
Obama Tax Plan a Frontal Assault on Entrepreneurs - SarahToton
http://pajamasmedia.com/blog/obama-tax-plan-a-frontal-assault-on-entrepreneurs/
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mkn
I tried in vain to find a valid argument in this article. Instead, it was
nearly wall-to-wall non sequiturs and faulty generalizations.

There's some arm waving about how increasing the income tax on high wage
earners will act as a disincentive to angel investors. Am I misunderstanding
tax law, or aren't capital gains (e.g., from startup investments) separate
from income for tax purposes?

Then, when Obama's "socialized medicine" plan would actually help, the author
rails against it because it has 'failed everywhere it's been tried.' (Except
where it has succeeded. And also, the dismal failures mentioned are anecdotal
scaremongering.) _The solution is held out in front of the author and he
rejects it on unrelated, partisan grounds!_

Maybe he makes sense to himself, but his oversimplifications haven't
adequately made the case for the article title or his two supporting gripes.

~~~
petercooper
When he says Obama's plan is "putting the cart before the horse" I think he
means that it's silly to tax us on the money we earn that we'll eventually
invest with and not on the money we invest ONCE we're rich.

I'm not rich, but let's assume I'm on track to become so by way of my ever
increasing income. Obama would take more of the income I'm using to build my
fortune, leaving me less to invest later on. Lower income taxes would give me
more to play with later on, and since I'll already be quite well off by then,
paying tax on my capital gains doesn't really bother me.

Personally I don't think this is a great argument and I am in support of
Obama's plan, but I do see its point. It's a very long-term argument, and I
think that if far smaller investors can use the capital gains 0% tax (such as
entrepreneurs who self-fund) then it's an amazing idea. But if small self-
funding entrepreneurs _cannot_ take advantage of the 0% tax on capital gains
in their own businesses, I'd probably agree with the author as it serves only
to unfairly placate the rich.

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thinkcomp
This is simply ridiculous. The author clearly hasn't filled out IRS Form 1120S
lately, or any other tax form that actually might be applicable to
entrepreneurs. Furthermore, I don't really care if angel investors and venture
capitalists have to pay more taxes on their successful investments. There's a
difference between investing and inventing.

In regard to health care, adding more tax incentives (read loopholes), thereby
increasing the complexity of the laws, and making the market for health
insurance "more competitive," when the lack of competition is not the problem
in the first place, will make matters far worse. Health care is not a
commodity that lends itself to a market. It's a human right, which lends
itself far better to [competent] government.

A while back I wrote about some of these issues here:

<http://www.aarongreenspan.com/essays/index.html?id=11>

~~~
jobeirne
Health care is not a human right. It is not my obligation to make sure that
you survive.

~~~
maxklein
Humans are successful because we don't leave our dead, sick, wounded or
crippled behind. We won because, instead of doing like other animals and
letting the weak or old die alone, we continue to help them and learn from
them.

We help other humans who are too weak to be helped. It's part of our primal
human nature. When you say that it's not your obligation to make sure I
survive, you are saying you want to try it the animal way. The way that
failed.

~~~
DanielBMarkham
Rights are those things that are inherent parts of being a human. When
something infringes on my rights, the power of the state is used to maintain
them. We have rights to represent the minimal amount of state-sanctioned force
that is required to keep us all civil.

You cannot have a right to goods and services that somebody else currently
owns. Using the power of the state to acquire medical goods and services is
not a basic necessity of being a human.

We've lived millions of years without the state caring for our daily health.
We can live millions more without the state and we'll be just be fine.

