The Real Scandal in the IRS "Scandal"

Campaign Finance Laws? What a Joke

I haven’t been writing many political posts lately. This is largely a reflection of my growing disdain for politics. But writing about politics for me is a bit like a drug addiction. Every now and then, I have to get my fix. So the upcoming rant, while trying to make some important points, is largely a means of releasing a few weeks’ worth of pent up annoyance.

President Obama has been bombarded by scandals lately. Of the big three that are dominating the news at the moment, I’m going to address the controversy surrounding the IRS disproportionately scrutinizing conservative organizations that were seeking tax exempt status, a "scandal" which clearly needs a catchy name: Exemptiongate? The War on 501c4s? IRS mess? I’ll work on it and get back to you.

Now I assume that everyone who is outraged by this affair knows what a 501c4 is. But in case you are a person outraged by this scandal merely because your pundits of choice have told you that you should be outraged, I will do my best (with my limited knowledge) to explain. A 501c4 is a non-profit, tax-exempt organization that is supposed to have the primary function of promoting “social welfare.” The problem is that many organizations seeking 501c4 status are actually political action groups seeking to spend lots of money on political campaigns. And unlike SuperPacs which, like a 501c4, can accept unlimited donation amounts from individuals, a 501c4 is not required to disclose any information at all about donors. Needless to say, this makes these so-called "social welfare" organizations attractive vehicles for raising enormous amounts of money to spend on campaign ads. Neither donors nor political operatives involved in these organizations need answer any embarrassing questions regarding whose particular interests they might be promoting.

So the IRS had the job of determining which of the hundreds of 501c4 applications that began flooding their offices after the 2010 Citizens United decision were actually organizations that planned to spend most of their money on "social welfare." And because they did not have the resources to handle this task, some people working there developed some criteria in order to determine which applications were worthy of extra investigation. Unfortunately, they developed criteria, such as certain terms popping up in organizations' names or mission statements, which targeted conservative groups more than liberals. It's possible that this occurred because officials at the IRS concluded that conservatives were more aggressive in creating 501c4 groups / phantom political action groups than liberals. It's also possible that this was an ideological attack intended to stick it to conservative organizations shortly before an election. Either way, it was a stupid approach to the situation that obviously opened the agency up to a scandal. It was so obvious, in fact, that you have to wonder if this was actually a conservative plot to make the IRS and the Obama administration look bad. I have no evidence to back up this statement, but since when has a lack of evidence stopped anyone from making political accusations.

In my mind, the real scandal here is not a relatively petty discussion about stupid criteria used to conduct investigations that did absolutely nothing to stop any "charitable organizations" from spending ungodly amounts of money in the last campaign. Instead, the actual scandal is our nation's so-called campaign finance laws. We have these various forms of political action groups, some of which can take unlimited amounts of money from individual donors without disclosing anything to the public. And while these organizations are not supposed to give this money directly to candidates or to coordinate advertising efforts with them, you have to be pretty naïve to think that there is some sort of a force field separating PAC money from the money that candidates individually raise.

So I can think of a couple of solutions to this IRS scandal that will make sure it does not happen again. One option is to get rid of any kind of campaign finance laws and let any individuals or organizations spend all of the money that they want without any restrictions. This will get rid of the fantasy that there are any actual limitations now and relieve the IRS of the burden of determining if some charitable organization is actually a political action group in disguise. Ohio may have to endure 24/7 political ads for the three months before any presidential election, but that's their problem.

A second plan, however, actually achieves a couple of things that will greatly reduce any possibility of IRS scandals, and it has the added benefit of giving both sides of the aisle something that they claim to want. First, we should simplify the tax code either with some form of a flat tax or a consumption tax. This way, we could greatly reduce the size, scope, and power of the IRS. Their capacity to misuse power in significant ways would be greatly reduced, and the federal government could spend tax dollars currently used to fund the IRS on activities more productive than pouring over complex tax returns. CPAs and tax lawyers will get pissed, but they have been milking the system long enough, so screw them.

And second, we can have publicly financed campaigns. Each major candidate gets a limited amount of air time, a chance to perform in a few debates, and a fixed amount of cash that they can spend traveling around giving a few speeches, kissing babies, and doing other pointless crap. Voters can also easily go to the candidates' web sites if they are actually interested in their positions on issues. Political advertising on television and through other major media outlets would be banned. It's not like any of that garbage provides any actual information anyway, and it would give television viewers one less reason to fast forward through commercials with their TIVOs. Who knows? Having more corporate advertising crap on the air rather than the political garbage may even stimulate a little economic growth.

Of course, I am far too cynical to believe that this second plan will ever happen. Politicians love to use the complex tax code to push their agendas and to pay back the donors who have been able to give so generously to their campaigns, a process made much easier in recent years by our essentially non-existent campaign finance restrictions. Why would politicians want to bite the hands that feed them? And why would incumbents want to give up the fund-raising advantage that they typically enjoy and that provides them with their job security?

So I guess that we can all just go back to arguing on and on about the "scandals" of the moment. Partisan cheerleaders seem to believe that playing some part in making the other side look bad will ensure that their set of bought-off politicians beats the other set of bought-off politicians. Partisan cheerleaders are essentially like sports fans anyway. They don't really care about the tactics their team uses or the fouls that they may get away with. They just want their team to win. The integrity of the game is beside the point.

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Comments 40 comments

HSchneider 3 years ago from Parsippany, New Jersey

Excellent Hub, Freeway Flyer. Unfortunately the campaign finance disgrace won't be fixed until we have a more sensible, less conservative, and less ignorant Supreme Court. It is true that the IRS handled this horribly. The truth is that all of these groups are political organizations and not social welfare ones. They all, both liberal and conservative, should be taxed.


Karen Rozier 3 years ago

Good insight and humorous. Except for you promoting a flat tax or consumption tax, I was with you.


Jo_Goldsmith11 profile image

Jo_Goldsmith11 3 years ago

Excellent! There should be a flat tax. I so agree with this method. I know I want to open my 401 (c) (4) and I tell you, I have no problem shareing any info on who helped me to help others. Unless of course the donor wishes to remain private. I think Bachman, McConnell and several others hide behind the curtain and take advantage of the loop holes. It is crazy! Yet, the voter is the one who decides who can continue to do this stuff over and over. Great writing and info. It makes sense to me. :)

Tweeted Up++ and shared.


Larry Wall 3 years ago

I use to manage a trade association that was a 401(c) (3), meaning it was a non-profit organization that did not pay taxes. We were a lobbying group, but we could not give money to candidates. We had a state-approved Political Action Committee for that. Dues that the association received could not go the the pac. Dues that member companies paid to the trade association could not be deducted as a charitable contribution, but could be deducted as a normal business expense, except the portion that was spent directly on lobbying.

