverage is financially privileged via tax incentives and therefore is the dominating paradigm, has caused serious inefficiencies both in the growth of the economy and in the labor market. And if that’s the case, then it should follow that we should be looking for ways to minimize those inefficiencies, and one way of doing so would be to make it easier and cheaper for individuals to acquire and pay for their own insurance if they so choose. Under the system we have today, it is usually cheaper and easier for employees to be covered by employer plans, but that doesn’t mean that the system itself is the best choice.

And this gets to my ultimate point: President Obama apparently has made the decision that employer-based insurance – or government provided insurance – is the only acceptable system for our health care needs. There is no mention of individual responsibility or enabling individuals to provide for their own care. My preference – and the preference of anyone who believes in liberty and free markets – is for a system where employees are not afraid to move from job to job and where employers are free to run their businesses as they see fit. If employers are benevolent and generous enough to provide coverage to their employees, then that’s good, but their employees’ health is ultimately not their responsibility and they should not be forced to offer coverage or be bullied by the government when they don’t. This is not to say that I don’t agree that people’s lack of access to care is not problem, only that I think people should be allowed and enabled to provide for themselves if they so choose and not be punished for it by the tax code or by an overbearing federal government.

It’s clear that President Obama disagrees and thinks that the only way to expand coverage is to expand the reach of large organizations, whether through employers, or, as he has said before, through government, with no mention at all about individuals. I can only assume that this is for political reasons, best described as a pursuit of the “Dependency Agenda” that George Will often talks about. This worries me and is a major substantive part of the debate we are having today about health care reform. I do not believe the current system is as efficient as it could be and I prefer a completely different system.

Whether or not my family takes advantage of the system we have today is utterly irrelevant.

(Actually, strike that question. I am sure there’s a political answer and that it’s a combination of corrupt political rent seeking and overspending by a federal government that is loathe to reduce tax collections in any way… so forget that question)

A better question is this: WHY is there a presumption that employers should responsible for employees’ health care? Why is there an assumption that employers who don’t offer health care plans aren’t doing right by their employees, and why is the underlying objective – on both sides of the aisle – that something should be done to FORCE those employers to offer coverage as opposed to making it EASIER for individuals to get it for themselves instead?

President Obama was giving his closing remarks to the Kabuki Summit yesterday and by the time I was yelling at the television. Why must we infantilize people and assume that they cannot take care of themselves? Why must we assume that the only way to solve a problem is to centralize authority and mandate regulations?

The whole problem with the escalation of health care costs today is that consumers don’t actually pay for what they receive. They don’t get price feedback, so they overconsume and health care suppliers overcharge. If you want to fix that problem, take away 3rd party payment systems – this means all forms of comprehensive health “insurance”, including medicare – and start exposing consumers to the true costs of their decisions. If someone is poor, then subsidize him directly, but don’t pay on his behalf and implicitly encourage him not to ask about price. If someone is already sick and needs acute care that they cannot afford, then use the system we already have, Medicaid. But we should ENCOURAGE people to ask their doctors about the price of procedures, and we should encourage doctors to market themselves and compete on the price to consumers.

That is the ONLY way to fix this.

Doubling down on medicare – which is what Obamacare is, just an expansion of the size of the 3rd party system and forcing everyone onto an even more opaque government system – is only going to make things worse. It’s that simple.

It’s too bad that he acted out because now people can just ignore his complaints dismissively as the “rantings of a crazy guy” and point to his criticism of the Catholic church and George Bush and all those other things as evidence that all of his other opinions were equally loony.

I got into a message board argument over the weekend with a horribly condescending person, who claimed to be an IRS agent, who honestly tried to make the case that W2 classification of employees is a good thing because it “protects workers”. How? Because it shifts parts of the employment tax burden onto evil greedy employers, who apparently only consider as “employment expense” what they pay as wages and would otherwise pocket the difference if not for the heroic actions of FICA.

When I pointed out that W2 classification also makes tax collections much easier, by restricting taxpayer’s consent and shifting the burden of proof from collector to payer, and enhances revenue by giving government an interest-free float, he called me “paranoid” and told me to go find a therapist.

Thing is, if enhanced collections weren’t the case, why would Obama come out last week and announce a “crackdown” on independent contractors as a revenue enhancement strategy?

Fact is, it’s fairly clear that this man – Joe Stack – was hounded by the IRS for most of his adult life, and whether or not he brought it on himself, the sheer amount of discretionary administrative and enforcement power that the IRS has is a legitimate concern. The income tax is fundamentally inconsistent with the founding principles of this country – 16th Amendment or not – and Congress, using the IRS as its very own special collection agency, has rigged the rules against the average American and built a regulatory system (through the despicable withholding tax, which is a specific topic Joe mentions in his note) that maximizes revenue whole cultivating as much apathy and ignorance as possible among taxpayers.

‘Ole Joe DID try and work peacefully through the system and he did try and work with the IRS to try and fix his problems… and was apparently given no quarter. He quite clearly was driven to such a hopeless place that he felt he had no other choice but to react violently. I’m not all saying that his actions were justified or that he made the right choice, but he does deserve at least a little more sympathy and consideration than many people are apparently willing to give him.

Just because a vast majority of Americans don’t go out and kill IRS agents doesn’t mean that the system is just or fairly structured. There are serious problems that need to be addressed and Joe Stack, through his actions, has ruined it for the time being for those of us who care deeply about tax reform.

That pretty much says it all. Someday when I feel like blogging in depth, I’ll get into John Locke’s natural law and his theory of property and labor and how that’s fundamentally at odds with the income tax. But today I need to work.

