Republican Leaders Foster Stagnation and Growing Inequality

Richard Ames & Douglas Ley

No wonder so many people are weary and frustrated and angry.

 

For decades, all economic growth in this country has funneled to people on the top rungs of the economic ladder. Since the 1970s, pre-tax income adjusted for inflation has been flat for most adults, but has risen 121 percent for the top 10 percent, 205 percent for the top 1 percent, and 636 percent for the top 0.001 percent.  US census data reveals that the gap in income between rich and poor has been widening at a greater rate in NH, where historically there has been relatively less inequality, than anywhere else in the nation. 

 

This extreme and growing imbalance is a festering wound, upsetting at the personal level and destabilizing at the state and national levels. Gutting Obamacare by stripping away healthcare coverage from more than 20 million Americans, as proposed by Trump, Ryan and McConnell and other Republican legislators in Washington, would deepen the frustration and outrage. So would any favorable action on pending federal budget proposals by these Republican leaders that combine tax cuts for the rich with essential service cuts for just about everyone else.

 

Rubbing salt in the festering wound of growing inequality has been our state government’s failure to effectively respond. Unfair taxation is near the top of the failure list. Although Article 5 of our NH Constitution calls for “proportional” taxation, the net effect of our unique NH collection of narrow-based taxes is decidedly dis-proportional, with the rich paying about two-thirds less per dollar of income than almost everyone else.

 

In this context of growing inequality and blatantly unfair taxation, NH’s Republican leaders have chosen repeatedly to use their legislative power to cut our business taxes, the only components of the NH tax system that tend to fairly apportion the tax burden to high wealth, high income taxpayers. When fully realized in 2022, the business tax cuts pushed through by the Republican majority will reduce the state’s business tax revenues by about 22% (about a $200 million per year loss in state revenue in 2022, assuming normal inflation and growth rates). This will be a huge windfall for the international corporations, mostly based out-of-state, that are now responsible for about 60% of all state business tax revenue.

 

With new evidence in hand, one would think that those in this state who have pushed so hard for high-end tax cuts would be ready to abandon their “trickle down” fantasies. Consider this June 14, 2017 report by Business Insider: “Last week, the Republican-controlled Kansas legislature took the remarkable step of overriding the governor’s veto, finally repealing his signature tax cuts. Those tax cuts, which reduced personal income tax rates and imposed no tax at all on many kinds of business income, went into effect in 2013, and were touted by Brownback and other leading supply-side figures as the best way to boost growth, bring back jobs, and make Kansas richer. But now, almost five years into Brownback’s “real live experiment” in trickle-down economics, the evidence from the experiment is in. Brownback’s hypothesis about taxes and growth was decidedly not proved. And even Kansas Republicans have had enough.” Unfortunately, we have Republican leaders in NH who continue to mouth the tax-cuts-pay-for-themselves nonsense.

 

The sense of unfairness, of stagnation, felt by so many will only grow as our state government is forced, by the inevitable reality of shrinking state tax revenues, to continue to back away from its core responsibilities.  Driven by NH’s business tax cuts, local property tax rates will again be forced up, disproportionately hurting relatively poor communities. Teacher and other local public sector retirees, along with nursing home residents and their families, and public education students and their families will increasingly find their pensions, health care and education dependent on the good will of economically-struggling local property taxpayers. Students attending NH’s public colleges, a group that already carries the highest average student debt in the nation, will find that tuition is up as the value of the state’s support for postsecondary education continues to erode. Children in high-risk circumstances will suffer unnecessarily in the absence of sufficient state-funded voluntary protective services and pre-school care. Progress in developing needed mental health and drug-addiction services, a positive development in recent years, will be slowed or stopped.

 

We can do better than this – much better. We can work for real tax reform, while attending to revenue and equity concerns. Real bi-partisan healthcare reform is achievable, but only if empty partisan-driven slogans and agendas are set aside, And movement towards a living wage, supported from below by an economically meaningful minimum wage and enabled by strong collective bargaining protections and good education and training opportunities for all, would help a lot.

 

By: Dick Ames and Doug Ley, State Representatives for Cheshire 9 (Dublin, Harrisville, Jaffrey & Roxbury)

  

 

CONWAY DAILY SUN

JERRY KNIRK: THE NEW REPUBLICAN PLAN FOR OBAMACARE

7/17/2017

 

In previous columns, I have discussed general principles of what is needed in health-care reform. The new Republican plan just revealed in the Senate still does not address these issues. It introduces new compromises with fewer tax cuts for the rich but still penalizes low-income people. We are awaiting input of the Congressional Budget Office of the assessment of the bill’s impact on how many people will lose coverage.