We did form a non profit philanthropic foundation, for the purpose of creating scholarships and similar projects. The Association was allowed to make limited contributions. None of the funds could be used for political purposes.

I filled out all the paperwork and had to write a very extensive letter explaining how the various groups would be connected but separated. When I was there, and I am sure the effort is continuing, there was no co-mingling of funds. So in this case before the IRS, I am not sure where the fault lies. The the applicants mislead? Did the IRS get over zealous, or did people just failed to pay attention.

If you think your personal tax code is complicated, try applying for a tax-exempt status organization. It is not an easy task.


Jo_Goldsmith11 profile image

Jo_Goldsmith11 3 years ago

Well that kind of lets the air out of my sails! :( I think the whole thing is nuts! Unfortunately we have some who abuse the system and mislead or distort the facts as they know are pre determined. It messes it up for everyone who is trying to make a difference in this world. What was done was wrong.

How it is being handled, is yet to be discussed and debated. I think for the little amount of research I have conducted. There should be simple easy to understand terms. I don't know why this stuff has to be so complicated! It is a difficult job as it is to get the mission statement, bylaws, as well as find the right folks who are trust worthy to partner with. The IRS makes the rest of the process feel like a walk in the park on a beautiful sunny day! Would you happen to share any ideas on how to correct this problem?

Voted Up ++ shared, tweeted.


christopheranton profile image

christopheranton 3 years ago from Gillingham Kent. United Kingdom

It is my opinion that all political candidates should be limited to sending out two booklets of about ten pages, one for the individual candidate and one for the party. They should be sent to every registered voter and only in the week preceding the election. No other form of electioneering should be allowed. If a candidate can not explain their "platform" in ten pages, tough. Those would be the rules. Anybody who goes beyond these strict limits should be disqualified.

This way would ensure a level playing field for all the contenders. It might even result in a higher calibre of candidate, because of the intellectual discipline required to be concise.


Freeway Flyer profile image

Freeway Flyer 3 years ago Author

What are the campaign spending laws in Great Britain?


christopheranton profile image

christopheranton 3 years ago from Gillingham Kent. United Kingdom

I don't think there is any set limit. The system is different here because we don't have presidential style election campaigns with individuals within the same party competing in primaries. The money comes from party funds. This can be collected from the individual party members or from rich donors.

Most of the Labour Party funding comes from the trade unions and a large portion of Conservative Party finance comes from rich people. This causes controversy, because the Conservatives can be accused of being in the pay of the wealthy and the Labour Party are said to be controlled by the "Trade Union Barons".

Of course this gives both of them perfect sticks, with which to beat each other and it makes politics very divisive.


Freeway Flyer profile image

Freeway Flyer 3 years ago Author

Sounds similar to here.


Larry Wall 3 years ago

Freeway Flyer,

I intended to say this in my first comment. Regarding your plan for campaigning, I think you know that would be a tremendous infringement on the First Amendment. Also, if I as an individual want to spend my money to promote a candidate and I do it on my own without any formal connection to the campaign, i.e, I may consult, but they cannot veto or demand, then why should I be denied. We need reform, but we need candidates to reform and we need people to drop the idea of "my Congressman is a good guy, but the rest are all crooks." Your Congressman may be a good guy, but is he doing enough to bring about reform or is he protecting his position. We need a tremendous overhaul of the Congress--both House and Senate and it can start with something as simple and revising the Senate and House rules, reducing the power of the chairman and for the elected officials to work together by working a full week and taking time to understand positions instead of depending on party leaders telling them how to vote.


Freeway Flyer profile image

Freeway Flyer 3 years ago Author

Yes, you're probably right about the first amendment. Although I'm not sure if banning individuals and organizations from using the media "megaphone" of television is taking away their right to say whatever they want. Yes, people have a freedom to state openly what they believe, regardless of what the powers that be may think. But do they have a right to scream it in our faces.

There are lots of things that need to be done to improve the political system. But reducing the amount of time that politicians spend on fundraising is a start. It would certainly save the IRS the trouble of overseeing 501c4 applications for bogus charities.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

The aspect about limiting the authority of the IRS by simplifying the tax code makes a great deal of sense. Historically the treasury has always collected 15-20% of GDP as a revenue stream since the end of WW2 regardless of where the marginal rates were. So a flat tax system in that range would not only limit the power of the IRS, but also eliminate a great deal of wasted resources that could be directed towards more productive use, which would ultimately benefit economic growth and probably generate even more revenue in the long run.

In terms of publicly financing campaigns...Let's think about that for a minute. I for one am not that trusting of any political party or individual. If campaigns were publicly financed, a gov't agency would be responsible for disbursement of the funds. Who do you think would receive them ??? Can you imagine anyone other than their personal friends and colleagues receiving funding. Not likely. With that system, a grass roots guy like Ron Paul would have never stood a chance because he opposed his own party too often. Outsiders would be locked out even further. With a system that allows for private contributions, you the consumer ultimately determines who gets financed. You can boycott products and services of entities that support candidates you disagree with. The only problem with a privately funded system is too many Americans just don't pay attention to issues and who supports what. But if you allowed a gov't body to control the campaign funds, that is like asking the fox to guard then hen house.

And the notion that conservative organized to block their own supporters is a bit out there. They were already behind in fundraising compared too Obama...And frankly they would need some friends in the IRS. If you know any bosses from bureaucratic agencies in Washington, they are about as far to the left as they come. Nearly every agency is dominated by left leaning thinkers. And they are not elected but rather civil service. So they aren't going anywhere.


Freeway Flyer profile image

Freeway Flyer 3 years ago Author

Landmark Wealth,

It's easier having this conversation here. It's hard to say much in 250 characters.

People on both sides of the political spectrum claim that they want to simplify the tax code. It never seems to get close to being on the table, however, which tells me that politicians of all stripes enjoy using the tax code to push their particular agendas.

I think one of the big reasons why this scandal has gotten so much traction is that people just don't like the IRS. I'm sure that many people are enjoying watching that hated agency squirm.

One of the big problems in politics today is that politicians feel obligated to spend so much time fundraising. And much of this money is spent on garbage ads on TV and the radio. So instead of focusing on how campaigns are financed, we should maybe just eliminate political advertising on the major media outlets. Each candidate can just be given equal time during debates or some other forum, so it's basically out in the open. They can also create detailed web sites for people who are actually interested in their positions. Obviously, this is not a foolproof system. But the ultimate goal should be to get the enormous spending out of the system, which causes politicians to be beholden to big donors and to spend less time actually doing their jobs.

I doubt that this was some conservative conspiracy, although it is interesting that the anti-Tea Party guidelines were developed when a Bush appointee ran the IRS. Many establishment Republicans - Boehner, Rove, etc. - are also not big fans of the Tea Party, but anyway . . .

