Interesting notes on health care decision
The blogosphere is abuzz today with early reaction to the Supreme Court's decision upholding the constitutionality of the Affordable Care Act (ACA) - a bill that, ironically, is neither affordable nor has any impact on the availability of health care.
(It does change the rules for buying and selling health insurance, but possession of health insurance and access to care are two different things. Just look at the benefits currently promised by Medicaid. On paper, they're more generous than any corporate health insurance plan in America. In practice, however, Medicaid recipients already have a difficult time receiving any of the promised benefits because the program under-reimburses providers. Recent surveys show that only 40 percent of physicians accept all new Medicaid patients.)
There are some interesting aspects to the Court's decision. Although, for the most part, the Court upheld the bill's constitutionality, it significantly altered the legal rationale offered by the Obama Administration.
The Court changed two major aspects of the bill, and these changes will have a major impact on the health care policy debate moving forward:
Finding #1:
The majority opinion reverses the President's pronouncements that the fine to be levied against individuals who not purchase a government-approved health insurance policy is a "penalty" and not a "tax." Instead, says the Court, this "penalty" has the effect of a "tax" and, therefore, should be classified as such.
This change in terminology is critical, because the Court finds that the ACA is only constitutional based upon Congress's taxing authority and the General Welfare Clause. If the fine was truly a "penalty" and not a "tax," as the Administration alleges, then the Court would likely have found no constitutional authority for the bill. While the the government claimed authority to impose the penalty under Congress's power to regulate interstate commerce, the Court strongly disagreed. In the Court's words:
The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to 'regulate Commerce.'At the least, this aspect of the Court's opinion makes it very clear that the ACA effectively imposes a huge tax increase on the middle class.
Implication:
The most significant implication of this change in understanding, however, is that, by clearly moving the individual mandate into the category of tax policy, the Court has subjected the provisions of the ACA to the annual budget process.
That means Congress can effectively kill the ACA by removing the tax in any given year. And, since all appropriations bills must originate in the House - currently controlled by opponents of the bill - the fight over ObamaCare may just be beginning.
Finding #2
The Court ruled that Congress cannot force the states to pay for its envisioned entitlement expansion.
As NPRI has highlighted extensively, the ACA aimed to expand health insurance coverage in two ways. First, it would require states to expand Medicaid eligibility rules to include all individuals living at up to 133 percent of the Federal Poverty Line, including childless adults. Because of the mandate (now classified explicitly as a tax), all eligible individuals were expected to enroll in order to avoid the new penalty (tax). Second, it would provide federally financed subsidies to individuals and families living between 133 percent and 400 percent of the Federal Poverty Line to purchase insurance on the new state or federal exchanges.
The Medicaid expansion component was expected to compel state taxpayers to divert billions of dollars away from schools, prisons, police and fire safety and other major state expenses in order to finance Congress's health care agenda. As NPRI's analysis shows, the expense to Nevada alone would have approached $5.4 billion by 2023.
The ACA originally declared that if states did not comply with the Medicaid expansion, they would lose all federal matching funds for Medicaid - including funds dedicated toward the benefits that were already in existence.
The Court found that Congress lacks the authority to compel state action in this manner. So, according to the Court, states do not have to divert money from education and other policy areas to Medicaid if they do not want to.
Essentially, the Court echoed a message that I have been saying since the ACA's passage: If Congress wants to create a huge new entitlement program, then Congress - not the states - should pay for it.
Implication
Cash-strapped states - 49 of which have balanced budget requirements - have little incentive to expand their Medicaid entitlements as Congress had hoped.
That means that a new "doughnut hole" will emerge in states that do not offer Medicaid coverage for all individuals up to 133 percent of the Federal Poverty Line. In Nevada, for instance, individuals living between 100 percent and 133 percent of FPL will be ineligible for both Medicaid and the federal subsidies to purchase insurance on the exchanges.
That doughnut hole could spark a new drive in Congress to amend the ACA so that federal subsidies would be available to all individuals below 400 percent of FPL who are not eligible for Medicaid. This, of course, would come at great expense the federal government, exploding the costs of the entitlement.