 

The biggest impact will be on Medicaid, which is still slashed under this bill, cutting nearly $800 billion in the next 10 years. It will immediately terminate funds for expanded Medicaid and cap funding for the rest of Medicaid. The impact of this will be enormous. Medicaid covers about 20 percent of Americans. It covers 40 percent of all children and 50 percent of all births. Medicaid covers the nursing home bills for 60 percent of all Americans in nursing homes. Fifteen million people will lose Medicaid coverage.

 

It is particularly galling to cut Medicaid selectively. U.S. Sen. Ron Johnson (R-Wisconsin) has excused the attack on Medicaid because of the fact that Medicaid spending doubled from $200 billion to $400 billion from 2008 to 2015. He is actually referring to the federal contribution, and in reality, it has only risen to $344 billion. Excusing that minor error, one needs to look at this in the context of what has happened in the rest of the health care market. One of the biggest reasons that Medicaid costs went up is because enrollment went up with Medicaid expansion by 47 percent in that time period.

 

Because of the increased enrollment, it is disingenuous to look at only total costs. One must look at the cost per capita — how much money was expended on caring for each person. Between 2008 and 2015, Medicaid total expenditures rose 58 percent while private insurance expenditures rose 33 percent and Medicare rose 38 percent. In that same period, the number of Medicaid enrollees rose 47 percent and private insurance enrollees rose 0.7 percent. Calculating the percent rise in expenditures per enrollee reveals the true story. From 2008 to 2015, per capita Medicaid expenditures rose 8 percent, private insurance expenditures rose 33 percent and Medicare rose 13 percent. Medicaid was therefore the coverage program with the lowest rate of rise (inflation) per capita. Private insurance rose four times faster.

 

Not only was the rate of inflation in Medicaid spending less than that of private insurance, the actual per capita spending in Medicaid is lower than that of private insurers, adjusting for the increased health needs of Medicaid enrollees. If the Republicans were really concerned about the rate of rising health-care costs, why are they picking on the program with the lowest cost per enrollee and the lowest rate of inflation?

 

You may feel that if you are not on Medicaid, you will not be affected. This is not true. The first Senate version selectively increased the costs for low-income and the elderly by decreased subsidies and charging more for older persons. The new bill puts some money back for subsidies but does not change the increased rates for older people. We do not yet know how many people will not be able to afford coverage in the individual market and therefore lose coverage, but it is likely to be substantial.

 

The new U.S. Sen. Ted Cruz (R-Texas) amendment allows insurers who do provide an ACA-compliant policy to also offer cheaper policies with poorer coverage. This will further fragment the marketplace leaving older people, many of whom have chronic conditions, in their own pool with greatly increased costs. Though the cheaper policies will be appealing, healthier people who elect these policies will have unpleasant surprises when they become ill or have an accident and find that they have no coverage or poor coverage. Problems caused by substandard policies were the impetus for the ACA to specify a basic set of benefits in all policies.

 

People with no insurance or poor insurance still have accidents and illness which will be treated in the emergency room. The uncovered costs which are generated will not disappear but will be shifted to those who do have insurance or back into uncompensated care funds reimbursed by government (i.e. us).

 

The whole concept of insurance is to share risk. Slicing and dicing the policies violates that concept. One of the favorite things for conservatives to complain about is why they should pay for maternity coverage if they are not a young woman. It is interesting to note that, except in one instance documented in the Bible, a man is involved in every pregnancy. Indeed, every person’s existence is owed to a maternity event.

 

This bill does nothing to address the fundamental cost drivers of our health-care system, such as the fee-for-service system which encourages unnecessary treatment and over-testing, for-profit insurance companies, a fragmented system and out of control pharmaceutical costs. Real healthcare reform will require addressing these cost drivers and fundamentally reshaping the health-care delivery system. These are difficult problems but they are the problems that need to be addressed.

 

This bill is still not what the American people need or deserve in order to obtain good health care for all.

 

Jerry Knirk is a freshman representative from Carroll County District 3: Tamworth, Madison, Freedom and Albany. He lives in Freedom.

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