I don't know if this scandal was the result of incompetent bureaucrats or politically biased civil servants or both. But if President Obama was somehow directing this thing from the top, then he is dumber than I thought. Did he really believe that slowing down small-scale Tea Party groups was going to do anything to reduce conservative criticism against him? In the Information Age, where every day is an orgy of political discussion from all angles, it is impossible to silence the opposition. If people want to hear the conservative point of view, they can just flip on certain TV networks or radio shows, or they can go online to browse countless blogs and web sites. So if the master plan was to use the IRS to silence the opposition, you would think he would at least go after Karl Rove's Crossroads PAC/501c4, which spent way more money than all of those Tea Party groups would have been able to do combined.

So is the President that stupid? Even his opponents, who have watched him win two elections, have to recognize that he and his advisers have some decent political skills. And to win in the Information Age, you have to make a more politically effective case than the other guy, not make a hopeless attempt to silence him.

And in response to your statement about voters needing to be more informed, I submit this if you are interested:

http://hubpages.com/politics/Should-We-Blame-the-V...


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

You're correct about the tax code...Few in Washington want to simply the code because it is a method to control people.

The problem with your suggestion is how would anyone who is not a political insider already get in the debate to begin with if not for private funding. Ron Paul was able to run for President by raising money online through grassroots campaigning. If you simply want equal time for each person...who will be the people. Who will be the altruistic angels that will come down from the sky and be put in charge of determining which candidates should be allowed in the debate to begin with versus who will be stifled ??? The reason we have the system we have, although flawed, is it allows a person to speak over the megaphone of gov't if they go to the people directly. You will never limit gov't corruption by giving the gov't more power and authority. That is a path to a totalitarian regime. Money is not the problem. People with money lobby politicians because the politicians have influence. If we limit their influence, there is not a reason to lobby them. I am not calling for anarchy. However, we have a greatly overregulated society from top to bottom. The more Gov't attempts to regulate industry, the easier it is for industry to own the Gov't. This is why contrary to popular opinion, large multinational corporations love the red tape that comes with excessive regulation. It prices the small and mid size business out of the market because they can't keep up with compliance burdens. And allows the corporation a venue to own the politician by buying his influence that he should have never had to begin with.

I don't know if the President ordered this...But he clearly lied about when he found out about it. And he may not be dumb...just arrogant. He has had the media in his back pocket outside of a few venues until he went after the press. I don't know if he ordered it or just found out about it and did nothing. But either way...he thinks he is untouchable. And he is probably correct. And groups like Rove's crossroads already existed and were capable of making more noise. The grassroots movements on both sides are what pose the greatest risk to both parties. If they can be prevented from forming, that is a way to silence opposition. Keep in mind, that this began when the Tea Party movement was just beginning to gain steam, and speaking over both parties. But mainly in opposition to the President. They too back the house, and where a threat to Dem's and country club Republicans while they were holding rallies all over the country in late 2010

In response to your article...The founders understood that the masses could be easily manipulated. This is why they opted for a republic instead of a pure democracy. However, we are free to elect our representatives. We get the Gov't we deserve. If we vote in politicians who make unsustainable promises of benefits that can't be delivered, shame on us for not doing our homework.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

By the way, the IRS official you mention was an Obama campaign donor. The fact that he was appointed by President Bush is irrelevant. It is common practice in DC to appoint people across political isles in order to play nice with the other party now and again. Chuck Hagel was appointed by Obama and he was a Republican Senator. The IRS official in question demonstrated his political ideals by where he donated his own money. There is nothing to indicate he was a conservative.


Freeway Flyer profile image

Freeway Flyer 3 years ago Author

As I said in my last comment, the issue is not simply how money is raised. It may be better to focus on how it is spent. And you mentioned how the current system gives a grassroots candidate like Ron Paul a chance. But once the Republican primaries were over, I didn't see Ron Paul or anyone else up on that debate stage with Obama and Romney. No third candidate has made any noise since Ross Perot, and he basically paid for his own campaign. So the system as it stands does not seem to favor any grassroots candidates. You might need to change the electoral process, establishing some sort of a run-off system, to give anyone outside of the two main parties much of a chance, although I doubt that it will work.

It's interesting what you said about excessive regulations. It sounds like the same issue that we have with the tax code. When you have a complex set of tax rules and business regulations, it favors the big businesses who can afford the time and money to figure out how to work the system. (It helps that the essentially write a lot of the rules themselves.)

In the late 19th century, there were few government regulations, and big business dominated. Today, there are plenty of regulations, and big business dominates. The question for me is not whether or not we will have regulations. It's a question of whether or not the regulations are any good. And although I am not a businessman - outside of trying to sell a few books - I'm sure that small business owners have a point when they complain about the tax and regulatory burdens that they often face.

I know that many people continually claim that there is a liberal bias in the media. Personally, I don't really see it. This may be because I define the word liberal differently than others. Much of the stuff I read in college was far more liberal than most of what you get in the mainstream media - whoever the hell that is - today. I don't watch Fox or listen to Limbaugh, and yet I come across constant criticism of the Obama administration. And if he has had the media in his pocket from the start, it makes you wonder why he would see any need to suppress political dissent. As I said before, it's a lost cause anyway.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

But neither Ross Perot or Rand Paul would have gotten that far if the Republican or Democrat insiders had there way. I doubt we'd even have a primary if he the Gov't controlled the campaign dollars and how they're spent.

In terms of the 19th century, the role of big business was not as pronounced in terms of market domination. Small business owners were plentiful. Regulation is necessary to a properly functioning market. The problem is that today the gov't is not a pure regulator. But often is a market participant in many ways. Regulation is now punitive rather than designed encourage business entities to work with them. The gov't has created an adversarial role with corporate America. Big business doesn't like gov't regulation in the sense that they enjoy it. They just simply use it to their benefit.

The mainstream bias is rampant. There is not a prominent conservative commentator on any channel outside of Fox. Yet, Fox regularly has on liberal voices like Kirsten Powers, Juan Williams, Lamont Hill, Alan Colmes, Greta Van Susteren, Bob Beckel, Dennis Kucinich, & Pat Cadell. Fox has two prominent conservative news commentators. But their hard news reporting is down the middle. The Conservative view is not remotely represented on any station other than occasionally on CNN. Some evidence is the number of negative stories run on Romney during the closing weeks of the election dramatically outweighed those on Obama as documented by the Media Research Center. The recent scandals related to the IRS, Benghazi, Seizing info from the AP and Fox, barely made the news. When it did, it was almost never front page, or it was a back story behind the headline of the Presidents old school pictures being released. They routinely left out paramount information and failed to address how many times the stories had changed or misleading statements/lies the Whitehouse is caught in. Jay Carney has been caught so many times changing his story his heading is spinning. It wasn’t until Holder went after one of their own in the AP that they showed any interest. Fast and Furious didn’t even make the news outside of Fox other than a blurb here and there, yet the AG Holder has been in contempt of Congress for 2 years as a result of his unwillingness to turn over pertinent information regarding the matter. Yet, when phony National Guard documents of President Bush surfaced guys like Dan Rather jumped all over reporting them without taking 10 seconds to verify that they were actually false. During the 2nd Debate as well as the VP debate, anytime Obama or Biden stumbled the moderators would jump in to help them.

