Taxing Business Will Not Solve Our Health Care Crisis

John ArmstrongPolitics

Universal government health care has become a major issue in the United States. At least one Democratic candidate for president, John Edwards, is running on the issue big-time. Another, Hillary Clinton, has a mixed-record and is still trying to find her way forward on what she thinks the public will buy into, or so it seems based upon what the media tells us about her campaign. In the end, we are not really quite sure yet where Obama and Clinton actually stand on this issue but I expect them to put forward some version of the so-called “moral imperative” talk in due time. Even some Republicans have begun to talk this way as well.

Every candidate, both Democrat and Republican, ought to pay real attention to what happened in my state recently. When Illinois Governor Rod Blagojevich tried to get a state health-care bill through our legislature, by taxing business profits, he lost his legislative proposal by a vote of 107-0.

The governor, fresh from several large tax increases in his first four years in office, was re-elected in November of 2006 by a rather large margin. (He faced a very weak candidate.) He then used every known trick in the political play book to convince the state, and our legislators, that we could finance a huge tax-increase and give health-care to everyone in Illinois. Instead of raising individual taxes, which would have had no chance at all, he targeted businesses. He even suggested that small businesses, of less than $5 million in revenues, would be exempt from this tax. But his bill still went down in flames. The morning I read the Chicago Tribune’s stark headline: “107-0” was the same day I said, “Praise the Lord.” And I was at my breakfast table reading something other than my Bible.

The problem was simple really. Our governor wanted to force employers to carry the heavy burden of this new tax. Everyone from Mayor Daly, who has been quite an effective mayor in so many ways, to the Speaker of the Illinois House, openly opposed the governor. These politicians, from his own party, understood what was going on and told him he would drive business out of our state. The governor would not listen and pressed on with his appeal. What he wanted was a “gross receipts tax.” This is a popular tax with many progressive legislators who like to get at every dollar that a company makes. The tax would hit hardest those businesses that make a small margin of profit, thus it was seen for what it was, a huge revenue-raising plan that would kill jobs in the state. In seeking to pass this bill the governor called every major CEO in Illinois a “fat cat” to which Mayor Daly rightly reacted with strong words that were pro-business.

I am personally weary of being told that universal health-care, provided through excessive taxation and government management, is a viable solution to a very real and pressing problem. We do have a problem. We can fix it. This is not the issue. What wearies me even more is when this whole tax and manage approach is pitched as a “moral solution.” One begins to wonder what the word “moral” really means anymore when people use the word in this manner. I will say again, we do need real solutions to our health-care crisis but none could be worse for America in the long run than the one just soundly defeated in Illinois. The issue here clearly exceeded partisan politics. The bill was so bad that everyone agreed to stop it in its tracks. In a state that is controlled by the Democrats politically, with a governor who won re-election easily, one of his major pet projects plainly went down in flames. One hopes that many others are watching Illinois and paying careful attention to what happened. Such tax increases will do far more harm than good for people who want to invest in jobs and the future.

I doubt most lawmakers have learned this lesson yet since most of them seek to retain their office by satisfying people with more governmental solutions to real human problems. Only when the people say “Enough is enough,” will this stop. This is what makes our system of government so desirable. We the people can still make these changes if we find the will to work for them. Politics does involve compromise and a compromise solution can be found for the health crisis in America. But heavily taxing business profits and driving business out of your state is not a solution. Thankfully our representatives got the message. And it was the people who delivered it.

That’s a very good reminder of why our form of government is still worth celebrating this Memorial Day.