Wednesday, September 29, 2010

More anti-tax nonsense

The “anti-tax” revolt in the state of Washington has taken another mendacious twist with Initiative 1082, which claims to save tax payers’ money by privatizing worker’s compensation. Not only will this save money, we are told, but it will “save our jobs.” The foolish Seattle Times’ editorial supporting the initiative noted that this is a business-supported measure, so it would be wise to question their motives. Once more we are provided with propaganda meant to fool the voters into thinking that this is about “jobs” and not more business profiteering on the backs of the disabled. That workers will no longer pay the workers comp tax has been dangled out there as a lure, but which means that businesses that do pass on the cost to workers in the past will see an immediate increase in what they pay. Supporters of the initiative claim that competition will “eventually” lower rates, but this has mainly been true in other states in part due to collusion between businesses and insurers to the detriment of workers. In Washington, the problem is that it is too easy to get compensation; in other states with privatization, the problem is that it is too hard.

In order for privatization to “save” money, it would have to weave around a mishmash that takes into account wages, level of potential workplace injuries, confused jurisdictional and regulatory control and the various insurers own corporate culture, all of which 1077 is purposely vague about. The current state system has high costs, and may not be entirely solvent, but is less susceptible to the principle sin of privatization: the profit motive. Supporters of the initiative claim that that there will still be some state oversight of private insurers, and that there will be some “guarantee” that the same level of coverage will be maintained; but like private insurers in the health care industry, the profit motive will inevitably lead to cherry-picking the "best" and charging the rest higher premiums, as well as providing lesser benefits and more frequent denials of coverage. AIG, a major provider of private workers’ comp, has for years been the subject of investigations for scandalous activity and fraud in workers’ compensation. Conversely, some insured businesses have been accused of purposely under-reporting injuries on the job, in order to pay lower premiums. That some insurers actually pay “dividends” to businesses for money saved on reduced claims, suggesting a high level of claims denials.

Meanwhile, Initiative 1077 seeks to end sales taxes on candy, soda, bottled water and other processed junk “food.” Frankly, bottled water is is one of the biggest consumer scams going, and people who waste money on it deserve to pay taxes on it. The tax hardly hurts the megabusineses that deal in junk, but it is the “principle” involved for the anti-tax crowd. What should be the real point of contention is the sales tax’s effect on the principle consumer of junk—the low-income consumer who is more likely to spender a greater proportion of their income on it. Why do people buy so much “junk?” Not necessarily because its cheap; a full “meal” at McDonald’s is not “cheaper” than fresh fruit, vegetables and lean meat in the grocery store. “Cheap” was 30 years ago; what passes for a “king-size” candy bar today cost ten cents, and you could buy a handful of candy for a few pennies. Today, a candy bar barely larger than a bite-sized nibblet in a Halloween bag costs a dollar.

People like “junk” because it’s “processed,” meaning that it can be consumed on the run. There is also the psychological aspect; in conditions where there is little joy, junk food provides some temporary “enjoyment.” Junk food also tends to be “fulfilling”—as in filling the stomach quickly and absorbing whatever “demand” that the stomach is making at the time. But aside from the not likely chance that the recently-passed tax will actually convince junkies from weaning themselves off their addictions, there is the “class” issue: that the junk food tax is regressive because it effects people with less money but spend more of it on junk to a greater degree (although one suspects that a few pennies on a soft drink can will barely be noticed). But curiously, this has not been the principle talking point in support of the initiative. It will “hurt” Washington businesses, according to them. In reality, this is just part and parcel of the general anti-tax campaign that targets any and all taxes indiscriminately. The supporters of the measure do not care about the health and well-being of junk food junkies or their income status. As always, this about the maintaining the “status quo.”

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