At the same time, it appears that the "maintenance of effort" requirements placed on states by the ACA would also have no effect under the Court's ruling. This means states will have every incentive to drop out of Medicaid entirely with the expectation that Congress would provide subsidies to all formerly Medicaid-eligible individuals to purchase insurance on the exchanges.
Congress wanted to impose substantial new health care liabilities on the states with its passage of the ACA, but now the battle over "who pays for what" could eventually lead to even greater expenses for the federal government and a potential dismantling of Medicaid.
Conclusion:
Some will say the fight over ObamaCare is settled now that the Supreme Court has ruled, but in reality, the Court has just cleared the way for a longer, more protracted fight.
Read moreNPRI: Supreme Court ruling on ACA deals blow to liberty, undermines efforts to deliver quality, affordable care
LAS VEGAS - Responding to news that the U.S. Supreme Court has ruled that the Affordable Care Act's "individual mandate" provision is constitutional, but only if characterized as a federal tax, Joseph Becker, chief legal officer and director of NPRI's Center for Justice and Constitutional Litigation, issued the following comments:
Today's U.S. Supreme Court ruling that the individual mandate provision of the Affordable Care Act can be constitutionally spared but only if characterized as a "federal tax" results in a practical and significant blow to individual liberty. On a more positive note, the Court did hold that the individual mandate was outside the federal government's powers under both the "Commerce Clause" and the "Necessary and Proper" clause, indicating there remain at least some limits to federal regulatory powers.The Court's ruling confirms, however, the central point of an amicus brief joined by NPRI's Center for Justice and Constitutional Litigation. The amicus brief - linked below - states that if the mandate were upheld using the "Commerce Clause," no one could realistically claim that the U.S. Constitution limited federal power. The brief was authored by Timothy Sandefur of the Pacific Legal Foundation and Ilya Shapiro and others from the Washington, D.C.-based Cato Institute, and co-signed by the Competitive Enterprise Institute, 13 other liberty-minded organizations and a bipartisan group of 333 state legislators.If the taxing power of the federal government includes the power to impose a tax higher than the cost of purchasing the government-ordained good, however, when faced with the choice of a $5,000 tax or a $4,000 insurance policy, most would, as a practical matter, opt for the latter - a huge loss of liberty as a practical matter.Our nation's founders intended the constitution to greatly restrict the power of the federal government, but unfortunately, this ruling further expands federal authority. Not even King George believed he had the authority to compel colonists to buy the tea tossed overboard in Boston Harbor, yet we now have an expansion of federal authority which, through the force of taxation, mandates as a practical matter that citizens must buy private-sector goods.As illuminated by Justice Scalia in the dissent, the Court went to great lengths to find any justification to uphold the individual mandate, even to the extent of reclassifying as a tax what had been established as a "penalty" for failure to purchase the government's preferred product.
Geoffrey Lawrence, deputy policy director at NPRI, noted that there are sound policy changes suitable and available to improve health care. Said Lawrence:
Just because the Supreme Court has ruled that the Affordable Care Act is constitutional doesn't change the damage this flawed policy will do to individuals in America's health care system.Read more:
The primary shortcoming of the health care industry is that government policies have induced too much cost-shifting and neutered the effectiveness of the price system. The ACA just doubles down on this shortcoming by increasing the degree of cost-shifting to ludicrous proportions.Small businesses will pay more, families and individuals will pay more, and states could pay more. Perhaps politicians will be able to successfully create the illusion that this is not the case by shifting most health care costs off onto various classes of taxpayers, but the end result is that Americans will now pay even more for health care - even if they do so indirectly.Everyday Nevadans are already beginning to feel how this maze of cost-shifting will affect them. The ACA has already forced businesses to close. Individuals are being forced to drop their private insurance for inferior government plans.The silver lining in this decision is that states will have the option not to pay billions more in Medicaid costs. If Nevada elects to participate, ACA's Medicaid expansion will cost the State of Nevada $5.4 billion in the next decade.Long-term solutions in health care will only come when governments at both the federal and state levels stop interfering in the market place. In order to restore a sense of order and cost control in the health care industry, policymakers need to restore the characteristic organizing feature of all markets: a functioning price system. Consumers need to have greater control over the use of their own health care dollars and providers need to be held accountable to the demands of discriminating health care consumers.Fortunately, a solution already exists for restoring this price-sensitivity to the health care industry: health savings accounts, or HSAs, combined with "catastrophic care" insurance coverage. HSAs return control over health care decisions to patients and cut out the bureaucratic middlemen by giving the patient a non-taxable individual spending account from which the patient and patient's doctor can make decisions over planned medical procedures. "Catastrophic care" insurance coverage, on the other hand, insures against the unforeseen - the true function of insurance. When patients and doctors control health care finances, the market can efficiently allocate health care resources, and any need for bureaucratic rationing evaporates.