In a 2004 poll of campaign journalists, those based outside of Washington, DC supported Democrat Kerry over Republican Bush by a ratio of 3-to-1. Those based inside the Beltway favored Kerry by a 12-to-1 ratio. In a 2001 Kaiser Family Foundation poll, media professionals were nearly 7 times likelier to call themselves Democrats rather than Republicans. In a 2007 Pew Research Center study of journalists and news executives, the ratio was 4 liberals for each conservative. A 2008 Investors Business Daily study put the campaign donation ratio at 11.5-to-1, in favor of Democrats. In terms of total dollars given by the media, the ratio was 15-to-1 in favor of Democrats. None of these numbers are consistent with the electorate. Conservatives are certainly the dominate force in talk radio. For some reason Liberals don’t seem to listen to AM radio enough to keep any prominent liberals on the air outside of public broadcasting. Show like Rush are conservative. And so are commentators like Hannity. But they don’t pretend to be reporters like the folks at MSNBC. And for every conservative point of view on Fox’s commentating shows, there is always an opposing position from the left.

http://archive.mrc.org/biasbasics/pdf/BiasBasics.p...


Larry Wall 3 years ago

Regarding the tax code--not everyone wants it to be as simple as some would like. There are problems with a flat-tax. Does a family of five pay the same as a family of 1. Does the exemption for the elderly and the blind disappear. Do you get credit for casualty and theft losses that are not insured. Will your charitable contributions reduce your taxes and so on and so on. We use to be able to deduct consumer interest. We lost that when auto leasing became so popular and practically the entire monthly note was interest. You do not get to deduct all of your medical expenses. HSA amounts are lower.

There is room for change, but you will find that everyone does not want alll the changes that are being talked about. So, instead of a major overhaul, we need to see if we can restore the tax code to a document that is reasonably understandable and reasonably fair to all people.


Freeway Flyer profile image

Freeway Flyer 3 years ago Author

One reason big business was not as dominant in the late 19th century was that the industrial transformation of the United States was not entirely complete. You could therefore find much more of small town, rural America than you can now.

I draw a distinction between the terms liberal and Democrat, just as I try to do with the terms conservative and Republican. Much of the media may be pro-Democrat, but this does not necessarily make them liberal. If you listen to hard-core liberals like those on the Pacifica Radio Network, then you will believe that all of the mainstream media is essentially controlled by corporations (and that even goes for NPR). And although I get much of my news from "liberal" NPR, I am pretty well informed about all of the scandals that you mentioned.

In my view, Obama isn't much of a liberal. The Nixon administration was far more liberal than Obama has been so far. This gives some indication of how much the country as a whole has shifted ideologically over the past forty years.

Even if you look at the record of the Reagan administration, one is forced to conclude that he would have trouble getting elected in the Republican Party of today. He signed on to an amnesty program for illegal immigrants, went along with several tax increases, authorized weapons sales to Iran in exchange for hostages, and negotiated with the Soviet Union. And the bombings in Lebanon in the early 1980's, along with his weak response, make Benghazi look like child's play.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Yet even today, the vast majority of job creation comes from small business and not big corporations. Corporate America isn't as dominate in every aspect of our lives as many people like to think. But in terms of the tax code and business regulation, they do exercise a lot of influence. And sometimes there a benefits to eliminating small business. As an example, can you imagine what would have happened to us here in Long Island NY during hurricane Sandy if we didn't have Home Depot and Lowes to prepare and recover from Hurricane Sandy. If we had to depend on local hardware stores as we would have 50 years ago, I still be waiting for plywood to shield my windows. They could have never handled the demand as they wouldn't have had the infrastructure built for that.

How you define the term liberal is important. A Liberal in the sense of classical liberalism is really a Conservative with Austrian school economic leanings. The term liberal today is associated with big gov't, which is top down mandates and anything but embracing personal and economic liberty.

Your conclusions about Reagan are way off from the historical record. Fist off there is no evidence that he approved sales of weapons to Iran. The evidence was it happened without him knowing and he had to take the heat for it because ultimately he was in charge. Something Obama doesn't seem to understand. He himself said he deeply regretted the amnesty bill because the democrats never followed through on their end of the bargain, which is likely to happen again in any deal. In terms of tax rates, the overall marginal rates came down dramatically over the course of his administration. Effective rates never change regardless of policy. He agreed to compromise on several increases that were nominal in nature in the areas like payroll taxes if that came along with cuts to Federal spending. Once again congress never delivered on their end of the deal with the cuts. He was not embracing these increases as much as he was mislead/fooled by his opponents. But overall he accomplished a good part of his goal of reducing and simplifying the code during his two major tax acts. He did negotiate with the Soviets, but only through strength...never through capitulation. And your correct he would not fit in to todays Republican establishment. But he didn't fit in back then either. Reagan was the Tea Party of his generation. He ran against the country club Republicans like Ford and Bush. He was an outsider in his own party back then. The Party has move more and more towards the Left (Big Gov't Left) and the Tea Party is exactly the ideals he embraced. Granted he wasn't able to accomplish everything he set out to do. No President ever will unless he is a dictator. But he did change the focus away from Gov't controlling your life to you controlling your life. The Left in America tries to pretend that the Party is to conservative for Reagan today. That is the same nonsense they said about him back then. And it came from the Left and Republican insiders in his day. Today is no different. Guys Like John Boehner are doing everything they can to suppress the conservative movement from the Tea Party and other groups, because they threaten his power and that of the establishment. Guys like Boehner support Conservative ideals when it suits his agenda. When it doesn't, he tries to cut off inside party funding to conservatives like Bachman because they won't play ball with him. That's just how DC works. But don't kid yourself. Reagan was a Tea Party guy before there was a Tea Party. And if your old enough to remember his years in office, then you should already know that.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Larry, regarding the tax code...Yes a family of 5 pays the same as a family of one if the income is the same. The tax code should not be designed to incent human reproduction. Giving deductions for having kids or incurring debt is makes no sense. If you want a house, buy it because you want it and can afford it. If you want kids, have them because you want them and intend to care for them. Not because you want someone else to subsidize your lifestyle. When you start giving exemptions for items like you mention the system is manipulated. Did Ray Charles or Stevie Wonder need a tax exemption because they were blind. Does Warren Buffet need an exemption for being elderly. I realize you'll they those as extreme examples. But the point is that income tax should be determined only based on income. I should not have to subsidize someone else through the tax code because their house was robbed or burned to the ground and they failed to get insurance. If you chose a higher deductible to lower your annual homeowners premium, then the cost of the deductible is your problem. Do I get a tax credit because I paid more for my premiums and maintained a lower deductible ???

