TaxCare

MDs work on taxes and CPAs work on healthcare.  It must be true.  Chief Justice Roberts says so.

The Chief Justice wrote, in the opinion that supported the ObamaCare legislation, that:

"That Clause [the commerce clause] authorizes Congress to regulate interstate commerce, not to order individuals to engage it. In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance. Such legislation is within Congress's power to tax."

Never mind that no one is writing or voting for this legislation thought they were drafting a part of the tax code.  Apparently the intent of the drafters was of zero consequence to the Chief Justice.

Now, those with the income to choose can either pay a tax penalty or purchase a healthcare plan.  It’s an ‘either – or’ tax: either buy (or do) what we want or pay a penalty.  Well, I must admit that that is brilliant: we know that the government has used taxes to alter (or try to alter) behavior: raise taxes on cigarettes to try and force people to smoke less, for example.   There are those who object to such actions, but the Supreme Court has now signaled that that is legitimate legislation: Congress is free to pass legislation to use penalties (now called taxes) to force behavior on those who can’t afford the penalty.

Where does this lead?  Well, first, it means the government can force the citizenry to buy things the government feels we should be buying: “Buy a Chevy Volt or pay a tax.”  But, more to the point, it can, through ever-higher taxes, simply force certain behavior on “those who have a certain amount of income” by slowly ratcheting up the “tax” on non-compliance.  “Buy a Chevy Volt or pay a tax” eventually becomes “Buy a Chevy Volt or pay a $100,000 tax.”

Secondly, beginning in 2015 (one year into the full enactment of the law) the “tax” penalty will start to climb, forcing more and more businesses to buy the healthcare insurance.  What will follow?  The insurance costs will increase, as will healthcare costs, as more and more government mandated funds become available for the healthcare industry, with rapidly decreasing market forces to keep costs in check.  (Don’t think so?  Look what happened to medical costs since Medicare, or education costs since the creation of the Department of Education.)  True private healthcare will be a thing of the past by the mid 2020s, and healthcare costs will soar, as there will be no reason to hold costs in check.  (Eventually, this will cause a reflex response by the same government, resulting in the very close, very real rationing of healthcare by the same accountants and bureaucrats.)

Third, the government, in the form of the bureaucracies that make up the executive branch, is now free to use the “power to tax” to force virtually any form of behavior modification on anyone, all in the name of taxation.  Want those pesky citizens to do something?  Easy, “tax” them for non-compliance.  Solar panels on houses or pay a penalty, drink fewer sodas or pay a penalty, get your body mass index below a certain number of pay a penalty, have fewer than four children or pay a penalty.  Hey, come-on, it’s just a tax and that’s ok, Chief Justice Roberts said so.

Truly, the power to tax is the power to destroy.

I’m headed to my accountant for my back pain.

Immigration Reform

I had an interesting e-mail exchange with a friend the other day, the gist of it being that the people we know who are of Mexican descent are overwhelmingly ferociously American.  They love their country, and they, like the millions of other immigrants of various origins – Ireland, England, Germany, China, Japan, Korea, West Africa, North Africa, Italy, the Middle East, India, Spain, the Philippines, etc. – are committed and loyal and hardworking Americans.

Overwhelmingly, they arrived in the US legally.  At the same time, they all have relatives or friends, equally hard-working, equally committed and loyal to the US, who did Not arrive here legally.  Many have been here for decades, but are nonetheless here illegally.

And so it leads to this ‘simple’ question: what is the appropriate solution?

Should we grant amnesty?  Or should we force out all who are here illegally?  The US is, after all, a nation of laws, not men.  And it must remain so.  Is that the final answer?  Is there no gray area?  Should there be no gray area, no possible compromise?  Is the letter of the law the final answer?  Or is there another piece to the puzzle?  Should compassion play a role?  And should US interests play a role?  And if there is some gray area, how can we deal fairly with those who are following the law in trying to become US citizens?