- U.S. Dep't of Health & Human Services v. Florida, amicus brief on individual mandate
- Cato @ Liberty: Cato's final Obamacare brief - on the individual mandate - joined by 16 other groups and 333 state legislators
- The Impact of Obamacare on Nevada's Medicaid Spending
- To fix health-care costs, begin with prices
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Reuters article details how anti-foreclosure laws are extending Nevada's housing slump
Liberals love to claim that the free market hasn't fixed Nevada's housing crisis, but as this Reuters article shows in devastating detail, government is to blame. Government has not only failed to fix the housing crisis, but its interfering with the marketplace has worsened Nevada's foreclosure problems.
State and federal laws enacted to protect homeowners from eviction in the wake of the 2008 housing crash may be extending the slump, according to a growing number of economists and industry experts.This article needs to be read in full, especially by every legislator who supported AB 284, which has harmed responsible homeowners and deepened Nevada's housing problems.
Foreclosures have all but ground to a halt in Nevada, which passed one of the stiffest borrower-protection laws in the country last year. Yet the housing market is further than ever from recovery, local real estate agents say, with a lack of inventory feeding a "mini-bubble" in prices that few believe is sustainable.
A recent U.S. Federal Reserve study found that in states requiring a judicial review for foreclosure, delays associated with the process had no measurable long-term benefits and often prolonged the problems with the housing market.
Data from housing market researchers points to similar conclusions.
"Many state laws that stretch out the period for legitimate foreclosures result in no added benefit for the homeowner and produce harm to the housing finance system and to neighborhoods," said Alfred Pollard, general counsel to the Federal Housing Finance Agency, at a House of Representatives oversight hearing in March. ...
According to the National Conference of State Legislatures, a bipartisan organization serving the legislators of all 50 states, more than 400 foreclosure laws were enacted across the United States in 2011 alone, and most slowed down the process.
The Nevada law, passed during the legislative session and then implemented in October, may be the most stringent: It imposes criminal penalties on lenders that try to foreclose without the proper paperwork. That has led to a dramatic drop in foreclosures in a state that was among the hardest-hit by the housing crash.
In September, banks filed nearly 5,000 foreclosure notices in Nevada. By February, just 460 were served, according to online foreclosure property marketplace RealtyTrac.
Ricky Beach, a real estate agent in Reno, Nevada, said the new law, AB 284, "has pretty much killed the market here." The lack of foreclosure activity has led to a dearth of inventory, he said, with the number of homes for sale in the area down to 778 today from more than 1,700 in September.
This has triggered a "mini-bubble" in housing prices because the few properties available are receiving multiple bids. The only problem: No one thinks the gains are sustainable.
"The bill did nothing to solve the crisis - it's just prolonged it," Beach said. "Sooner or later the banks will work out how to deal with the law. And then foreclosures will hit the market, and prices will crash back down."
Malik Ahmad, a Las Vegas foreclosure defense lawyer who has spent the last six years trying to help vulnerable borrowers deal with unscrupulous banks, said the law had completely changed his view of the nature of the crisis.
"This law has become a mockery," Ahmad said. "I am now turning down clients every day who I know have no intention of ever trying to pay their mortgage. They just want to stay in their homes for free. And that is a bad situation for everyone, lenders and homeowners."
