The Simple Arithmetic of David Brooks' Deceitful Claims on Health Care Reform

If you make $1 million a year, the impact of the proposed health care surcharge is a blip, a rounding error. If you make less, the impact is disproportionately smaller. Only a tiny percentage of millionaires -- not those people whose net worth exceeds $1 million, only people whose annual earnings far exceed $1 million -- would ever pay a significant dollar amount for the tax surcharge associated with health care reform.

To obscure this obvious truth, David Brooks launched a series of deceptions on the Chris Matthews Show. First he tried to inflate the proposed marginal tax rate:

They got a House bill out, they've got a Senate bill moving forward. They're scaring the dickens out of the moderates in their own party, let alone the Republicans. They're scaring the dickens out of them because the House bill calls for raising the top tax rate to 52 or in some cities 57 percent. That's higher than in France, Spain, Italy...

Of course, the House bill does no such thing. Brooks lumped in the potential impact of state and local income taxes from places like New York City, but he made it sound as if the burden came only from the federal government. Matthews quickly corrected him. "You mean when you add up the state and local," he said. But Brooks made sure to interject all the standard Republican talking points:

When you add the -- this new tax surcharge they're going to put on everybody -- on the rich people's taxes. That is just placed terribly for small business people in the Midwest. And in both bills, House and Senate, there's no serious cost control. So they're making some progress, but they are -- they're proposing a bill, I think, that is way out of touch with where the American people are and their anxieties.

Here's how "this new tax surcharge they're going to put on everybody, " which is "placed terribly for small business people in the Midwest" and "way out of touch with where the American people are and their anxieties," actually works:

If you make $350,000 a year or less, you incur zero additional income taxes. If you make $500,000 a year, your tax bill goes up by $1,500, or about $4.11 a day. If you make $1 million a year, your tax bill increases by $9,000. If you think $9,000 is a big deal to someone who earns $1 million a year, you don't know anyone who makes that kind of money. Those are the people whose multimillion-dollar investment portfolios rise and fall by more than $10,000 on any given day. (One percent of $1 million is $10,000.) Those are the people who assured me how easy it was for Sarah Palin to spend $150,000 on a few outfits at Saks and Nordstrom's.

If you earn a lot more than $1 million a year, the dollar amounts begin to look meaningful. Here's the incremental impact along the taxable income food chain:

But again, this is the impact on individual tax returns. It's a standard Republican conceit to equate individual income taxes with the burden on small business, as if a million-dollar increase in Bill O'Reilly's taxes, or in the tax bill of a Goldman Sachs executive, will stifle small businesses in the Midwest. Brooks was amplifying the deceptions put forth in right-wing outlets like the Washington Times, which tried to deceive its readers into believing that the 5.4% rate of the surcharge, which only kicks in on your second million of annual income, applied across the board:

Small-business owners are warning that the economy would suffer under a health care bill proposed by House Democrats, which would drive tax rates for high-income taxpayers to levels not seen since before President Reagan's tax reform of 1986..."If they institute a 5 percent surtax on income, it will have a severe impact on small businesses that are already hurting," said Michael Fredrich, whose Wisconsin company, MCM Composites, molds plastic parts. "We run maybe three days a week, sometimes four days a week, sometimes zero days," he said. "I can tell you that at some point, people ... running a small business are just going to say, 'To hell with it.' "

Matthews played along, asking one of those rhetorical questions with a bogus premise:

So back to the question I raised with you 10 minutes ago: Would you rather be a member of Congress from a suburban district who voted for a big health care bill with a nice signing ceremony, but at the end of the game you're asked back home, "Why'd you raise my taxes to 57 percent?"

How many voters do you know who live in the suburbs and make well in excess of a million a year? Matthews, who makes more than $4 million a year, is out of touch with the real America.

Brooks continued his selective and misleading claims right until the end of the program, when he asserted:

Moderate Democrats, mild-mannered Democrats getting up at Democratic meetings in Capitol Hill and complaining about some of the specific provisions in the health care bill. For example, the taxes in the House bill would go up in 2011. It wouldn't actually take effect till 2013. 2012 you'd have taxes but no benefits. 2012 happens to be an election year. They hate that. That's the sort of thing they're hating in this bill.

As Change.org explained, the delay in implementation is most likely driven by a shortage of qualified medical care providers. Brooks' "taxes but no benefits" equation is deceitful because people who make in excess of $1 million a year don't worry about their medical costs.

No one on Matthews' program mentioned that House Bill 3200 was endorsed by the American Medical Association.

Note: The tax impact referenced above refers to families instead of individual filers, but the order of magnitude of the financial impact on singles is not materially different.

Comments

[raker]

"Deceitful claims" is how Republicans rebut every issue.

