December 28th, 2009

Money

Professor, eh?

'Cadillac' tax isn't a tax -- it's a plan to finance real health reform (Washington Post/Jonathan Gruber)

Now, I have no beef with him defending the tax. After all, if you want to suddenly insure millions of people, the money must come from somewhere, and it is unlikely that American Democrats will finance it by their own voluntary donations. So taxes it is, then.

The funny part is that this professor of economics at MIT is making it a main point that "the assessment proposed in the Senate is not a new tax; it is the elimination of an existing tax break". Uhm. Let us look at that again. If there is a tax break, then there is already a tax, it is just less than it could have been. Now it becomes greater than it was. How is that not new taxation? If it was your tax that suddenly increased, it would certainly "walk like a tax or talk like a tax", even if it was still lower than it could have been in a worst case scenario.

Neither of this is to say that the new taxation is not fair or anything. Your opinions on that will vary. But the defense is either stupid or dishonest and makes his cause look bad. It also brings a certain sense of despair on behalf of the brightest young minds of the western world, who are going to have this guy teach them economics.