Aside from the political lobbying, the historical record on tax Revenue is pretty clear. The revenue won't change as a share of economic activity anyway. So that is not a concern. But the greater simplicity will likely have a good deal of impact on capital being deployed for more productive use. And that economic activity will benefit all of us either directly or indirectly.


Larry Wall 3 years ago

" The tax code should not be designed to incent human reproduction."

The above statement in your last response is the most unprofessional comment you have made in this discussion and was way off base.I do not think anyone has children to gain a tax deduction. The tax deduction hardly covers the cost of raising a child. You can spend the deduction on treating ear aches for one year, in addition to the other costs that come with raising children.

I do not agree with your negotiation theory, but I am not going to discuss it, because it is not going to happen. I will just state again, the statement you made about deductions and children was in extremely poor taste.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Really, perhaps you're not familiar with the NYC welfare system where people routinely have kids for benefits and neglect them. Or the countless people that have taken in Foster kids for the benefits and then neglected or even abused them. It's extremely naive to think that their are parents that don't use their kids for alternative motives. But NO, I am not suggesting that anywhere near the majority of parents in the country have kids for the benefit of a tax break or financial assistance. I am simply talking about subsidies. There are plenty of couples that can't have kids or choose not to. There are also people who simply choose to stay single. Why do you feel the need to ask them to subsidize your reproduction or that of another person. Are they not capable of being responsible for their own actions ??? That's EXACTLY what the tax code does. My Wife and I chose to have 2 kids. If my neighbor who has 4 kids is making the same income that is not my problem or anyone else's problem. They made that decision not me. A tax code that transfers the liability of greater tax rates on people who chose not to have kids and gives the break to someone who does not is a form of subsidy whether you find it offensive or not. Maybe some of us find it offensive that others want us to pay for the decisions that they make when we have nothing to do with them. My point was simply the tax code should not subsidize peoples behaviors or conditions. There are more effective economical ways to address issues in society without instituting punitive taxation for being more responsible.

If your referring to negotiation in relation to my comments under another question around the cost of Health Care...I hate to break the news to you, but it is already happening. Not just example of my Brother in-law I gave you. But concierge medical practices are beginning to pop up all over the country outside the influence of gov't and private insurance. Take note of the recent Dr in Portland who opted out of all forms of insurance...and miraculously his prices where cut in half. I linked to his story below. Markets have a way of eventually circumventing the lunacy of Gov't if enough time goes by.

http://bangordailynews.com/2013/05/27/news/portlan...


Freeway Flyer profile image

Freeway Flyer 3 years ago Author

Considering that federal spending constitutes about a quarter of GDP, the federal government is clearly much more than a regulator. It would be interesting to see what would happen to the prices of college tuition or of health care procedures if government student loan programs or Medicare/Medicaid disappeared. It would also be interesting to see what would happen to poor or elderly people if they could not pay the cash rate or find a private insurer willing to take them on. Even if the prices of health care procedures went down significantly without the injection of government spending into health care, it would not necessarily be cheap. Would private charities pick up the slack? Would people be left to drop dead? I doubt that we will ever find out. Medicare, in particular, isn't going anywhere. Old people have too much political clout, and they are only going to grow as a percentage of the population over time.

I should have know better than to play the Reagan card. Conservatives will almost always rise to his defense. If I make a statement about Nixon running a liberal administration, fewer people will rise to his defense. This is partly because of Nixon's reputation, and partly because the facts support my statement.

The general point I was trying to make is that the country has swayed back and forth from the left to the right, and our definitions of the words liberal and conservative change as well. When you look back to the Nixon administration, there were many laws and policies that sound like a big government liberal wish list: OSHA, the EPA, Clean Air and Water Acts, increased welfare spending, price controls, etc. Can you imagine Obama getting stuff like this through today? But in the late 1960's and early 1970's, a Republican president - forced to work with a Democratic, apparently very liberal Congress - was signing these things. Lyndon Johnson, who came before Nixon, got even more big government programs through. This is what I mean by the climate shifting over the past forty years.

And then there's Reagan. I could go off and write a long comment here explaining what I meant by my earlier comments in more detail. But I have been meaning to write a hub about Reagan that would attempt to separate man from myth (which will not necessarily be designed to trash him, by the way). So it will be a more productive use of time to save it for my future hub. But I will make one quick statement here. You were correct in pointing out that Reagan cannot be held fully responsible for tax and immigration policies implemented while he was President. Given the Democratic majority in the House at the time, and the some time Democratic majority in the Senate, compromises had to be made to get things done. But doesn't the fact that Reagan was able to work out compromises - whatever the merits of these deals - distinguish him from the Tea Party, which generally sees compromise as a sign of weakness or ideological impurity? (His willingness to talk to the Soviets, which was probably one of the best things he ever did, also displayed a man more pragmatic and adaptable than either the conservative or liberal caricatures of him.)


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

I am quite certain the prices of education, and healthcare would come down dramatically without the gov’t distorting prices. This is always the case when the gov’t decides it is not going to act as just a regulator, but a market participant. Colleges are not simply going to close up shop because kids can’t get loans. They’ll adjust prices or they’ll go out of business which is not in their best interest. College is a business like any other business. Healthcare doesn’t have to be cheap. Just affordable. And it was before the Gov’t got into the Healthcare business. Prior to the creation of Medicare/Medicaid, healthcare inflation moved in line with baseline CPI. Since those acts along with the HMO act prices have skyrocketed. Insurance would still be necessary for major health calamities, such as a lung transplant. But we use health insurance to cover basic maintenance which makes no economic sense. Simple things like seeing a Dr for a sore throat, basic diagnostic testing like blood tests or even a flu shot should not be run threw insurance. It should be paid out of pocket. We should make our own decisions about what prices are fair and what we’re willing to pay. This notion that Dr’s can’t or won’t negotiate prices is ridiculous. Dr’s all over the country would love to be able to do this and get Big Brother off their back. We should all be transferred to personal non-employer based, high deductible coverage. It works that way with Auto and Home Insurance, and they don’t have runaway costs. But yet a car accident happens every second all over the country, and very often with major medical and civil liabilities.

Nixon was Liberal by today’s definition of a Liberal. He thought the gov’t could do whatever it wants. And the comments are simply true about Reagan. He was an outsider to the Republicans. They crucified him when he ran against the establishment candidates. And they undermined him often when he was in office. He was no political insider. He made some decisions I disagreed with. But too suggest he wouldn’t fit in with the Tea Party movement because their too conservative is simply not remotely true. The Bush family on the other hand would not fit in with any of the ideals of the Tea party movement. But they would pretend to.