So what should politicians at the state and federal level do? Let the market work. As I wrote two years ago:
What do our politicians need to do? The same thing they needed to do 16 months ago [written in June 2010]. Let the economy retract in the short term in order for individuals to move assets from low-value industries to more productive sectors of the economy.Nevada's tried government solutions for its housing problems. Government has failed. The answer is the market, not more government interference.
During recessions, in a free-market system, the economy moves money and jobs from low-performing areas to higher-performing ones. And when I say "the economy," I mean millions of individuals acting in their own self-interest. The economy isn't a giant organism that has a mind of its own.
This reset is necessary and healthy, because resources (natural resources, products and people) are scarce. Keeping limited resources in low-value sectors of the economy and not allowing them to move to high-value sectors limits economic growth.
To use an analogy, it's like pruning a tree. In the short term, the tree is smaller, because you've cut back in some areas. But those cut backs are necessary to stimulate growth in the long term. Without those cuts, the tree won't grow as large and may even die.
Let's also use automobiles as a historical example. Before cars, people still needed transportation. They just used horses and buggies. As cars replaced the horse and buggy, the horse and buggy manufactures were hurt. Consumers no longer needed their product (at least not on such a large scale). Employees lost jobs. Large businesses closed or were forced to retool. This is the kind of economic reordering that happens every day in the free market. And for consumers, it's good that this happens.
Unfortunately, the government often prevents the necessary corrections from happening.
Letting CCSD teachers know they have the option to leave CCEA
Last Thursday, two CCSD teachers and I offered public comment to the Clark County School District board meeting letting the trustees and the public know that CCSD teachers can opt out of the Clark County Education Association from July 1 to July 15. Details on how teachers can do that are here.
After the board meeting, another teacher and I discussed why so many teachers want to leave CCEA on Face to Face with Jon Ralston.
Do you know a CCSD teacher? If so, will you let them know that they can leave CCEA, but only by submitting written notice between July 1 and July 15. NPRI has made a generic opt-out letter available here.
Also, teachers should know that alternative educator associations, like the Association of American Educators, offer similar or better insurance plans and legal protection for any employment issues for far less money than CCEA charges. AAE membership is only $15 a month, while CCEA costs teachers $64 a month. You can learn more about AAE here.
Teachers should be able to make the choice that's best for them. Help us let teachers know what their options are.
Help NPRI help teachers
Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them. Just enter your email in the box on the top right.
For today's week-in-review email, Andy asks for your help in letting Nevada's hard-working teachers know that they have a chance from July 1 to July 15 to leave their union.
Imagine you joined a CD club or a book club. Maybe you thought it would be fun, or perhaps your friends pressured you into joining. In any case, imagine that after a few months, you realize the club just isn't for you.
You call the club's contact number and explain that you want to leave. However, you're told that the only way to leave is to send written notice during a narrow window, which happens to fall during the two most inconvenient weeks of the year.
Naturally, you'd be outraged. The First Amendment protects all citizens' right of association and, by implication, their right to terminate an association.
Unfortunately, the scenario described above isn't so hypothetical for public-school teachers in Nevada. Teachers in both the Clark County Education Association and the Washoe County Education Association are only allowed to leave their respective unions between July 1 and July 15. (The opt-out period is similar for most other Nevada teachers as well.) This is a time when most teachers are on summer vacation and, understandably, are trying to forget about school-related matters.
Make no mistake: The timeframe is not an accident. It's part of union officials' efforts to effectively deny teachers their ability to choose whether or not to stay in the union.
That's why we at NPRI are working hard to let teachers know they have this choice. And because teachers have only that two-week window, from July 1 to July 15, to act on their decision, we need your help to get the word out.
While we've been doing everything we can to let teachers know about their options, we don't know every teacher in the state. But among your friends and within your circles of influence, you probably know several teachers. So I'd like to ask you to consider doing a few things to help us in this effort.