For a constitutionally-trained lawyer to say that is to engage in demagoguery
over substance. We have a problem with health care -- some free market
principles do not work when you are dying. But cartoon solutions and slogans
are not going to fix complex problems. Mark my words: we'll just end up more
in debt, more frustrated, and more vulnerable to even more bullshit promises.

~~~
maxklein
If I were to have an accident or to fall sick right now, I'd worry about my
health, and nothing more, because I live in a country with socialized
healthcare. If this were to happen in the U.S, I'd have tens of thousands of
dollars of debt. To work my way out of this debt would make me a slave for
years.

Support for social heathcare is to recongize that one day you may be in the
same position. In fact, when you are a really old man, you WILL be in that
position. You'll be on a pension and you'll have lots of illnesses. I pay 8%
of my income so that this never has to be a worry.

Social healthcare may not be a fundamental human right, but it's a hell of a
convenient thing!

------
tptacek
The person who wrote this article has never tried to obtain independent health
insurance.

For a family of 4, private health insurance with a typical deductable costs
something like $1200 _per month_. That's half a reasonable mortgage, or 3
times the monthly cost of two parents each commuting 50 miles a day on $4 gas,
or 3 concurrent car lease payments. Over 60% of Americans today are covered by
their employers, who in addition to accessing lower-rate group plans, cover
some or all of this expense.

But that's not the biggest problem. The biggest problem is that out of the
163,000,000 people that would need to switch to private health insurance in
these schemes, a huge portion of them will be unable to access a competitive
plan. Private health insurers can and do decline coverage for a myriad of
reasons. My daughter had a (drug reaction) seizure when she was 3. NO
COVERAGE. A friend's wife had a minor women's health issue. NO COVERAGE.

Advocates for private health insurance are quick to point out that they'll
work with states to set up "last-resort" health insurance coverage for these
people. Those advocates don't understand what the word "competition" means.
Those "last-resort" plans already exist (at least in Illinois, Michigan, and
California), but they're far more expensive than Blue Cross or United.
Insurance works efficiently by creating pools of shared risk. What happens to
the plans that get all the "risky" people?

With a couple obvious exceptions, my sense is that no country loves its health
insurance system. Canadians bitch about theirs, British people bitch about
theirs. But our system is an international joke. We pay more than everyone
else, we shift the burden of those payments to the _least convenient_ places
in our economy, the average patient receives poorer care, and we still manage
to bankrupt people with the system at random intervals.

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einarvollset
Anyone truly believe that the change from "less taxes for people making <
$250K (read: entrepreneurs)" and "if you create value we won't tax you on
that" (read: successful entrepreneurs) is going to _dissuade_ anyone from
trying?

This is the same "as long as you make the rich richer they'll spill some on
everybody else" thinking that, frankly, has no actual merit in fact (Before
you downmod me on this, lookup the some actual data!)

This guy should read a biography on Henry Ford.

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Dilpil
Even if the article is accurate, the alternative is McCain.

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icey
On one hand, this seems like it's linkbait to a poorly researched article. On
the other hand... see hand number one.

~~~
davidw
And it's also very much politics, something that doesn't belong here. To
properly discuss the candidates, parties, and whatnot, you can't stop at their
economic policies that _might_ affect people here, but have to consider
foreign relations, civil liberties, and a slew of other things that would just
bog this site down. Back to hacking.

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uuilly
I was wondering about this. When I first heard his tax plan I didn't think
much one way or another. Then I thought, wait! I'm trying to raise money from
the super rich!

~~~
ardit33
Usual republican fearmongering. as Marc Cuban said "No self respected
businessman/ entrepenour wakes up a day and says I am not going to build a
business and try to make millions b/c my marginal tax rate is %35 instead of
%25".

If that extra money taxed gets used for something useful such as building High
Speed Rail in California, or jump-starting alternative fuels technology, then
it is a win win situation for the economy and for people.

If that extra tax money gets spend in useless wars such as the one in Iraq,
that is plain economic destruction.

That's why picking the right president is so important, and makes the huge
difference between economic prosperity, or economic destruction.

While I may say, that Bush's tax cut, and flood of money (with low interest
rates), left the rich flush with money, who invested in short-sighted and
useless economic destructive market. For every house that is in foreclosure,
every house/street/building that is left half build, that is all economic loss
to all.

While it is a good idea to let markets decide private investments in the long
run, sometimes it is necessary for the government to step in, and invest in
things that are not profitable in the short term, but have huge positive
economic impact in the long run. And if pinching some money away from the
private market is necessary, so be it.

