Low Tax is Not What We Need

Low tax never made anyone’s life good.

Consider India. Millions of Indians pay no tax at all, and they are so miserable that suicide is at a record high. In the US, low tax means nothing to you if you can’t pay for your cancer treatment until you go bankrupt. We already have taxes that are too low.

Taxes too low!? How is that possible?

It’s very simple. The cost of a good life is not measured by how low taxes are. We forget that only the rich can afford high quality with low tax, because they can buy anything they want. That’s why they always want to cut their own taxes.

What we want is the best quality of life, and that’s very different from mere low taxes. Let’s attempt to determine what gives us high quality of life. Here’s what I think.

First, high quality of life isn’t very dramatic. The elements of a good life are pretty basic: clean air, clean water, safe housing, healthy food, competent medical care, and a few more. All of these will cost much more if they aren’t paid for with taxes.

We don’t really need public transit, right? But if we have nothing but private cars a simple trip downtown in any US city will cost a fortune, the trip will take much longer, and parking will be a bear. Good public transit is much better, and far cheaper. Scope it out yourself, beginning with car cost, insurance, and maintenance. Cars are damned expensive.

But perhaps medical care is the easiest element to illustrate why low tax can mean high cost.

It’s not a contradiction at all. As literally every modern nation except ours knows, the cost of national medical care is about half the cost of individually purchased healthcare.

Did that come through? We pay twice as much.

Look at it from the other end. Let’s say a new nation wanted to have health care for everyone. They might decide that $2,000 a year for every person is enough. That would work fine if everybody had the same income, because everyone would have the same advantages. Unfortunately, not everyone has the same income. Capitalists earn a lot, and the poor don’t earn enough to buy health care.

If health risks for the poor are not shared, any serious disease will easily kill them, which will cost everyone more. Repeal of the Affordable Health Care Act would cause 44,000 additional deaths each year. All of us eventually pay for these unnecessary events.

Back to our new nation. What happens if health care is paid for with private insurance? The cost for health care would be $2,000 plus the extra cost the insurance companies would add. Don’t forget that insurance premiums provide no health care at all, and capitalism demands that profit be maximized for the benefit of the owners.

In sum, we pay a lot of money to insurance companies that provide no health care at all, yet absorb a large part of the money spent on health care. And the poor are often left to die because they can’t afford the insurance. We have this gross malfunction even though we spend twice the money that countries with national health care pay.

There are other reasons we spend so much on health care. First, training for health care professionals is very expensive, which leaves new doctors with huge debt they must discharge through high earnings. In other countries the government pays for their training, and they don’t have to earn a huge salary just to get by. Second, the cost of medications is determined by capitalists, who, as we have seen, have no compunction about pure greed. They apparently do not understand that they are not making fly swatters, that health care is a sacred duty. Third, charges for care often have little relationship to the quality of care because they are controlled by profit-maximizing capitalists. In countries where the government manages all the elements of health care, all costs are kept at a fair and consistent level. Providers are paid fairly and everyone gets all the care they need, paid for with taxes, because that’s the most efficient and fairest way.

In virtually the same way, all the other elements of good living—clean air and water, healthy food, safe housing, and so on—are most efficiently paid for with tax revenue and/or managed by the government. Everyone benefits and the cost to individuals is much lower. Imagine having to pay for clean water by yourself—think Flint—with corporations allowed to dump whatever they wanted to into the water supply. Imagine your house wired by some dodo unclear on the concept of electrical codes.

But, some say, government just can’t do anything right. That is nonsense. Government services, from federal to local, are full of programs that are well managed and efficiently priced.

It’s not low taxes we need, it’s the best services, and that has very little to do with low taxes. Low tax virtually guarantees higher cost.

National medical care is not hard

This is why national health care plans always win out over our ridiculous greed-driven plan.