[Catmandu85219]

We all know the problems Obama had finding politicians to fill his cabinet because they don't pay their taxes. Is it only Democrats who don't pay taxes, or all rich people?
If they cannot get the $ out of the rich, they will come after the middle class.
It has to be paid by someone.

[Pablo175]

Even the Dems won't vote for the House Bill. It does nothing to control costs. It kills small businesses.

[urweatherman]

How about shortage of doctors? Rationing of services? Folks choosing other careers as would-be doctors have little incentive under this plan? The exhorbitant costs of the "model" plan in MA.....and on and on and on! Lets tackle those issues too while your at it. Doubt whether we can believe your assertions here!

[tck29]

Every one of the things you mention is a red herring and exactly what the repubs want you talking about.

[clarryr]

Are you saying there isn't already a shortage of doctors? That the insurance companies don't ration care? That the insurance companies try to minimize reimburesment to doctors, thus reducing incentives under their plan? The idea that the free market in health care due to demand for quality care at the lowest cost will maximize results is totally a myth. In reality the incentive of the free market is to maximize profits. To do that they must minimize expenses (reduce delivery of health care) while maximizing income (increase premiums). What you get is what we have now, ever increasing health insurance premiums for less and less care. There is a better way.

[Kerryman]

I'm no economist and I ain't the smartest guy in town, but before I went on Medicare I was paying $24,000.00 every year to Blue Shield for medical insurance (HMO, single, self-employed). Every year, Blue Shield raised my rates and lowered my coverage. Every year. So according to Brooks, this was a good thing? The man is nothing but a pimp with a nice haircut. I never read his column because I can't believe anything he says. To the New York Times: Fire his ass.

[drkazmd65]

Sign me up,... I'll be happy to chip in an extra $1500/year once I hit $500K/year in taxable income,...

My guess,.. I'll be waiting for quite some to come before I start feeling that particular pinch.

Why doesn't at least one,... ONE,... Interveiwer openly mock one of these pundits when they spew drivel like this?

[Raphi]

Because they're of the same elite economic class?

And, yes, sign me up as well.

[Billl]

Current reform proposals that will force individuals and businesses to pay for expensive services are worse than no reforms at all.

Removing businesses requirements for being financially or otherwise involved in any way with health care, and using government’s advantages for lowering costs, is the way to bring rapid “game changing” innovations and reforms to a new public/private system for serving individuals and businesses and saving taxpayers billions.

Private pay private care could be kept by everyone who likes what they have.

Nobody can collect the money to pay for health care as cheaply as the government can through a national sales tax, and nobody can deliver high quality care and medications, free to everyone who asks for them, without requiring insurance, or co pays as cost effectively as the government can through government owned and operated hospitals, serving as the public portion of a public/private reform system, and that system would save hundreds of billions annually from the current $2.5trillion spent last year.

All government mandated programs could be distributed through government hospitals at a fraction of the costs spent now by taxpayers to private systems.

Young, old, rich, poor, and everyone would be assured that they could receive quality health care and medications free at public hospitals and clinics whenever they need it period.

[Raphi]

Why are the implied assumptions of the economic elite never challenged?
1. They "deserve" their privileges. So owe nothing to the rest of the nation.
Do they have kids in the military? Have they never relied on the scientific, technological, or medical discoveries paid for by publicly funded research?
2. That corporate capitalism is the same as free enterprise.
No, it is not. Capitalist economics is about money, finance. While manufacturers, merchants, and labor, the demand side, simply don't count. Haven't we seen enough of that? Nor does the current system and its Republican enforcers care about small business. Ask those displaced by Wal-Mart. Or affected by the lack of consumer spending-- aka decent wages for working people. Nor can small businesses, and even most large ones, continue to fund health care coverage. What happens then?
3. That the various national health care systems of other countries don't work.
That's a flat out lie. Repeating it doesn't make it true.
4. That government bureaucrats will be making medical decisions.
Another lie. While insurance bureaucrats do exactly that. In order to to increase profit margins. By stalling, denying claims, because dead people are cheaper.

[BobLablah]

Why did you show the proposed rate tables for married couples instead of singles? That seems as misleading as Brooks.

[lcdbsez]

Mr. F.--

Good piece. May I suggest . . .

If the weepublican Party is the political arm of Big Biz . . .

And the never-decl­ared-but-a­lways-impl­ied goal of Big Biz is the same one preached from the pulpit on C Street in DC: the unrestrained accumulation of wealth (by the "chosen" already wealthy) at the expense of the poor . . .

Doesn't everything that the weepublicans do, make perfect sense -- ????

It's the jibberish, stupid! (no offense intended).

But the MSM plays along with the chickensh*t rhetorical games . . . time after time.

And the fascists over on C Street are counting on that.