First, please forward this to teachers who may be interested in knowing more about their options. Second, send those teachers this NPRI commentary, which lists several reasons many teachers are choosing to leave the Clark County Education Association (reasons that have to do with union problems all over the state, not just in Clark County). And third, encourage them to contact NPRI if they would like any additional information.
By the way, it's worth noting that teachers who opt out of the union are entitled to the same pay and benefits as those who are unionized. And if teachers are concerned about losing liability insurance or representation, there are numerous alternative professional associations for teachers that offer better coverage than what the unions provide - and for far less money.
For instance, the Association of American Educators offers teachers a $2 million liability insurance plan and legal counsel for any workplace employment issues. The cost is only $15 a month. In contrast, CCEA takes $64 from its members each month, but only offers $1 million in liability insurance. You can learn more at AAE's website.
To make it as easy as possible for teachers who wish to leave CCEA to do so, we've also provided a generic opt-out letter here. For teachers outside of Southern Nevada, a similar letter addressed to their union will work.
NPRI believes firmly that teachers should be able to leave their union whenever they want, but until that happens, teachers should at least be aware that the timeframe to do so - July 1-15 - is fast approaching.
Will you help us let teachers know they have a choice?
Even seemingly small steps, like forwarding this e-mail or sharing this commentary on Facebook or Twitter, can make a big difference in letting teachers know about their options.
Thanks for reading, and I'll see you next time.
Andy Matthews
NPRI President
Remember, if you'd like to receive the latest from NPRI, sign-up for our emails here. Enter your email address in the box on the top right.
Politicians vs. entrepreneurs
A great, great post from Burt Folsom on the differences between government officials and private businessman and the noble work entrepreneurs do for society.
Second, entrepreneurs have improved the quality of life for almost everyone in the world. Life expectancy in the U.S. was 47 years in 1900, and is about 30 years more than that today. If you are over 47, thank an entrepreneur. Because of inventions and good marketing, fresh food from all parts of the world is in supermarkets at affordable prices. Profits from making insulin gave researchers the means to improve treatments that have extended the lives of diabetics. Polio, smallpox, and tuberculosis have been almost completely eradicated in many countries in the last century. Willis Carrier took the risks to develop air-conditioning; Chester Carlson persevered to make copy machines. Steve Jobs is the gift that keeps on giving. These men make it easier for us to fulfill the dreams our fathers had for us. Community organizers, by contrast, live by taking tax dollars from others to redistribute to themselves and those in their community. Such activity shifts jobs from the creators of wealth to those want other people's cash.Want another difference between politicians and entrepreneurs? How many politicians have gone a year without pay? Let me take an educated guess: zero. How many small business owners have? Twenty-three percent.
Third, careers in business almost always require integrity to succeed. If people can't trust entrepreneurs, they won't buy what businessmen are selling. In politics, by contrast, politicians can promise goodies to many, and then try to tax the few in order to deliver those goodies. The politician can win votes by gifts to voters that suck capital from the entrepreneurs and household money from the middle class. The politician wins, but society often loses.
[A] new survey by Citigroup shows that 23% of small business owners have gone more than a year without pay. The study also says that 54% of them have gone without at least one paycheck; 38% of them said their employees had worked overtime without being compensated; and 18% of them had been unable to make a paycheck for their employees at least once.Entrepreneurs do noble work that greatly benefits society as a whole, and many of them do it without any immediate payoff. They should be applauded and appreciated, not taxed into oblivion.
During recent years, 78% of the owners have taken less profit, 70% have been working more hours, and 69% have used their own funds in order to keep their businesses afloat.
Las Vegas Mob Wars: Government-funded Mob Museum strong arms privately funded Mob Attraction
The Mob is notorious for shakedowns, but in the battle between competing Mob exhibits in Las Vegas, it's the government strong-arming a private business and taxpayers.
As this video shows, the privately funded Mob Attraction must compete with the government-backed Mob Museum that's already received over $42 million in government handouts.
Just another reason that government shouldn't pick winners and losers in the economy.
Reid, McCain taking a swing at federal regulation of boxing
Guest post by Jared Carl, NPRI's Development Officer.