Just imagine you go in for a checkup and the doc gives you bad news. You have a cancer. Fortunately, it’s treatable. She schedules you for a CT scan and a number of other tests. You are scheduled to see an oncologist, who will be in charge of your case. You go in. The oncologist reviews your CT and your lab tests, and establishes a series of treatments that include the very latest developments. She consults with a nearby teaching hospital, which gives you a series of injections and medications that make your own body attack your cancer. After a number of treatments you are returned to health. Your oncologist monitors your health for years after your treatment. For this extensive and expensive medical care you pay nothing out of pocket.

Who gets paid, and how much? Everyone is paid a salary. Nobody gets money for scheduling extra tests. Nobody gets more for scheduling extra appointments. Or for prescribing a particular drug. Nobody’s salary is ridiculously huge; nobody’s is too low. The technologists and administrative personnel are also salaried. There are far fewer administrators because there are no insurance companies to pay. All pay follows a government pay scale, with adjustments according to locale, with extra pay in occupations and in places where there is extra need. All personnel earn more with longer service and more advanced expertise.

The government pays off the educational debt of newly minted physicians. They do not need insurance, because the government treats all conditions, including bad outcomes, and accommodates patients who were injured by their treatment. Each doc’s practice is monitored by government agencies, and extra training is required in the case of deficiencies. The government requires continued training to keep them up to date.

Every person in the country receives unlimited medical care paid through taxes. Health care workers are salaried, and all products, including medicines, are not allowed to be exorbitant as at present.

Is national health care free, as we so often hear? Of course not. It’s paid for through our taxes. But paying for it through taxes means it costs 50% of the market-driven cost we pay now.

Here are some of the reasons we pay so much now. Docs graduate with enormous education debt, which requires them to earn a high salary from the first. They also pay huge malpractice insurance premiums. The technologists in their service are paid moderately. The many administrative personnel who are required to manage the massive paperwork required by the insurance companies are paid the least the system can get away with.

But insurance companies are the biggest reason our health care costs so much. Insurance companies try to minimize all services in order to maximize profit for their shareholder owners. They pay full time people to disallow medical care. They may disallow expensive tests. They may refuse to pay for the treatments the doctor requests. They may refuse to renew any patient’s insurance, or even pay for treatment if the patient’s condition is presumed to exist prior to signing on to their insurance plan, or even if they decide it’s too expensive. Their upper executives are paid tens or even hundreds of millions of dollars every year. Stockholders expect a significant return on their investment.

The result is that our healthcare costs literally double what other countries pay. Double! Moreover, the quality and success rate of our medical care is inferior to many others, not to mention that many Americans have no insurance at all, and their health suffers for it. Lack of insurance often results in medical bankruptcy, or death from untreated conditions.

And yet conservative Republicans will not even consider proven superior systems. Why? Mostly because that would remove the possibility for the top administrative officers to become billionaires, and it is Republican dogma that says making the rich still more rich will somehow benefit the country. In spite of years of claims to the contrary, Republicans simply do not have a viable plan for health care. That is because they insist on a for-profit capitalist plan, and not a single dollar of the billions spent on for-profit insurance goes toward medical care of any kind.

The real purpose of our present plan is to maximize profit and executive pay.

Why Homelessness Won’t Be Solved by Itself

The San Francisco Chronicle ran an admirable series on homelessness—on the front page. Like everywhere else, the city has spent many millions to help solve the problem, and it has only gotten worse. That’s because homelessness is not a city problem. It’s not even a national problem. At base, it’s a global problem, closely related to the concentration of the nation’s and the world’s wealth in the hands of a few people who have absolutely no use for it.

Homelessness is not one single problem. Locally, the two most significant factors are unemployment and substance abuse. The former is no doubt the far bigger factor, in spite of what some people think. To those people, mostly white conservatives who believe because they were always able to find work, anyone unemployed is simply not trying hard enough. Oddly enough, the same people also believe that all homeless are addicts. In neither case do they think that economic conditions might have something to do with it.

Homelessness is not caused by the homeless. It is caused by the economy.