I would argue that since the New Deal, this country has moved in only one direction. More Gov’t all the time. The Reagan years where the only exception. And he only accomplished a small change in the psyche of the country. He was the first person to really speak about the mess gov’t creates in almost everything. And yes Reagan compromised on numerous issues. And he himself latter regretted them, because the congress never held up their end of the deal. That past history is exactly why there unwilling to compromise now. Just look at the current immigration bill. Most conservative don’t want to try and deport millions of people. Nor do we think we have the manpower. But any path to citizenship has to be a counter compromise to first secure our borders. But nobody on the Left or the establishment Repub’s are attempting to secure anything. They want to give away benefits without addressing the problem. Why not demonstrate the border is secure for a couple of years before we let people jump in front of the line behind those who did things the right way. It’s hard to want to compromise with people who have shown you that there word is worthless.


Larry Wall 3 years ago

LandmarkWealth:

I am referring to the earlier post in this thread where you responded to me. First, foster children, do not figure into the equation about deductions for people who have children or adopted children. The foster care system in this country is a mess, and I will not argue with you on that point. Since you provided no numbers about the number of people who intentionally have children in NYC so they can claim the deduction on their federal income tax, I cannot really debate that. However, if your income is so low that you file the short form, the number of deductions usually would not cause a change.

I read the link you included about the Doctor not taking insurance.

Actually, the doctor does take insurance. It may come through the patient, but he takes it. What he has done is refused to accept any insurance assignments, join any HMO, PPO or other similar network.

He bills the patient. He probably discounts the bill by the average discount of the various groups he could join. He then bills the customer, who is overjoyed to get the reduced bill. They then file the insurance claim, since the doctor is out-of-network, not only do they have to file it, the best they can expect to get in return is between 60 and 70 percent. If those people chose the high deductible route, they will only get credit toward their deductible. Under our current tax system, those people could claim that amount, plus the premiums as a medical deduction, provided it exceeded 5.6 (I may be wrong on that number) of their taxable income. Under your flat-tax plan, they could not.

I have a dentist who does not accept any insurance. However, he does not negotiate prices. He will file the claim, and since it is out-of-network, the insurance co. is only going to pay 60 to 70 percent, and the customer pays the rest.

I think you are fairly young, maybe around 35. You have a wife and two kids and maybe a dog. You are probably in good health and cannot imagine ever being in poor health. You own your company.

You know that if you become really successful, and you reach a certain number of employees who work 29.5 hours per week or more, you will have to provide group insurance for them and you do not want to do that. Right now, as the owner of the company, you may have one other agent and maybe a secretary. So, you are in pretty good shape for awhile, until the secretary gets tired of not having an insurance benefit and goes elsewhere.

I am 62 (almost). I had one procedure done where my current "wannabe" insurance would not pay and it was about $1,500 out-of-pocket. I had a cataract removed, my eye doctor said he would take whatever insurance would pay as long as it was equal to what Medicare would normally pay and eat the 20 percent copay . He is a part owner in the out-patient facility where the surgery was done. He got me a discount. I and my family have been patients for more than 20 years. I do not know if he would do that for a new patient. Also, I have to purchase three bottles of eye drops for the prep. That cost was $268.

My son was in a serious car accident several years ago. He was a passenger in the car that was in the right. The offending driver was never caught. My son had spleen surgery, brain surgery, was in intensive care for two week, a regular room for two weeks and had a month of physical therapy. He already had bad eyesight which was made worse by the accident. His total bill exceeded $200,000. I had my company insurance, which cost about $1,400 per month with my share being about $400. I had no bills on my son. About two years later I lost my job. My son is on Medicare because he has residual medical issues because of the accident and the fact he is almost blind. He will probably never have a job that could let him be self-insured. His meds are about $700 a month-retail.

As a financial planner, I assume when you are advising clients not to just stop at their assets, current investments and expected years of employment when planning for the future. I hope you look at how certain costs are going to increase and the need to plan for emergencies. I hope you encourage them to purchase life insurance. I purchase a whole life policy for my son when he was an infant. It had a waiver of premium for disability, and guarantee insurability every few years. Today, he (I) pay no premiums, and every five years for the next 25 or 30 years he will get a policy equal to the first policy and not owe any premiums. So, if he does ever get married, he will not have to be concerned with providing some income for his family.

I had a plan. I was going to retire this year. My last boss, decided, after I had worked 22 years for the company (two years under him) I was no longer needed. I got a nice severance, and a year of COBRA, which I could not covert to an individual policy because the company does not write individual policies in my state. Thus, I could not buy real insurance.

However,while not being a financial planner, I have still managed to pay off my house note, lease a car. The other is paid for. All credit cards are paid off each month, and we go out to dinner a couple of times each month--nothing fancy, but better than McDonald's. At the moment, we are in a slight squeeze, which will be resolved this December. Then after that, everything will be working.

The flat tax is never going to happen. It has been discussed for at least 20 years, and it is not going to happen. Medicare is not going away, and they are not going to cut any significant benefits.

Social Security will be here, but you may have to pay more so I can live my life of leisure. Of course, you are self employed, or work for your own company. You have to pay both the employer and employee portion. That is expensive.

There should be a provision to give the self-employed a break. I could support that. I would also increase the limit where people stop paying SS taxes.

This has been too long, but I am almost finished. You may respond and most likely I will not or at least not in depth. I support your right to have and to voice your opinion. I use to be a newspaper reporter--a firm believer in the First Amendment. However, I do not agree with you, and I do not think we ever will.

I wish you and your family well, and hope that no one in your family develops a serious illness. My mother died of ALS. Medicare did not pay anything extra. She was over 65 and did have a Medigap policy, which was helpful, but my sister and I had to pay a lot out-of-pocket. If Medicare had not existed, any policy she would had purchased that time, would have paid only a fraction of the total medical costs.

