Goverment Sponsored Healthcare, A Libertarian Value

Increasing the ability for a person to make decisions for her/himself increases his/her liberty.  Government sponsored healthcare does this very thing, and libertarians*, being proponents of liberty (or so I’ve heard), can get behind this very thing.

*A libertarian- A proponent of libertarianism, a political philosophy that upholds individual liberty, especially freedom of expression and action.

Goverment Sponsored Healthcare, A Libertarian Value

Government sponsored measures such as the Affordable Care Act increase financial liberty for a greater number of people than privatized insurance plans ever could alone (which anyone still has the liberty to buy).  Obamacare allows for the poorer segments of our population to have more financial options.  Under our capitalist system, I don’t need to tell anyone that having more money increases their number of options, be it to save, spend, or burn.  Indisposable income amounts to a much higher percentage of total income for poorer people than it does for richer people.  When someone has to choose between paying a hospital bill and paying rent, there really isn’t much of a choice to save money, consume at their liberty, or invest it.  With government sponsored healthcare, there is a choice: the poorer person is at liberty to choose whether they want to use the sponsored healthcare (allowing for more choices with the extra money), to pay out of pocket, or use a private insurance program.  And if they prefer Obamacare, anyone can use the money for something else of their choosing, spend, or invest, or bury it under the house.

The wealthiest people among us already have this liberty.  With vastly more income, they never have to worry about whether to choose between rent or healthcare.  Because of this, I do think the extremely wealthy should be taxed a higher percentage.  OK, this does limit their choices a little bit, maybe, but come on 1%!  Do you really need to buy a new yacht every year?  Can’t you buy a new yacht every other year and help provide that much more liberty for millions of people?

That having been said, let’s look at the current tax brackets (from about.com):

Single Filing Status

[Tax Rate Schedule X, Internal Revenue Code section 1(c)]

  • 10% on taxable income from $0 to $8,700, plus
  • 15% on taxable income over $8,700 to $35,350, plus
  • 25% on taxable income over $35,350 to $85,650, plus
  • 28% on taxable income over $85,650 to $178,650, plus
  • 33% on taxable income over $178,650 to $388,350, plus
  • 35%on taxable income over $388,350.

    Married Filing Jointly or Qualifying Widow(er) Filing Status

    [Tax Rate Schedule Y-1, Internal Revenue Code section 1(a)]

    • 10% on taxable income from $0 to $17,400, plus
    • 15% on taxable income over $17,400 to $70,700, plus
    • 25% on taxable income over $70,700 to $142,700, plus
    • 28% on taxable income over $142,700 to $217,450, plus
    • 33% on taxable income over $217,450 to $388,350, plus
    • 35% on taxable income over $388,350.

    Married Filing Separately Filing Status

    [Tax Rate Schedule Y-2, Internal Revenue Code section 1(d)]

    • 10% on taxable income from $0 to $8,700, plus
    • 15% on taxable income over $8,700 to $35,350, plus
    • 25% on taxable income over $35,350 to $71,350, plus
    • 28% on taxable income over $71,350 to $108,725, plus
    • 33% on taxable income over $108,725 to $194,175, plus
    • 35% on taxable income over $194,175.

    Head of Household Filing Status

    [Tax Rate Schedule Z, Internal Revenue Code section 1(b)]

    • 10% on taxable income from $0 to $12,400, plus
    • 15% on taxable income over $12,400 to $47,350, plus
    • 25% on taxable income over $47,350 to $122,300, plus
    • 28% on taxable income over $122,300 to $198,050, plus
    • 33% on taxable income over $198,050 to $388,350, plus
    • 35% on taxable income over $388,350.

I know how clumsy looking that is, the next one is better.  Unfortunately, I couldn’t get the pretty, bankrate.com, 2012 tax bracket to post.

And at the end of the year, the brackets could change back to this (from bankrate.com):

2002 federal personal income tax rates
For use in filing returns due April 15, 2003
(Ordinary taxable income. To see the rates for 2001, click here)

Tax rate Single filers Married filing jointly or qualifying widow/widower Married filing separately Head of household
10% Up to $6,000 Up to
$12,000
Up to $6,000 Up to $10,000
15% $6,001 – $27,950 $12,001 – $46,700 $6,001 – $23,350 $10,001 – $37,450
27% $27,951 – $67,700 $46,701 – $112,850 $23,351 – $56,425 $37,451 – $96,700
30% $67,701 – $141,250 $112,851 – $171,950 $56,426 – $85,975 $96,701 – $156,600
35% $141,251- $307,050 $171,951 – $307,050 $85,976 – $153,525 $156,601 – $307,050
38.6% $307,051
or more
$307,051
or more
$153,526
or more
$307,051
or more

Both of these charts are showing tax rates only on taxable income (yearly wages and such).  Not too bad, right?