The President has recently weighed in with a plan that will allow an estimated 800,000 folks here illegally, to remain in the US if they continue their education, or serve in the military, have no criminal records, etc.  It is an interesting proposal.  But there are two things wrong with it.

The first is simply this: It’s against the law.  Senator Rubio, the junior senator from Florida, suggested just such a proposal a short while ago and it did not successfully make its way to law.  His proposal would change the law and allow those here illegally, if they satisfy certain criteria, to remain in the US, and to apply for citizenship.  Current US law does not allow that.  Hence, the law needs to be changed, if this it to be the manner in which the US handles certain illegal aliens.

President Obama, apparently not being terribly concerned with the niceties of the Constitution in which the Legislature enacts laws – and changes them, has decided to change the law himself.  That is interesting behavior for a Constitutional Law professor.  But, that is what he has done.

The second problem with this new course of action is simply this: there is no cost to those who have broken the law.  In effect, people are being rewarded for illegal behavior.  Am I looking for Draconian responses?  Certainly not.  But there is merit to the notion that, as Thomas Paine put it: “That which we obtain too cheaply we esteem to lightly.”  In short, there ought to be some penalty.  That penalty can be (and should be) simply monetary – a one time fee.  But it is necessary that a philosophical point be made: you must pay for breaking the law.

All this, of course, doesn’t answer what we should do about illegal immigration.  My own response to this all is, I think, horribly selfish.  By that I mean, I think the answer should involve at its core the idea of doing what is best for the United States and if others don’t like it, well – too bad.

The important question then is simply this: what is best for the US?  I would suggest that isn’t, despite all the noise on the news, really that difficult a thing to determine.  First, obviously, this is about those people, from whatever country, who are in the US illegally.  If they have a Green Card, if they have asked for sanctuary, if they are working through the process for citizenry, then this concept doesn’t concern them directly – except that in the latter case we do need to resolve the issue of fair treatment.  But the central issue is that of people who are in the US illegally.  And the US response should be to address US interests first.  And what are US interests?

I would answer that in this regard the nation’s interests are: Security, the Economy, and the Integrity of the nation.  As far as security goes, the US should be concerned that it can control its borders and its territory.  Procedures should be put in place to prevent people from illegally entering this country and from illegally living in and operating from this country.  We can debate what those might be, but we need to start with the simple concept that a nation needs to control its borders; there needs to be real control.  Secondly, security should involve ensuring that the nation is safe and in this case that means that those who are in the US illegally AND are engaging in criminal activity or activity that damages the US, US interests or the US economy should be either incarcerated (if they have committed a capital offense and are convicted of it), or quickly kicked out of the country, and are ineligible for return.

Economy: simply put, those who are contributing to our economy should be considered separately from those who do not. If you are employed, but here illegally, you might be required to immediately begin work on citizenship, and then pay a penalty, in the form of a sliding scale affixed to their income tax for a period of perhaps 3 years: the more they earn and the longer they have been here, the more they pay.  It doesn’t need to be an onerous, confiscatory tax, just one that recoups some government cost, perhaps a 5% to 15% increase on their taxes.  Those who are in the US illegally, are 18 years old or older, are unemployed, and are ineligible for a student visa, would be sent home.  If they are eligible for a student visa, they can apply for one, and they will be taxed – a penalty.  Pay the penalty (again, within a given timeframe) and qualify for the visa and they stay.  Otherwise, they leave.  As for military service as an avenue for citizenship, that actually has been on the books for quite a while.  Expanding it to allow someone who is in the US illegally to join up, assuming he meets all other requirements – and is willing to swear loyalty to the US – is really not that new a concept.