Last week, in the wake of the controversial Pacquiao-Bradley fight, Sen. Harry Reid vowed to revisit legislation to regulate boxing. Bradley won the fight according to two of the three judges, giving him the official decision, though nearly every spectator and commentator believed that Pacquiao had won. In the aftermath of the fight, the hashtag #RIPBoxing was trending on Twitter.
As the Las Vegas Sun reports:
Nevada Sen. Harry Reid told reporters on Tuesday he would revisit a long-standing boxing bill he's worked on in the past with Arizona Sen. John McCain. ...Last week, it wasn't exactly clear what the new legislation would look like.
The bill is a nearly decade-old venture spearheaded by McCain to regulate boxing much like other professional sports. It would require uniform health and safety standards, common ranking criteria, and a commissioner to head an envisioned United States Boxing Commission and set rules and standards.
Today, we found out:
"The most recent controversy surrounding the Pacquiao-Bradley fight is the latest example of the legitimate distrust boxing fans have for the integrity of the sport," McCain said. "After the Pacquiao-Bradley decision was announced, fans were clearly apoplectic and many commentators found the decision astonishing." ...But let's be clear. This is not an attempt to make boxing safer for fighters or more accessible to fans; it's an attempt to further expand the influence of an already pervasive federal government.
"The Professional Boxing Amendments Act would strengthen existing federal boxing law by improving the basic health and safety standards for professional boxers, establishing a centralized medical registry to be used by local commissions to protect boxers, reducing the arbitrary practices of sanctioning organizations, and enhancing the uniformity and basic standards for professional boxing contracts," McCain said. "Most importantly, this legislation would establish a Federal regulatory entity to oversee professional boxing and set basic uniform standards for certain aspects of the sport."
Consider, once more, McCain's description of the bill: It will improve health and safety standards, enhance uniformity in contracts, and - most importantly! - create a federal regulatory entity to oversee professional boxing.
Those things already exist, whether by the self-governance of fighters, the influence of trainers, the demands of promoters, the laws of the states in which the bouts take place or the rules of the worldwide organizations that sanction professional boxing.
And where they don't exist, reform is easily possible without the creation of a federal regulatory entity. Top Rank, the state of Nevada and the WBO each have various means by which genuine reform can be achieved.
No, this is not an attempt to make boxers safer or boxing as a sport more accessible; it's a misguided "solution" in the vein of much modern legislation. It derives from that dark place in so many federal policymakers that desires to do something when something bad - or perceived to be bad - happens.
It's not enough for Senators Reid and McCain to disagree with the judges' decision, sit back and let the already-in-place laws of the state of Nevada and the protocols of the WBO determine if any further action is required. Just like it's not enough for them, in economic affairs, to let the free market correct itself. Too many federal policymakers have an all-consuming need to do something.
The sports world has experienced this before, most recently when Major League Baseball players were called to testify before various Senate subcommittees on the use of steroids. There was public outcry, the feeling that something wasn't right and the opportunity for legislators to get themselves on national television.
But just because legislatures can act, doesn't mean they ought to.
Boxing's reputation, according to a spokesman for McCain, suffered "another black mark" after the Pacquiao-Bradley decision.
But black marks, like black eyes, heal. Boxing has always suffered from the possibility of fixed fights and poor decisions despite numerous state laws and regulations. Yet the sport endures. As Sen. Reid stated, "I judged fights. Championship fights. It's hard to do. It's an inexact science."
So in our quest to restore the public's tenuous trust in the turbulent yet resilient sport of boxing, let us consider what reforms are needed, and what governing bodies are best able to institute those reforms.
Does the sport require some reforms? Yes.
Should those reforms come from outside the sport - from politicians in Washington, D.C.? No.
Any reforms to the sport will be better if they happen organically, from within. Let fighters, trainers, promoters and sanctioning organizations sort out the details. Washington, D.C., has more important things to worry about than who wears the WBO welterweight belt.
'When are we going to understand that you don't solve a debt crisis with more debt?'