We need to revise the tax code, but there are parts of your income that should be free from taxation. I think when I turn 65 or maybe 70, I do not remember, you get a double exemption for yourself. Most of the time, that is of little use, because living on a fixed income, with a large portion of your income coming from SS, the only taxes you owe are for the interest on your savings--401K, etc. Usually, your deduction of state income taxes, state property taxes and a few other things will cover the taxes you may owe. Now that raises another question, under a flat tax I would be forced to pay taxes on the income taxes I pay to the state. I assume I would have to pay income taxes on my property taxes, since no exemptions are allowed. Do you really think that is fair.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Actually, you’re wrong Larry. Patients pay at the point of service directly to the Dr. Whatever they get from insurance is paid directly to them. If the coverage pays Zero, then the patient pays the same as if they were reimbursed 100% for an office visit. It has no effect on his cost. They pay the same if they have no insurance unless he chooses to negotiate a price. The patient is paying the bill directly to the Dr at the point of service as he explained in the video. Each service is priced online. He doesn’t ask or care about what the patient has or doesn’t have for insurance. My Brother in-law has the exact same relationship. Just like Medicare…You can be Participating, Non-Participating or Opt Out. Both he and the Dr. referenced are Opt out. Meaning they don’t get paid by Medicare, nor do they have any contact with Medicare. The administrative mess is the patient’s responsibility. The Dr does NO medical billing or receives no payment from a 3rd party whatsoever. He is paid long in advance of the insurance bill being submitted. If the patient cannot pay his fee, he is free to negotiate it with them directly in advance of treatment. He is not connected to the insurance industry in any way shape or form. The bills are the same with or without insurance. You missed the point entirely. The fact that the Dr is not subject to the Medicare/insurance bureaucracy is expressly why the cost were cut in half. In the case of my brother in-law, he was able to cut the average cost of surgery for things like reconstructive jaw surgery by 2/3rds. If he has a patient whom is unable to pay, he can do something that Medicare or out of network providers are FORBIDDEN to do. They can do the work for free. And actually my brother in-law has done a number of pro bono cases. If he feels the patient is genuine and needs help, he will do it for nothing. When he was a participating Dr, he would get in a whole lot of trouble for that.

The tax deduction must be in excess of 10% of your AGI in order to qualify for the medical deduction. Any no that shouldn’t be deductible. Because if we had a system such as I mentioned, the cost of insurance would be dramatically cheaper. I wouldn’t be able to deduct the out of pocket. But instead of a 15k a year cost for a family of 4 to have adequate coverage, we’d likely be in the 3-4k per year range. So economically the consumer saves a whole lot more money. For Ex…If I had a 10k a year deductible, most years for basic maintenance I wouldn’t spend anywhere near that. On the years I did hit the deductible because of a major event, I would have easily offset that with the thousands I saved in lower premiums over the years. Even if half of, or all of your coverage is paid for by your employer, he is already factoring that into your compensation cost as overhead. So your salary and/or other benefits are reduced accordingly. Either way, a family of 4 is paying the whole premium either directly or indirectly.

My dentist negotiates prices all the time. The reason most Dr’/Dentist still don’t is because most patients are paying through insurance, and most of them get paid more out of network than in network. Ask yourself a simple question. If all insurance was abolished, both Gov’t and Private tomorrow, Do you really believe that the Medical community would just constantly raise prices at rates of inflation that are double digits each year ? Who the hell would be able to pay them ? Do you think they would rather go out of business and go away rather than negotiate prices ? I could sell hot dogs for 100k a piece…that doesn’t mean I would have any customers. You can only sell a product or service if there is a large enough group of people capable of paying for it. The concept of negotiating prices in a market place will only work, if and when the majority of us join the market place. Not with just a few of us doing this. Eventually that will be the case in a generation or two.

And yes I am in fairly good health and age 38. But I was in the hospital for nearly 4 years straight from age 20-24 with a severe case of Ulcerative Colitis which nearly caused me to bleed to death. Ultimately my entire large intestine was removed permanently as a last option for a cure. (Which did work and saved my life). I know exactly what you went through. But that doesn’t change the economics. High deductible plans, would cover tragic catastrophic events or extremely serious conditions. But the cost of those plans to the consumer as well as the cost of the treatments for these events to the insurance company would be greatly reduced if we did not bombard the medical community and the insurance industry with a never ending set of claims for every little hang nail. The reason the Dr mentioned above cut his prices in half is because he eliminated the overhead of the bureaucracy. That reduces the cost all the way around. It makes it less expensive for the Dr, so he charges less. When the patient pays basic maintenance out of pocket, it makes it less expensive for the insurance company because claims are much less common, so they can charge less in premiums. And the overall cost of care goes down. If there is a major medical event, it’s covered. And most likely at a higher level of coverage. What do you think your homeowner’s coverage would be if you asked them to cover the cost of your house being power washed…gutters cleaned…driveway sealed…and lawn cut. All of those expenses and administrative cost would mean you’d pay 15k-20k a year to insure an average American house. The concept is the same. All of these expenses are factored into the Dr and the insurance companies overhead. So with all due respect, your example of what was or wasn’t covered for past family members are examples that took place in a system where prices were distorted by Gov’t intervention. The level of coverage would have been much better for your mother with ALS if every American wasn’t submitting the same insurance company bills for flu shots, sore throats and head colds. You and your sister were effectively subsidizing your neighbors kids sore throat that lasts about a week, by paying more out of pocket for your Mom’s ALS treatment. THAT MAKES ZERO SENSE.

You’re correct that the Flat tax is probably not going to happen, at least not anytime soon. Because the only people who stand to lose are politicians. The same is true for Medicare and SS. Most people don’t understand how the economics of these programs are costing them more and more. They think they are getting benefits for free, when in fact they are getting economically screwed.

In terms of the other deductions you were talking about, it is largely irrelevant as well. Take a look at any tax return for the average American making a middle income. In most cases their effective tax rate is about 15-20% by the time they took all their deductions. The wealthiest of Americans are in the same range because of the available techniques to shelter and defer money. The revenue the treasury gets on average is always around 15-20% of GDP regardless of the credits, deductions, exemptions or changes to the marginal rates. So if we set a flat tax in that range, we’d have the same revenue from the same people, with a lot less paperwork and wasted resources. And a lot less manipulation.

In terms of the Welfare example, they are not necessarily always deductions. It is often direct benefits that individuals receive. NY is one of the Welfare capitals of the country. Although we’re not alone. Each child is another benefit. Any stats are somewhat pointless. For years my father would confiscate from prisoners in Queens criminal court multiple ID’s used for recipients and their kids in order to collect food stamps, and welfare payments. The courts would never even prosecute the cases. They simply weren’t interested. They were too overwhelmed. But just looking at the amount of money spent on Social Services for children tells you how many irresponsible people we are subsidizing. Just like Foster care, the point was to illustrate that people using children for the purpo


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Last part was cut off. I was simply illustrating that it is not far fetched that people would use their kids to cash in on benefits.


