Randy Shannon – 7/29/08

This page was last updated on August 3, 2008.

Let Medicare be used by everybody; Randy Shannon; Beaver County Times; July 29, 2008.

In 2006 Mr. Shannon penned a letter to the editor entitled “The [Beaver County] Times is a tool of the GOP,” and he was serious.

For background info about Mr. Shannon, see my notes on his speech of October 16, 2004, in front of the Beaver County Courthouse.

Below is a detailed critique of the subject letter.

“Across the nation, a consensus is growing to reform health-care funding by adopting the same system every other advanced country uses.”

[RWC] Have you noticed that for some folks, every other country in the world does everything better than the U.S.? For my detailed comments on this issue, please read my paper entitled “Healthcare.” If you view Mr. Shannon’s letter on the Times website, you’ll find the usual suspects used their usual talking points to defend Mr. Shannon’s position.

“That system is a single payer — Medicare — reimbursing the costs for privately delivered health care for every resident of the United States. The elimination of the insurance industry saves enough to expand coverage to everyone.

“The savings are illustrated by a May 15 Times article entitled ‘Two more mills on tap for New Brighton.’ Based on the article, the 49-mill tax at $92,000 per mill brings in $4.51 million. A half million from reserves brings the school district budget to about $5 million. Business Manager John Sepe was quoted as saying that health-care costs are 9 percent and salaries are 46 percent of the budget. That’s $450,000 for health care and $2.3 million for salaries.

“HR676 would be funded by increasing the Medicare tax from 1.45 percent to 4.75 percent on employers and employees. All other medical costs are eliminated. So the New Brighton Area health-care budget would go from the current $450,000 to 4.75 percent of the payroll, or $109,250. Employee premiums, co-pays and deductibles are eliminated.”

[RWC] It’s possible you came away with the wrong idea about the Medicare tax rate. It’s currently 2.9% and Mr. Shannon asserts H.R. 676 would jack it up to 9.5%. Despite spin to the contrary, all of this comes out of the employee’s pocket. The idea employees and employers split the taxes is nothing more than accounting sleight of hand mandated by the feds to hide the magnitude of these taxes. I searched H.R. 676 for the 6.6-point [(4.75 – 1.45) x 2] payroll tax rate increase cited by Mr. Shannon but didn’t find it. All Sec. 211 (c)(1)(C) says is “a modest and progressive excise tax on payroll and self-employment income.” Indeed, H.R. 676’s mention of a “progressive excise tax on payroll” would appear to discredit Mr. Shannon’s claim. In leftyspeak, a “progressive” tax means the tax rate is not the same for everyone but instead increases as your wages increase. Further, there are unspecified increased taxes on income and stock & bond transactions [Sec. 211(c)(1)] in H.R. 676. I’m sure it was an honest oversight that Mr. Shannon failed to note these other taxes. <g>

“Our tax bill is now about 4.9 mills for employees’ health care. Under HR 676, we would pay only 1.2 mills. That’s a 3.7 mill tax savings every year. Imagine this savings spread over every school district and municipality in America.”

[RWC] Did you notice what’s missing? In proclaiming a “3.7 mill tax savings every year,” Mr. Shannon failed to take into account the overall tax effect on the individual. That is, Mr. Shannon failed to balance the alleged 3.7 mill property tax rate cut with the 6.6-point Medicare tax rate increase. The overall tax effect (decrease/increase) on an individual depends on his tax jurisdictions, income, spending, taxable property value, et cetera.

“If you think saving money and covering everyone’s health-care costs from cradle to grave is a good idea, tell U.S. Rep. Jason Altmire to sponsor HR676.”

[RWC] For more info about H.R. 676, please read my critique of “Dump ‘mangled care’.”

As I’ve written before, even if I believed (which I don’t) the idea a government-run, taxpayer-funded monopoly could deliver healthcare cheaper than a true free market system (which we haven’t had since at least WWII) for a given level of accessibility, choice, quality, timeliness of treatment, etc., I’d oppose it because my freedom isn’t for sale.