Does this healthcare bill usher in an era of misery and misfortune for America? That’s what one would believe listening to some of the opposition to the bill. More taxes on the wealthy will kill jobs. More federal spending will drag the economy underwater. Expansion of government will tip us over the cliff of socialism.

There is what I would call “directional validity” to those concerns. This healthcare bill does move us in the direction of more taxes, more federal spending and more government control over the financing of healthcare. What we must consider, though, is not just the direction of those changes, but their magnitude. Living here in Chicago, if I drive one mile west, I am heading in the direction of driving off the cliff into the Pacific Ocean — but taking magnitude into account, I need not be concerned.

One means to gauge whether the magnitude of the tax increase component is to put it into historical context. “For most of the last three decades, tax rates for the wealthy have been falling, while their pretax pay has been rising rapidly. Real incomes at the 99.99th percentile have jumped more than 300 percent since 1980. At the 99th percentile — about $300,000 today — real pay has roughly doubled.” By contrast, “since 1980, median real household income has risen less than 15%.” [See here.]

In other words, we already have been where we are going. And it wasn’t disasterous; in fact, it was prosperous. This act certainly is a form of wealth redistribution. So too is the status quo, a steady trickle in the opposite direction. The question isn’t whether this act redistributes wealth. The question is whether it does so to such a degree as to be dangerous to our economic and social stability. Seems to me that it will roll back the tide to where we were in, what, 2000? 1995? 1990? Those were boom times. We prospered then. Why should returning to that point of wealth equilibrium make prosperity impossible now?

Maybe this isn’t a plunge into the deepest ocean of socialism. Maybe it is a tweak.

Advertisements