Larry Wall 3 years ago

You apparently misunderstood me about the Doctor issue. I know the Doctor is being paid directly by the patient. My intent was to say that if the patient does file a claim and is reimbursed, she is in effect paying for the doctor with the insurance proceeds. It is a minor point. The Doctor probably has a good practice with a large pool of patients, so insurance reimbursement is not a problem. His fees may be a problem for some, I do not know. I am sorry to hear about the illness you went through. I know it had to be a difficult time in your life. I think we have both beat this issue to the point where we need to stop. I have read other things you have written and enjoyed them. On this we will just have to disagree. Wishing you the best, Larry Wall


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Lastly Larry, In the case of the homeowners insurance I gave you. Not just the added numbers of claims the insurance company would receive...But ask yourself what the guy who power washes your house would charge if he knew he could just submit the bill to the insurance company. The auto body industry overcharges all the time on covered accidents for exactly that reason. Most of the time they'll over bill enough to cover your deductible behind the insurance companies back. If I could bill my advisory fee's to an insurance claim, I'd triple my rates for sure. And if I could bill the services to a gov't agency...Oh boy would that be fun...I could live the Life of Riley on the tax payer. I could only dream...


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Thanks for the thoughtful comments. Ultimately the patient is still paying the bill because they're paying the increased insurance premium to get reimbursed.

As I said, you're free to disagree. But if you believe you will ever reduce the cost while simultaneously improve quality and availability of medical care, or any other industry by transferring the liability to a 3rd party, you're kidding yourself. That defies economic law and has never worked in any product or service. The only people who will benefit in the end will be the 3rd party. In this case it's the politicians who make a fortune by getting elected and promising benefits that are unmanageable while they destroy the medical industry. One of the first states to implement Obamacare full scale was California. The insurance premiums went up by 64-146% depending on the policy. Surprise...Surprise. Didn't have that problem prior to 1965.

http://www.forbes.com/sites/theapothecary/2013/05/...


Larry Wall 3 years ago

I never had or allow a claim to be padded to cover a deductible. My broker charges a fee on transaction. Sent which I pay. Be careful with your accusations. I do not appreciate it. I thought we had concluded this.


Larry Wall 3 years ago

Apparently you trust no one. I never allowed a claim to be padded and always try to understand the needs of others. I wish you well.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Talk some folks in the Auto Body Business. Paying deductibles is generally not done if you know your local body shop fairly well. And I trust a lot of people. But not the gov't when it comes to organizing markets and setting prices. They haven't gotten in right once since mankind has walked the earth. Sorry, but another story just broker today about another group of Dr's doing the same...Read below...$3 for a cholesterol test that used to be $90. Amazing. Have a good Weekend.

http://www.breitbart.com/system/wire/upiUPI-201306...


Larry Wall 3 years ago

I checked this link. The first time I found out it would cost my wife and me $2,400 a year to be his patient. It sounds like a premium, low, but still a premium. There is no mention about other lab work that is more expensive or x-rays. Furthermore, you are limited to that one doctor. Without insurance, you will have to pay specialists whatever the market will bear as well as hospital for minor things, such as hernia repair--about $2,500. Also, how long will you have to wait to see the doctor. Does he have a backup doctor, who works for a salary based on those fees? He will eventually raise the fee for children. Most pediatricians do not belong to HMOs because a single illness might require multiple office visits, but they only get paid for a limited number.

I went to check the link again and found that it was no longer available. I tried it in a different browser, with the same result. It could be a computer glitch, or there was an error in the story.

A lab cannot stay in business, pay rent, hire technicians, purchase equipment and carry insurance by charging $3 for a lab test. You are a financial adviser, and that should be obvious to you. I do not know if the story was incorrect, a hoax, a joke or what, but it does not address all the major issues--and I say that as a former newspaper reporter for 16 years. By the way, you mention that Medicare started causing all the problems in 1965. You were not born at that time. You have no concept of the number of elderly, who had no 401k, company pension, or even Social Security, for various reasons. It was a life-saver for them. You can find articles that will contradict everything I said. That is the joy of the Internet. I can find articles to counter everything you say. So I guess time will tell. I thought we were finished, but apparently not.


Larry Wall 3 years ago

The link did come back. Interesting comments--I just hope everyone thinks it through regarding their family doctor, pediatrician, ophthalmologist, OBGYN.

Other doctors are going this . I have a relative by marriage who belongs to a group of doctors with a large patient base and specialists in the group. They do not promise $3 lab tests.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Larry concierge medicine is growing in large numbers. You generally get more personalized service from the Dr since he has fewer patients with the lower overhead. And they often work in practices to partner up with another Dr so there is always someone on call. This has become very popular in southwest Florida near my parents. Often times the Dr will contract out another group of specialist as part of his fee. Not unlike a contractor subbing out work to an electrician. They even make house calls like the used to do in some cases. You're correct you don't get covered for specialist in terms of a major procedure. That is why you carry as high deductible plan. You'd be foolish not to. This is the same concept I was illustrating around auto insurance, or homeowners. The insurance is issued for the non maintenance care. This makes it more cost effective all the way around and allows for the patient and the Dr to be in control of the treatment. Not the High School graduate with no medical training working as a Medicare administrator deciding what does or doesn't get approved.

I wasn't around during the Civil War, nor were you. But we both know the story. The data around medical inflation is very much available. And the data correlated very closely to CPI prior to the creation of Medicare. The dispersion became even more pronounced after Ted Kennedys HMO bill. Since then the CPI index has been far outpaced by the inflation rates on medicine. The reality is that we have more of an availability problem now then we did then. The same is true for things like the Social Security act. The thinking there is one dimensional. Most people don't consider the fact that not only has the poverty level not really improved since the Great Society policies. But things like the SS act negatively impact wages. Employers match dollar for dollar each contribution. Plus they are hit with higher overall taxes to fund national entitlements. So that less money is available for capital expenditures and more productive distribution, which is a drag on wealth creation and the standard of living. The payroll tax employers pay is a direct reduction in wages to the employee.

Don't be so sure a Lab can't stay in business at those rates. When you eliminate gov't intervention, amazing things can happen. Prior to 1975 Brokerage commission to buy a stock where regulated by the Gov't. Back then people paid 100's of dollars to buy a stock. People though if you deregulated the market the industry would drive the price through the roof, so the Gov't had to control the market. In 1975 that all changed. Companies like Charles Schwab & Muriel Siebert created discount brokerages and offered trades at a fraction of the price almost overnight. People just simply had no idea how much fat and waste existed in the system through Gov't manipulation until the veil was lifted. Today a novice investor can buy a stock for $5 even after 40 years of inflation. That's like pennies in 1975 dollars. The efficiency of market forces are an amazing thing, when allowed to function properly.


Larry Wall 3 years ago

We are done. My time can be used better elsewhere. For the record I have probably reported on government waste and interference than you can imagine. Do not reply. You are the first person I have ever blocked.


LandmarkWealth profile image

LandmarkWealth 3 years ago from Melville NY

Now that was unprofessional


Andy 3 years ago

You were looking for a catchy name. How about this? Confis-gate, Because the government confiscates wealth, but will confiscate less wealth if you can get a 501c4s approved. The scandal is about from which groups the government chooses to confiscate the most wealth, especially before an election. One could argue that this was manipulation of the election process.

ps. Some bad blood here.

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