I will leave addiction for another time. The biggest element of homelessness is unemployment, and many of the personal tales are heartbreaking. Millions of people with decades of dependable skilled work were tossed aside when factories closed, their jobs shipped off to poor countries where the bosses pay a fraction of US wages, and workers are too desperate to demand more.

The newly jobless family is unable to find equivalent work, and falls behind on the mortgage and bills. Eventually they settle for beginning-level wages, which don’t pay the bills. They downsize, sometimes unable to sell their house in a down market, which is then seized by the bank. Sometimes they can’t find work because they are “too old”, which can be anything from 40 on up. Sometimes everything fails, and they have no choice but to live in their car, or a tent.

However, the loss of work because of modernization is a greater factor than outsourcing jobs to the Third World, although they are related. As I have said here and here, more and more of the work we depended on is being done by robots and computers. Some of this modernization calls for employees with new skills, but many more jobs simply vaporize, their workers pushed out to fend for themselves. Jobs in management aren’t shielded from this trend, either, if for no other reason than the analytical work by management, as well as software coding, can be done at 25% of the cost by workers in India and elsewhere.

Not all is lost, however. Effort in at least four areas can create higher levels of employment. These are: (1) a shorter work week; (2) better laws that provide universal citizen needs at greater efficiency; (3) laws that keep jobs and money in the country; (4) and changes that attenuate the greed of the very rich and the corporate bosses.

As I have said before, my half-humorous suggestion for determining the work week was to divide the grand total of hours of work available by the grand total number of workers. In principle it’s actually a good idea. It would give us a work week of 20 hours or so, which would give us some of the benefits that modernization should provide.

Getting to a 20-hour week is not simple, because workers can neither suddenly be paid half as much nor can they be paid the same for half the work. But we did it to arrive at the 40-hour week from 60 hours, so it is quite possible.

The federal government can do numerous things to make living under the new situation comfortable. Conservatives who believe that a sort of anarchy with few laws and minimal government is the best way are simply wrong. That would give us more crime and less efficiency.

We have laws because not everyone can be trusted to behave for the common benefit, obviously. Besides individual criminals, corporations and the very rich dependably behave in ways that reduce everyone else’s wealth and wellbeing while increasing their own. This has given us the current plutocracy, which, if we are to restore our democracy, must be overthrown one way or another. But that will not happen as long as the very rich and their congressional pets control the government. The once-reasonable Republican party has gone berserk, and is no help. It will take great Democratic strength to rescue the country from itself.

The laws that have taken away from the common good must simply be ended. If a practice cannot be shown to be socially worthwhile, it should be outlawed. It’s not hard to think of examples. Flash trading and hedge funds have no social utility at all; they do not benefit the country in any way. Giant banks must return to boring old banking, and shed their investment services. This is something the Great Depression taught us, but we forgot. Corporations must not be able to avoid their fair share of taxes by setting up a shell headquarters in some low-tax country. All the tax dodges set up by the very wealthy and their congressional pets must be ended. There is no reason the very rich should own such a huge part of the national wealth, because the only place it can come from is the rest of us.

Rather than clutching their pearls and watching corporate bosses rake in multi-millions for sending jobs to poor countries, Congress should enact any number of laws that discourage them from shipping jobs out and closing the mill. Simply requiring all foods to be pure and without known chemicals and impurities, and labeled GMO if they are, would not only improve the quality of our food, but would eliminate carelessly produced foods from overseas. Modernizing factories could be encouraged with financial incentives. Many small steps would improve the employment picture.

Corporations have taken to setting up an office in a low tax country and calling that the corporate headquarters to avoid paying taxes. There are many ways that could be curbed, including designating such companies foreign companies, subject to taxes and duties greater than those for domestic companies. The global economy is complex, but our laws should not allow the US to suffer for the benefit of corporate officers.