One problem with the current tax code is that people who are making around $300,000 or $400,000 a year are lumped into the same category with people who make $1 million+ per year, a great deal (if not all) of the difference of this income being disposable.  Also remember that this is the tax code for individuals, not the corporate tax code.

The biggest problem with the tax code is its ineffectiveness at taxing the super wealthy.  This chart represents the average amount of taxes actually paid by each income group, taking the wildly low Capital Gains Tax into account (also take note that it’s an average rather than a range):

Quintile Average Income Before Taxes Effective Income and Payroll Tax Rate Income from Capital Gains, Interest and Dividends
Lowest $18,400 2.0% 1.3%
Second $42,500 9.1% 1.6%
Middle $64,500 12.7% 2.5%
Fourth $94,100 15.7% 3.7%
Highest $264,700 20.1% 21.4%
Top 10% $394,500 20.7% 26.7%
Top 5% $611,200 20.9% 32.1%
Top 1% $1,873,000 20.6% 43.4%
Top 400[9] $344,831,528* 16.6% 81.3%
*Adjusted Gross Income(AGI)

So, $94,100 is 15.7% and $344,831,528 is 16.6%.  Yeah, the wealthiest being taxed a little more would alleviate a lot of the American taxpayer’s burden, thus creating more financial options and therefore more liberty to decide what’s best for themselves.  Capital gains primarily benefit the wealthy and should also be taxed progressively.  If this was truly a progressive tax system, the wealthiest would be paying the largest share of income, once again, that is almost exclusively disposable.

The argument has been made that increasing taxes on the wealthiest individuals will result in job losses, as they would be less likely to invest in and consume from businesses providing goods and services.  The problem with this argument is there is no obligation for wealthy people to do so.  Just like poor people, the wealthy may be burying their millions beneath the house and contributing little to the economy.  It could be anywhere from 0-100% of the wealthy (400 people or 1% of people or what have you) who are helping the economy by consuming or investing.  What’s wrong with that?  Nothing.  Except that their tax rate (primarily capital gains) is way too low compared to the other brackets.  We should require some investment by taxing them a little higher.  Investment, as in the case of healthcare, for liberty.

So we’ve taxed the super rich a little more.  Why bother with additional government expenditure for healthcare when people could pay for it with their bad-ass tax cuts?  Life is a precursor to the pursuit of liberty, as in life, liberty, and the pursuit of happiness.  Healthcare costs range from tummy-ache cheap to life-saving, long recovery expensive.  Insurance companies can’t be counted upon to provide life-saving funds to “high cost” or “high risk” buyers, especially among those in lower income families.  And among lower income families, even their total income may not be sufficient enough to pay for care.  Care that could be life-saving allowing for liberty, etc. you get the idea.  In her own words,  one of my favorite bloggers provides further evidence on how families are still falling through the cracks.

I know some of you have bought into the sensationalism spread by fear-mongering insurance providers: that private insurance rates will increase as a result of government healthcare, thereby limiting choices.  This spits in the face of free market capitalism and I can’t believe anyone buys into the mania.  With another competitor in the field, insurance companies will have to sweeten the deal either by lowering private insurance costs or improving benefits and services to remain competitive.  If not, they’ll be forced out of business, as they damn well should if they’re unwilling to compete.  But I’ll wager that the cannier businessmen would rather adapt to market forces than roll over and die in the face of competition.

So, combined with a progressive tax, upholding and even expanding Obamacare increases financial liberty for the vast majority of people.  Costs to most taxpayers are widely offset with the implementation of a better progressive tax, and a tiny number of the wealthiest need only sacrifice their financial liberty by limiting themselves to buying an island paradise every other month rather than every month.  Additionally, cleaning up and eliminating pork spending would free government cash to implement liberty increasing measures such as decreased taxes for most Americans, increasing the minimum wage, and of course, the Affordable Care Act.

About drexceptional

I'm Nick Wiley. I once considered a military career, but changed my mind knowing that within two weeks they'd promote me to general. Then I'd be bored.
This entry was posted in Philosophy, Politics, Society and tagged , , , . Bookmark the permalink.

One Response to Goverment Sponsored Healthcare, A Libertarian Value

  1. Pingback: “Why don’t you like Ron Paul?” He’s a rightwing Republican regarding reproductive rights | drexceptional

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