So there was this poor guy, and then there was this other guy in Paradise Valley.
Posted by: Donna
Zelph alerted me to my name being mentioned on a popular AZ conservative blog. Sorry, but I don’t link to them so find it on your own. The blogger complained that Democrats propose tax increases on the poor to pay for the services that the less-poor and the middle class people use. His pique was based on this:
The Arizona Hospital and Healthcare Association is working with consultants on an initiative it hopes will make it to the ballot in November. It would raise money to stop the state from cutting more than 310,000 people from the Arizona Health Care Cost Containment System, the state’s Medicaid program.
Exactly what form the proposed levy would take has yet to be worked out. Laurie Liles, the association’s lobbyist, said consultants and pollsters are looking at what kind of tax would be most palatable to voters. Historically, voters have been particularly receptive to taxing cigarettes; the total levies on those are now $2 per pack.
Funny, I hadn’t realized that The Arizona Hospital and Healthcare Association was a Democratic organization. Someone should let Don Bivens know.
I’ve mentioned here before that I smoke and I did vote for First Things First, though I do agree that tobacco taxes are somewhat regressive. And one of the flaws with using sin taxes to fund programs that don’t directly work to mitigate the harms of the sinful behavior is that they actually do work as disincentives (I smoke a helluva lot less than I used to and the $7 a pack cost has a lot to do with it) and diminish the available funds over time. This leads to having to impose higher fees or find other sins to tax. But when voters are presented with a choice of “pass this regressive tax or poor people will die because they can’t see a doctor” it kind of ties their hands.
That said, I’m immediately suspicious when Republican pundits handwring over “the poor”. Most of them don’t believe in public funding for social services in the first place. Most of them blame the poor for being poor. They definitely don’t think middle class and rich people should be taxed to pay for programs that benefit poor people. So, really, why should they care if poor people are regressively taxed to pay for their own services? Of course, it helps to paint Democrats in a bad light and let them pretend that decades of tax cuts to the rich and corporations had nothing to do with it.
They can also pretend that regressive taxation is fair and just when they present hypothetical contrivances that make it appear to be so, as the conservative blogger does here:
Take the guy who lives in poverty. He pays very little actual tax–primarily on tobacco and if he lives in Phoenix a new sales tax on food. He probably pays no income tax or property tax. Of course, what little tax he actually pays can look like a fairly high percentage, because he has almost no income.
But what does he get from the state? Well, if his kids are in school, the state pays about $8,000 per year per kid to educate them and his family has free health care that’s worth another $5,000 to $10,000 a year. So if he has 3 kids, he receives about $30,000 a year in direct services from the state.
And the guy in Paradise Valley? He gets the same basic services that the poor guys gets, but he surely has health insurance and his kids are likely grown, or they went to private school. So he pays income taxes and property taxes and gets almost nothing in services while the poor guy pays taxes on his cigarettes and gets $30K a year in direct benefits.
Wow, that poor guy is really making out, isn’t he? Let’s look at the health care costs: Is ACCCHS a Cadillac health insurance plan now? Um, no. Assuming he and his family qualify for the full benefit, ACCCHS only pays for whatever health care they consume. If Poor Guy and his family went to the doctor for nothing but routine check ups and vaccinations in a given year, then the state paid far less than $5-10K.
As for Paradise Valley Guy, why assume he doesn’t have kids? Maybe he’s on his second wife and is working the fancy schmancy tuition tax credit racket to pay for Madison’s and Connor’s pricey private school tuition. That’s tens of thousands of public dollars right there. Hey, while we’re hypothesizing, let’s assume Poor Guy works for him. PV Guy pays Poor Guy crap wages and doesn’t give him any benefits. So PV Guy externalizes a truckload of his labor costs onto the public because his employee gets ACCCHS and a host of other benefits. We’re supposed to feel sorry for him and give him YET another tax cut? Don’t think so.
Or, we could stop with the hypotheticals and look at the numbers:
Hey, Arizona Hospital and Healthcare Association, I have one word for you. Oregon.
On edit: If you want to dismiss the percentage the poorest Arizonans pay because you assume they get more government bennies, I suppose you can get away that. But I don’t see what the rich have done to justify getting to pay over a third less what the middle class pays in taxes. People making $40-80K generally don’t qualify for ACCCHS or other public programs. IOW, they’re not getting anything that Paradise Valley Guy doesn’t get (well, except for the tuition tax credits). You can’t justify that disparity, no matter how hard you squint.
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Great piece! I do have one correction, however. Since AHCCCS contracts with private insurance companies like United Healthcare (dba Arizona Physician’s IPA) they pay a monthly premium per member to the insurance company (a capitation payment) which then obligates the insurance company to cover all costs and allows them a profit. The insurance carriers have limited risk under this model, as the state “re-insures” them to protect them against high cost members.
So while the capitation rates are more than the cost of the actual services used (have to allow profits for the private sector!), they are risk and age adjusted so are usually less than $10K a year for the Medicaid population. This group is primarily women and children who don’t use a lot of services. The ALTCS (AZ Long Term Care Services) population is the more expensive group to cover because they require long term care and other high dollar items, so that’s closer to being a Cadillac plan.
Thank you for the correction, Susan.
How come no one talks about taxing beer?
Smoking can kill but so does alcohol consumption.
At last! Someone who udnertsdans! Thanks for posting!