In all cases of universal citizen need, the federal government must manage that need, because profit-making interests will always cost significantly more. Every such step we take improves the wellbeing and wealth of the country. National health care is the most obvious instance. National health care insurance would provide the average equivalent of a seven percent raise. The simplest example of benefit here is the avoidance of unnecessary death from untreated disease. An adult who dies unnecessarily costs the country a lot, which falls on the deficit side of the national accounting. There are many other possibilities for national services besides health care that would improve the financial security of all citizens.

These things are so obviously beneficial for the country it is ridiculous to believe we’d be better off without them, as Republicans claim. The federal government is efficient, in spite of what Ronald Reagan claimed, and requires fewer people to do the same work, without the severely bloated wages of corporate bosses.

Right now the government seems to have no understanding of what causes homelessness, nor have more than a handful of people suggested what we can do about it. I believe that the ways I have suggested are well worth discussion and development. I believe they would cure or improve several serious problems. Unfortunately, one political party, the one that caused most of the problems in the first place, would rather defend the plutocracy.

Ending Economic Decay

The writer Paul Theroux is like no other. He’s prolific, and a restless world traveler, and he has no interest in the places where people have money. His travels have taken him to the poorest parts of the world. His most recent travel book is Deep South, a chronicle of slow trips through the forgotten places left behind by the interstate highways, with factories abandoned after business moved to Bangladesh. There is no money, no work.

And yet every single day, the world’s money flows in great flooding cascades of cash, billions upon billions, in and out of laundering facilities on small islands and banking nations like Switzerland. Theroux quotes the 19th century Portuguese writer Almeida Garrett, who observed the poverty in his own country and posed the question, “I ask the political economists…if they have ever calculated the number of individuals who must be condemned to misery, overwork…and utter penury in order to produce one rich man.” Garrett understood money well.

Our government could begin improving our economy by addressing the blatant violations of law by some of our richest citizens and corporations. Hiding money offshore is illegal, and should be punished with prison sentences, which would—ahem—“encourage” moral behavior, since nothing else does. Corporations that move headquarters overseas should be treated like foreign corporations, complete with import duties on their products and fees for usage of US infrastructure. Most important, since foreign corporations are already forbidden from influencing the American legal process, the lobbying they now do should result in significant penalties, including prison, if continued.

It is part of our great unfinished business to do something about our national poverty. The poorest Americans, in cities like Detroit as well as the obscure decaying towns of the rural south, lack the essentials for a decent life, and it’s not because of laziness or moral failure. It is because there is no work or money to be had. Millions live in severe unrelieved poverty, and it’s not their fault.

Where is the wealth? We all know. Half of all our national income goes to a few very rich people who have no need for more money, but keep it hidden anyway. The US is the richest nation in the history of the world, and yet we have failed completely to provide work and essential income for those millions of people in the poorest parts of the rural south and elsewhere. They don’t want or need to be rich; they would never be wealthy in the common use of the term, but were once wealthy enough. Now they are not even that.

The federal government does spend money to help poor people, but what people need is a way to build their own future. We need new laws and rules that prevent abusive capture of money by the very rich, regulations that encourage domestic industry, plus modern work week hours and living wage laws.

National health care insurance is probably the most important single thing we could do to improve the lives of the poor. A healthier population sharply reduces the significant money lost to illness and death. Not only would it save billions of dollars and millions of lives, it would remove a major disadvantage for companies that compete in markets where national health care is the norm.

When we look at the deep poverty found in the rural south, we see that every part of life is affected by this poverty. That includes the schools. The young do not receive a modern education because desolate state and local economies cannot adequately fund schools. If all Americans are to be educated well, funding must be equal for every student in the country. This cannot happen if a significant part of funding comes from the coffers of very poor states like Mississippi. With equal funding we would have a much better work force, ready for business rejuvenated by improved laws, as well as an intelligent and informed citizenry able to bring more wisdom to the world. This would in time diminish the scourge of ignorance from bad education, of belief in superstition and magic, and of failure to understand science we see even in certain members of Congress.