What I don’t think we hear enough about is intellectual hypocrisy. What’s that? Well, if moral hypocrisy is saying what values people should live by while failing to follow them yourself, intellectual hypocrisy is believing you are smart enough to run other peoples’ lives when you can barely run your own…

Or consider Rep. Charles Rangel (D., N.Y.), currently subject of a House ethics investigation. Rangel heads the Ways and Means Committee, which writes the tax code. He backs the imposition of an income-tax surcharge on high earners to pay for health care, calling it “the moral thing to do.” Yet he can’t seem to figure out how to file his own taxes properly or, perhaps, legally.

Now, I also know lots of conservatives who are basket cases at everything other than reading and writing books and articles, giving speeches, and thinking Big Thoughts (likewise, I know liberals who despise conservative moralizing about sex and religion who nonetheless live chaste, pious lives themselves). The point is that conservatives don’t presume to be smart enough to run everything, because conservative dogma takes it as an article of faith that no one can be that smart.

This is exactly right. One of the basic tenets of libertarianism and capitalist economics – the principles that this country were founded upon – is that the only person qualified to make decisions for a person is that person himself and I’ve been meaning to blog on this for some time. I have a nice long post in my head on this topic for someday in the future if I can ever get around to it.

On the other hand, the actual hypocrisy that Jonah is talking about here might be that these guys -Barney Frank, Nancy Pelosi, Obama, and the rest of them – don’t actually think they can run things better or that they can accomplish the things they claim, and they know they can’t, rather, their actual reasons for doing what they do are different than what they claim. Anyone with half a brain can see that expanding government entitlements isn’t going to save money in the long run, nor is forbidding malpractice reform going to lower costs incurred by healthcare providers, but if the goal is simply to expand the size and power of the federal government in pursuit of craven political purposes and majority building, then they’re doing a bang up job and are clearly up to the task.

Maybe that’s not hypocrisy, but it is dishonesty.

Like I said, more on libertarian theory later.

Ed has a good post this morning on the growing debate over the constitutionality of health insurance mandates and the left’s solidifying position that of course it’s allowed because Congress can do anything if they say they’re doing it for people’s own good, which is obviously what the framer’s intended by “general welfare.” (No really, that’s what they’re saying)

So I’ll ask again: What authority does Congress have to mandate that people buy a product?  What precedent do they have to threaten people with imprisonment if they don’t buy a product merely for existing, as opposed to a prerequisite for accessing public roads as with car insurance?  The reason why Pelosi, Leahy, and Hoyer refuse to answer those questions is because they don’t have an answer to them.

I’m not so much going to focus on the specific post content, because Ed’s got the whole constitutionality argument covered, but there were some interesting comments on enforcing the mandates that I wanted to touch on.

As a bit of background, in all of the proposed healthcare bills containing an individual mandate, the mandate will be enforced by the IRS.

Now, knowing that the IRS will be the enforcer of this mandate, what can one logically conclude about the following statements?

its like taxes, pay voluntarily so you don’t get fined or thrown in jail.

If this monstrosity passes, I can all but guarantee you will see MILLIONS dare the feds to imprison them.

And here’s the rub with the individual mandate: yes indeed, paying income taxes is considered to be voluntary, but for tens of millions of people in this country, it’s voluntary only to the point where it’s also voluntary to go to work and get a paycheck. Yes, self-employed people (I’m ignoring corporations in this argument, because they aren’t applicable) have to actually write a check and have a little flexibility in deciding whether or not to write that check, but for millions of Americans, they pay their taxes every two weeks whether they want to or not. It’s called “payroll withholding” and it’s insidious.

They don’t withhold taxes from your paycheck because it’s more convenient for everyone that way (although that’s how they justify it). They withhold taxes from your paycheck because it makes you more docile and ignorant and easier to be lied to. This is why the IRS is always so interested in trying to classify people as employees when they might not actually consider themselves to be, because the IRS gets more money with less hassle that way and you’re not as informed about how much you’re actually paying.

So what does this have to do with the individual mandate? Like a lot of things, the actual enforcement mechanism will be a matter of regulation rather than statute, but my guess is that signing your paperwork when you start a new job will become something like registering your car at the DMV: you’ll have to show proof of insurance when you fill out all of the forms and if you can’t, they’ll just automatically take the fine/fee/premium out of your paycheck just like normal income taxes and it will be up to you at the end of the year to prove that you were really insured so that you can get an interest-free refund of the nominal amount they withheld. No one will be wiser and there will be no way for anyone to protest or otherwise not pay.

Just watch.

Baucus said the governors would be “pleasantly surprised” at their minimal burden. “The Medicaid costs, through the expansion, are not going to cost states near as much as feared,” he said.

Well gee, Max, thanks!

This quote embodies is the entire problem with our current government today, especially the Senate. The original purpose of the Senate was to act as a voice – and an advocate – for the respective state governments, and a check on the ability of the House to expand the power (and spending) of the federal government at the expense of the states. Instead, we now have a dysfunctional system wherein a United States Senator, from Montana no less, has the power and the hubris to throw policy mandates at the state governments to advance national partisan political ends and frames his actions as doing the state governments a favor. Senator, your job isn’t to come up with a mandate that isn’t as painful as would otherwise be proposed, your job is to make sure there are no mandates at all.

Instead, we now have DEMOCRACY! and the scope and power (and credit line!) of the federal government has now been growing consistently for pretty much 80+ years. This isn’t what Madison or Jefferson had in mind, is it?

I mean, seriously, it’s wee bit of inaccurate to use George Washington for this poster, but damn if it isn’t spot on:

Some things just get me going and the transformation of the Senate into a supersized version of the House over the past 100 years is one of those things.