~~~
anamax
> for something useful such as building High Speed Rail in California

According to
[http://www.cahighspeedrail.ca.gov/images/chsr/20080121152955...](http://www.cahighspeedrail.ca.gov/images/chsr/20080121152955_Financial_Plan.pdf)
, the system can't pay back the bonds that are currently on the ballot, bonds
that cover less than half of the projected construction costs. Since such
projections almost always overestimate revenues and underestimate construction
costs, the real gap will be even larger.

Some of the tricks used to get the revenues up include high-rises in Fresno
and other central CA cities over the train station. That makes a lot of sense
in NYC where land is at a premium, but Fresno?

There's a reason why the ballot statement says that the operating costs
"[operating] costs would be at least partially offset by revenue from fares
paid by passengers" and doesn't mention interest and principle.

I can't find a breakdown for the operating costs on this version of the
project. The last time I saw such a breakdown, the projected salaries and
benefits of the folks running the trains exceeded the projected revenues....

If high-speed rail in CA made financial sense, why wouldn't a for-profit
enterprise be interested in doing it?

~~~
andreyf
_If high-speed rail in CA made financial sense, why wouldn't a for-profit
enterprise be interested in doing it?_

Because there are externalities which a private company can't benefit from,
but that people benefit from.

~~~
akbar5919
They benefit, but not enough to pay for it?

More importantly, what's the difference between "private company" and
"people?"

------
newt0311
Another point on the health care bit. At present, medicare and medicaid spend
a combined > $600 billion and rising at _6%_ annually. In their market
(medical insurance) they are the largest players. Absolutely. As a result,
other insurance companies structure their plans within those offered by these
two entities. They have to, if they want to offer supplementary services to
these large markets and have any influence with hospitals (hospitals and
doctors do not want to work with multiple completely different systems of
paperwork unless they have to).

If we want real innovation in the health care sector, the personal tax
deduction will help but ultimately, we need to get rid of these two bloated
freaks. Too bad that that is one sacred cow that no politician is going to
touch with a 9 foot stick.

~~~
notauser
If your $600bn figure is correct...

US incomplete health care is $600bn/305m people = $2,000 per person.

UK national health service is $120bn/60m people = $2,000 per person.

The US needs a really hard look at why it is getting such a bad deal. You
already have socialised medicine (anyone can go to the ER and it gets
amortised over private insurance patients - essentially taxing the rich) but
that cost is on top of the $2k/person you pay for an inferior national
program!

~~~
anamax
Actually, everyone in the US is covered, there are just different plans. The
gap is wrt insurance. The uninsured have "free" (read taxpayer supported)
options. (Yes, there are treatments that aren't covered in those options, just
as there are in every system, including those in "universal healthcare"
systems.)

Note that about half of the insured are insured through US govt programs.
Interestingly enough, the cost of those govt programs is about the same as the
cost of the private programs that cover the other half of the insured. And,
the results of those govt programs is not better.

If you're going to argue that the US govt can do better than the private
sector, you should explain why it doesn't. Same cost, same results. Why will
making it universal change any of that?

Better yet - work on the US govt programs and then open them up at cost. When
they're better and cheaper, folks will flee the private system. Until then,
why should we believe that they will be any better than they are?

~~~
tptacek
The uninsured do not have "free" options. The "taxpayer supported" mechanism
kicks in only after you've been bankrupted. There's a difference between
_uninsured_ and _broke_.

~~~
anamax
The key point remains that the US govt has a huge role in the current
healthcare system. The programs that it runs that have comparable scope to the
private programs do not produce better results or cost less.

Why should anyone believe that they'd do better if they covered everyone?

~~~
tptacek
That's not the key point of your argument at all. Your thesis is that everyone
is covered, under different programs. That's demonstrably, decisively false:
the "program" that covers the uninsured first denies them long-term
preventative coverage, then forces them into emergency rooms, and finally
drives them into bankruptcy. It is the most expensive, least efficient
mechanism for all parties involved.

The easiest way to come to the conclusion that the government would do better
is to recognize that the only way we could possibly do worse would be to let
people die in the emergency room instead of treating them.

Your argument appears merely to redefine the word "covered" to mean "screwed".