Austerity, whether a result of unaddressed economic evils or of backward bank practices that prevail in Europe, results in a downward spiral for the people. Investment in the economy, such as with President Obama’s 2009 fiscal stimulus and the Affordable Care Act, has the effect of putting money in the hands of lower income citizens, who cannot afford to hoard it. The money circulates, and improves the local economy.

Dragging the moribund economy of the old south into the 21st century is more important than we commonly believe. Those who suffer include the crabby rednecks who hate Obama, but who deserve a better roll of the dice along with the rest of us, and it will only happen with bold national practices like those I mention here. For nearly a half century, money has been taken out of the hands of these everyday Americans and put in the hideaways of the very rich. This has created unrelieved cruel poverty, and it must end.

Dying For Lack of Opportunity

The death rate for white males in their middle years has skyrocketed because of suicide and drug overdose. These are people who have been denied the American dream. Their jobs disappeared, along with their house, their medical care, and their retirement. Their very lives.

People who have faced such depressing conditions become depressed, naturally. The longer it goes on, the more likely they will become dependent on alcohol or the other dangerous drugs that are so readily available everywhere. The longer they are depressed, the more likely it is they will kill themselves.

When these conditions affect the black population, self-righteous whites put on their church pins and tell them to man up. Get a job. They are not saying those things now, because the ones affected are white. There are no jobs of any kind in lots of places, other than a few part-time minimum wage gigs. Nothing you can live on.

Where did the jobs go? Many were shipped overseas by corporate bosses, where desperate people are forced to work under conditions that would be illegal here, and for pennies on the dollar.

But the other condition, which nobody is talking about, is the absorption of jobs by new robots and computers that aren’t paid a wage. We can’t even see this huge dilemma, because its onset has been insidious over decades, and it’s ubiquitous.

What began as a novelty is now the norm. Take the job of inventory of stock. Today’s young adults were not around to know that there were businesses whose sole purpose was to take inventory for companies that hired them. They came to work after a store was closed for the day, and a large crew counted everything in the store and wrote it down on paper. Later, the managers tallied these counts and presented their report to the store.

All those jobs are gone. Inventory today is continuous and invisible. Each new item is scanned into the computer, and each sold item is automatically deducted from the inventory count. If an item becomes depleted, the computer tells when to order more, or does it automatically. There’s no such thing as an independent inventory, and computers perform dozens of other business services that used to require employees.

Likewise, robots have taken over large parts of manufacturing in every realm. Even things like certain types of surgery are on the verge of being performed by robots, which are much faster than human surgeons.

This modernization came on over a long period, and the evidence is scattered, so it’s not easily seen with casual observation. But it’s everywhere.

Perhaps skilled laborers are the most heavily affected by this modernization, but in actuality, new machines are absorbing jobs at every level from unskilled labor to CEO, and some of the displaced from every kind of work end up on the street, helpless before the new reality.

This, I believe, is one of the reasons that homelessness is not being solved. Every year there are additional people forced from their homes and their former lives into the streets, into tents.

My belief is that there are two things we could do to help solve the condition. First, shorten the official work week to 30 hours or less, which would mean more people working. This is not a radical change. There were regular reductions of the 72-hour work week before we reached 40 hours. Second, require all employers to pay a living wage for 30 hours of work. High enough earnings to supply everything necessary. Living wage does not hurt business because employees must spend what they earn to survive, which is fed directly into the local economy.

The federal government could greatly help the nation’s people by passing several wise laws, such as improved Social Security and initiation of national health care, like every other nation did long ago. Note, however, that this modernization would make the insurance industry largely redundant. It’s also unlikely to happen any time soon because conservatives have labelled it “Socialism”, which they associate with Karl Marx and the USSR, whereas the proper model is the modern nations of Europe and Asia.

Until the cause of white decline is recognized, accepted, and conditions changed, we can expect more of the same: substance abuse, overdose, and suicide. It won’t go away by itself.