There is an objection to this position, that being that the illegal immigrants are taking jobs away from US citizens.  This “solution” really is reduced to two issues: penalizing the worker (the illegal immigrant), as discussed above, and penalizing the employer.  If the employer knowingly hired an illegal worker, simply stripping him of his worker(s) may satisfy some thirst for retribution, but hardly serves our combined interests for a healthy economy in the form of productive and profitable businesses.  Again, I think the best answer (and I recognize it is not perfect and will upset others), is to penalize the employer – a set fee per worker is probably the best answer, and then ensure that standard workplace rules are being followed: taxes, insurance, etc., etc.  The penalty would need to be large enough to be at least to some degree ‘painful,’ but it shouldn’t actually cause a drop in productivity – we are trying to grow the economy, not kill it with the death of a thousand cuts.  (Of course, once identified everyone needs to follow the law, as well as apply for US citizenship.)  Accordingly, the employer penalty needs to be carefully chosen, but again, should not be onerous.  (One that resulted in the employer firing some workers therefore is clearly counter-productive.)

How would we construct such a process without seeming to benefit the illegal immigrant at the expense of the unemployed citizen?  That is more difficult.  Penalties may have been paid, but we are still left with US citizens without employment.  The unpleasant truth however, is that there are no meaningful statistics that show that long-term unemployment rolls are materially affected by immigration – legal or illegal.  A healthy US economy would generate in excess of 2.5 million new jobs every year.  That is has not is a failure of the administration’s economic policies, not a result of immigration, or immigration policies.  Lashing the two together makes for good headlines, but fails to accurately address the real economic issues that are causing the unemployment and under-employment problem in the US.

Returning to the issue of immigration, I would add that for those immigrants who have something extra to offer: a patent of some value; an MD or some other list of desirable professionals, you should move up the list for entry and citizenship.  Is that, strictly speaking, fair?  Probably not.  Then again, I’m not trying to be fair.  I want to look out for US interests.  If you are smart or rich or talented I think it should be easier for you to become a citizen then your poor, dumb, untalented brother.  Look on it as picking a team: I think we should pick the best team we can.

For children who are in the US illegally without their parents or guardians, they must be returned to their parents if the parents can be found, or they become wards of the state.

Finally, there is the issue of the Integrity of the nation.  Simply put, we shouldn’t allow anyone into the US who doesn’t like us.  There should be several simple requirements for all illegal immigrants who otherwise qualify (see above) to stay: a strong and visible desire to become US citizens, an effort to learn English, a willingness to surrender any loyalties to any other nation.  This one is an issue: there are any number of countries with which the US currently allows US citizens to have dual citizenship.  There are also legal grounds for dual citizenship.  For example, a child of US citizens born overseas (while serving in the military for example) may well be a citizen of that country while also being a US citizen.  As a matter of policy US citizens should be required to surrender citizenship of another country when they reach their majority.  New adult citizens should likewise have to surrender their previous citizenship upon acceptance of US citizenship. Simply put, you are no longer an “Irishman,” or an “Irish-American,” you are an American.

Is all this fair to those who have applied for citizenship and followed the rules?  I would submit that the key is this: find a penalty that seems fair and use it.  If you are hard-working, want to be here, aren’t breaking the law, and are willing to commit to being an American – I want you here.  If you broke the law in getting here, but haven’t otherwise broken the law, then the simple answer is: pay the penalty and let’s get you the test and let’s make you a citizen.  If the above doesn’t pertain: if you aren’t hard-working, if you don’t want to be here but simply want to exploit the system, if you have been breaking the law, if you don’t really, really want to be an American – I don’t want you here.  Out you go.

Marriage

There has been a good deal of discussion about gay marriage in the news over the last few weeks, but two things seem to have omitted from the conversation.  The first is: a serious discussion on what is a marriage?  And the second, following from the first, is: given what marriage is, who, that is, which governmental body, decides who can and who cannot engage in such an act?