You think this would be obvious to everyone, but unfortunately, it's a foreign concept to many liberals.
And since it's hard to comprehend the long-term impacts of government debt, here's a look at what's happened to Greece's state hospitals as the government has run out of money.
Greece's rundown state hospitals are cutting off vital drugs, limiting non-urgent operations and rationing even basic medical materials for exhausted doctors as a combination of economic crisis and political stalemate strangle health funding. ...If you think that can't happen in America, remember all the people in 2006 who thought the real estate bubble would never pop and how wrong they were.
"It's a matter of life and death for us," said Persefoni Mitta , head of the Cancer Patients' Association, recounting the dozens of calls she gets a day from Greeks needing pricey, hard-to-find cancer drugs.
"Why are they depriving us of life?" ...
A doctor at the university hospital in the northwestern Athens suburb of Chaidari cites a lack of basic examining room supplies in her own department, such as cotton wool, catheters, gloves and paper used to cover the examining table.
The shortage of paper, which is thrown out after each patient has used it, means corners have to be cut on hygiene.
"Sometimes we take a bed sheet instead and use it for several patients," said Kiki Kiale , a radiologist specializing in cancer screening. "It's tragic but there's no other solution."
One way or another everyone and every country has to pay its debts. It's much better to pay them off before the hospitals run out of drugs and have to start reusing bed sheets though.
(h/t to The Libertarian Popinjay)
Union bosses: Modified Business Tax hurts the economy
Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them. Just enter your email in the box on the top right.
For today's week-in-review email, Andy writes a great column noting that even union bosses are now admitting that the Modified Business Tax hurts the economy.
There are few things sweeter in life than being told, "You're right." But when those words come, even indirectly, from the most unlikely of sources, it's even better.
For years, we at the Nevada Policy Research Institute have noted that Nevada's modified business tax (MBT), which is a payroll tax, hinders economic growth, because it is a disincentive to hire employees. The Legislature's decision to raise taxes by doubling the MBT during the 2009 and 2011 sessions is one significant factor in Nevada's current 11.6 percent unemployment rate.
You know this. Many elected officials know this. But you know who else acknowledges that the MBT hurts the economy?
Lynn Warne, president of the Nevada State Education Association, and Danny Thompson, executive secretary treasurer of Nevada's AFL-CIO.
Yes, the heads of two of the most liberal organizations in the state. Don't believe me? In their own words, here is what they said recently about the modified business tax.
As reported by the Las Vegas Sun, Warne said she thinks the MBT "hurts businesses' ability to hire."
Last week on The Agenda television program (at the 3:56 mark), Thompson made this statement.
The modified business tax was a poorly written tax. It's probably the most regressive thing that we have that stifles economic development. ... You pay taxes based on an employee, so there's a disincentive to hire employees, because then I have to pay a tax. Whether or not I make money, it doesn't enter into the equation.These union bosses are echoing NPRI talking points.
Now, our stance hasn't always been popular with the big-government crowd, but that doesn't change the fact that NPRI's position on this issue was and is right. We spoke the truth, stood firm and, a few years later, even some of the staunchest liberals in the state have agreed with our position.
This is a powerful vindication, not just for NPRI, but also for you and our thousands of supporters throughout the state. Our shared principles of individual liberty, free enterprise and limited, accountable government have, once again, emerged victorious in the battle of ideas.
So I hope you're encouraged - but not passive. While Warne and Thompson have acknowledged the destructive impacts of the MBT, they want to replace it with a tax that's much larger and even worse - the margins tax.
NPRI has done extensive work on the many problems with the margins tax, and we'll be releasing even more in the next couple of weeks.
So when some members of the elite media, special-interest lobbyists or even just your liberal friends try to berate you into supporting the destructive and distortive margins tax, remember how our principles and analysis have been justified.
If we stand our ground and give them a few years, even liberals will recognize that we're right on this issue, too.
Thanks for reading, and I'll see you next time.
Andy Matthews
NPRI President
Remember, if you'd like to receive the latest from NPRI, sign-up for our emails here. Enter your email address in the box on the top right.