Saving Our Way to Strength

Being thrifty with our money has much to recommend it, but we cannot build national strength by failing to spend money where it is needed. Unfortunately, many Republicans and Libertarians fail to see this, and it has caused a great deal of difficulty. They believe that “The best government is that which governs least”. Catchy, but it would institute poverty and continually aging infrastructure.

Infrastructure has already decayed badly, but what Republicans really want to do is to rid the country of Social Security, Medicare, food assistance, and everything else that’s “unnecessary”. In spite of all evidence to the contrary, they believe that poor people have no one but themselves to blame for not being rich. Dumping all this “nanny state” stuff would at last force them to stand on their own two feet and get to work. A Republican governor said this using almost these exact words this week.

How anyone can believe this crap is quite beyond my comprehension. The argument can be demolished with two observations: (1) Worsening inequality creates more and deeper poverty, which would mean that laziness waxes and wanes; (2) Our record inequality is demonstrably the result of political policies that favor the rich, which would mean that laziness rises with gifts to the rich. These two observable truths negate their entire belief. The two cannot logically coexist.

Ongoing gifts to the rich have left huge chunks of the nation’s wealth in the portfolios of a handful of self-interested multi-billionaires. A few decades ago we stopped being a democracy and instead became a plutocracy when the wealthy gained enough power to control Congress. If this worsening inequality does not reverse course we will in time be in danger of a genuine armed revolution, because we are beginning to look more like pre-revolution France and less like post-revolution America.

This Republican belief that we can starve ourselves to greatness has been proven wrong so many times, so many ways that one wearies of thinking about it. No matter how many times St. Reagan expressed it, money doesn’t “trickle down” when the rich get tax breaks and other goodies of their own choosing. Money bubbles up from the bottom, starting with the poorest.

These government programs Republicans love to hate are the kinds of things that make the more advanced countries of Europe and Asia better places to live than the US. The reason is simple: a base of everyone in the country makes social plans as efficient as they can possibly be. Our private health care plan is dependent on insurance paperwork that takes one of every three dollars and provides absolutely no health care. This is why national plan medical procedures cost half what ours do, as do their medicines. We see too that national bureaus elsewhere are able to control prices, rather than Congress forbidding it.

Then there is the matter of infrastructure, meaning all the physical structures that allow the smooth functioning of the nation.

I live in San Francisco, and I’m very proud of the way the city spends money. For example, a few years ago it became apparent that the city’s sewage infrastructure was aged, some of it a century old. The issue was put to the voters, who voted solidly to begin upgrading, at great expense. Many of our cities experience frequent burst water mains and the like because they haven’t spent the money to modernize. Each failed pipe costs a lot to fix, and fixing it only delays the inevitable cost of replacing the entire system.

It’s like spending on your home. Having a new roof is not nearly as much fun as a couple of weeks in Maui, but if you don’t replace your leaky roof it’s gonna cost a lot more when the drywall and insulation get soaked.

Failing to spend money on national needs is not much different. The most obvious comparison is with the physical infrastructure that has deteriorated so badly that deadly accidents occur on a regular basis. A big bridge plunges to the river in Minneapolis. An old dam is breached in South Carolina. Trains derail all over the place, creating deadly fires, or colliding because the “new” safety features now over twenty years old were never funded. The electric grid is dangerously outdated, and could be hacked or just break down on its own. Air control systems experience failures, sometimes with serious consequences.

The count of badly decayed bridges, roads, and so on, is sky high, and is getting higher every year, and still we do almost nothing about it. We do nothing about it because Congress is controlled by people who don’t seem to understand that, first, a single bad accident is far more expensive than it would have been to fix the problem in the first place. Second, the longer we wait, the more expensive it will be. Delays in infrastructure repair and maintenance also have added costs in lost efficiency that is borne by business. When transportation routes are closed by a collapse the businesses that use them aren’t gonna like it.

In short, you can’t save your way to strength by cutting the budget for everything. Certain members of Congress think we will somehow be able to “save money” by spending nothing on the essential needs of all citizens and the infrastructure. They’re wrong. Tragically wrong.