As one might suspect, there has been a good deal of posturing and opining by figures on all sides of the argument about marriage and, in particular, the rights of people to marry.  This misses the mark.  In fact, the question of marriage can be reduced to this: is marriage a right or is marriage a legal agreement – specifically, a contract?  If it is a right, that would suggest that marriage exists apart from government, that it is provided to us by God, or if you prefer, by nature.  But, it difficult to argue that it is a right when we consider that a marriage, under any circumstances, requires a whole host of things to be valid: both parties need to be adults, both parties need to be competent (the insane can’t get married), both parties have to be unencumbered – that is, free to enter into the marriage, and in some jurisdictions both parties have to be free of certain diseases. 

There is little reason to believe that anyone would suggest that any activity so circumscribed could be labeled a ‘right.’  The Bible, on the other hand, strongly suggests that marriage is a contract – the word covenant is used repeatedly in reference to marriage, and while in those cases a covenant is an agreement, a contract, between man and God, it is nonetheless a contract.  But the media insists that denying the gay community the “right to marry” is a violation of their civil rights.  Simply put, if marriage is a right, then government has only a very narrow ability to control my marrying.  But, of course, governments – all governments – have throughout history exercised a wide range of controls on marriage.  Further, it is difficult to imagine a ‘right’ that requires both the exercising of the right and the consent of two people.

It would seem, in fact, that to define marriage of any type as a ‘right’ is simply false.  But, it would be necessary to do so – define marriage as a right rather than a contract – if you wish to label denial of marriage to the gay community as a violation of civil rights.

On the other hand, if marriage is a contract, not a right, we need ask who has jurisdiction in the law?  Strictly speaking, commercial contracts and marriage contracts are not the same thing, but it may help in clarifying the problem if we begin with commercial contracts.

In the United States there is a federal code that addresses the bulk of all contracts: the Uniform Commercial Code (UCC).  It was drafted to bring commonality to the commercial codes across the various states and territories of the US.  Each state is free to adopt sections of the UCC, as well as to amend elements of it as they see fit.  This is what state legislatures do: they write and amend law. 

It is true that the marriage contract has always – for 6000 years – been viewed in a different manner than any other contract.  But it is a contract, just a unique form of a contract.  Thus, there are the various restrictions on valid marriages listed above (which is by no means a definitive and all-inclusive list).  Using similar procedures and concepts as with commercial contracts, states have drafted those laws that have defined who can enter into marriage and under what circumstances.

The basis for US contract law (at the Federal and state level), as with entire UCC (and much of the rest of US law) is English Common Law.  But legislatures have gone well beyond English Common Law and continue to define and refine the law in accordance with events of the day and the desires of the electorate.  And so, we have more than 50 different jurisdictions in the US (the 50 states plus Puerto Rico, Guam, American Samoa, Washington, DC, etc.) and each one has the opportunity to define various contractual relationships as they see fit.  Marriage is one of them.  It is worth noting, of course, that more than 30 states have passed legislation that defines marriage strictly in terms of it being ‘between a man and a woman.’  Among these is, of course, California, where 58% of the electorate voted for such a definition only to have several judges overturn their vote.  (That the President seemed and seems unconcerned by such an act, even though he recently professed some angst over the idea of the Supreme Court overturning an act by Congress is confusing, but doesn’t seem to trouble him.)  That the voters continue to vote in support of the traditional definition of marriage, while the President and the main-stream media (and their polling cohorts) continue to insist that the nation supports a different definition of marriage is to be accepted as one of the realities of politics.  But it is politics.

What is significant is that this is the appropriate action.  If the citizenry are concerned about a particular facet of the law, it is perfectly within their powers - as the source of all power in government derives from the people – to hold a referendum to define that facet as they see fit.  31 States have now done so.  What is not appropriate is that judges, in the face of a clear mandate from the general populace in the form of a referendum, seek to define something as a right which is clearly a contract.

The significance of the voters’ decisions is that democracy has produced a result that does not fit with the story of the President or the media.  The President can lobby for change, and the media can follow his lead.  But what the voters should insist, and this is arguably more important than any argument about the definitions of marriage, is that the President respect the vote of the people – the real government – and not seek to undermine it by calling for judicial activism when it suits his political agenda.