So What’s Going On With Obamacare?

NOTE: This video was recorded before Donald Trump’s election, which has likely changed the course of the Affordable Care Act going forward. But these comments are on the ACA as it now stands. 

Libertarian magazine Reason interviewed its features editor, Peter Suderman, about the status of the Affordable Care Act. He explains how the rising prices will impact consumers and taxpayers. Is this Obamacare’s “death spiral?”

Corporate Tax Reform Would Benefit Nation, Workers

Abstract View of Urban Scene and Skyscrapers

Lawmakers and candidates on all sides of the political spectrum acknowledge reforming America’s corporate tax rate is overdue. President Obama has even suggested reducing the rate from 35% to 28%. Writing for Reason, Veronique de Rugy of the Mercatus Center sums up the necessity for this, concluding it’s an optimal way to benefit both businesses and the workforce:

Even such high-tax nations as France have lower rates. However, the real competition comes from Canada (26.1 percent), Denmark (25 percent), the United Kingdom (20 percent) and the many countries, such as Ireland (12.5 percent), with rates below 20 percent. Moreover, competition is intensifying. Last June, the U.K. announced that it would cut its rate from 20 percent to 18 percent in the next five years. It’s now saying that it will lower the rate even further, to 17 percent. These reductions are the final stage of drastic cuts implemented since 2007, when the country’s companies faced a 30 percent tax rate. That’s a second wave of reduction since the rate was as high as 54 percent in the 1980s.

Now contrast this with the United States. In the 1980s, policymakers responded to the pressure put on by many countries lowering their corporate rates by decreasing America’s rate from 49.7 percent to 33 percent. However, since then, the U.S. has fallen asleep on the switch (and even raised the rate by 1 percentage point in the 1990s) and is now widely out of sync with internal competition. In 2015, the average corporate rate for countries in the Organisation for Economic Co-operation and Development was 25 percent, down from 48 percent in the early 1980s.

As if that were not enough competition for American companies, the U.S. government burdens them with another layer by taxing them on a worldwide basis. In that system, income from American companies is subject to U.S. taxes whether it’s earned in Seattle, Paris or Singapore. By contrast, most wealthy countries don’t tax foreign business income; about half of OECD nations have “territorial” systems that tax firms only on domestic income. In other words, U.S. exporters face a much less competitive tax system than most of their biggest competitors…

Not everyone would like to reduce taxes on corporations, but everyone should. The data show that most of the corporate tax burden is actually shifted to workers, who end up shouldering the tax in the form of lower wages. With the U.K. taking further measures to reduce its burden on corporations, boosting its workers’ wages and inflicting yet another blow to U.S. competitiveness, Congress should do what’s right by reforming the corporate tax. It may be the one bipartisan issue out there. All we need is leadership.

Freedom Takes a Hit

The good news is that the United States ranks eighth out of 179 countries in the 2010 Index of Economic Freedom. The bad news, according to John Stossel (via Reason Magazine), is that the U.S. ranks behind Canada and that policies (both past and current) are threatening that freedom even more.

For the past 16 years, the index has ranked the world’s countries on the basis of their economic freedom—or lack thereof. Ten criteria are used: freedoms related to business, trade, fiscal matters, monetary matters, investment, finance, labor, government spending, property rights, and freedom from corruption.

The top 10 countries are: Hong Kong, Singapore, Australia, New Zealand, Ireland, Switzerland, Canada, the United States, Denmark, and Chile.

The bottom 10: Republic of Congo, Solomon Islands, Turkmenistan, Democratic Republic of Congo, Libya, Venezuela, Burma, Eritrea, Cuba, Zimbabwe, and North Korea.

The index demonstrates what we libertarians have long said: Economic freedom leads to prosperity. Also, the best places to live and fastest-growing economies are among the freest, and vice versa. A society will be materially well off to the extent its people have the liberty to acquire property, start businesses, and trade in a secure legal and political environment.

Bill Beach, director of the Heritage Foundation’s Center for Data Analysis, which compiles the index with The Wall Street Journal, says the index defines "economic freedom" to mean: "You can follow your dreams, express yourself, create a business, do whatever job you want. Government doesn’t run labor markets, or plan what business you can open, or over-regulate you."

We asked Beech about the U.S. ranking. "For first time in 16 years, the United States fell from the ‘totally free’ to ‘mostly free’ group. That’s a terrible development," he said. He fears that if this continues, productive people will leave the United States for freer pastures.

"The United States has been this magnet for three centuries. But today money and people can move quickly, and in less than a lifetime a great country can go by the wayside."

Why is the United States falling behind? "Our spending has been excessive. … We have the highest corporate tax rate in the world. (Government) takeovers of industries, subsidizing industries … these are the kinds of moves that happen in Third World countries. …"

Beach adds that the rule of law declined when the Obama administration declared some contracts to be null and void. For example, bondholders in the auto industry were forced to the back of the creditor line during bankruptcy. And there’s more regulation of business, such as the Dodd-Frank law for the financial industry and the new credit-card law. But how could the United States place behind Canada? Isn’t Canada practically a socialist country?

"Canada might do health care the wrong way," Beach said, "but by and large they do things the right way." Lately, Canada has lowered tax rates and reduced spending.

Hoosier, Reason Writer Touts Columbus Architecture

Radley Balko, a Greenfield native whose work at Reason I’ve been reading for some time, has scribed a rather interesting piece on how Columbus has become an architectural marvel. He explains how private philanthropy has helped cultivate the structures, which were designed to draw attention and businesses to the town. Read the full article here and see pictures of Columbus’ many creations here:

Columbus, improbably, is one of the most architecturally rich towns in America. The American Institute of Architects ranks it the sixth most architecturally innovative city in the country, after Chicago, New York, Washington, Boston, and San Francisco. GQ calls the burg "an essential destination for the study of contemporary design and planning." Smithsonian says it’s "a veritable museum of modern architecture." National Geographic Traveler recently placed Columbus 11th in its list of the top 109 worldwide historic destinations, and the town now has six buildings on the registry of National Historic Landmarks.

None of this is due to strict zoning laws or preservationism. Little Columbus became an architectural magnet because J. Irwin Miller, a wealthy industrialist and philanthropist, decided 50 years ago to use his fortune to make his hometown a visually interesting place to live. Miller began with the church he attended, then moved on to public buildings, private businesses, and residences.

Miller, who died in 2004, was the longtime chairman of the Cummins Engine Company, one of the world’s leading manufacturers of diesel engines. He first developed an interest in architecture after taking some classes on the subject as an undergraduate at Yale. In 1942 Miller and his family commissioned a new church for their congregation from the Finnish architect Eliel Saarinen. The result, the First Church of Christ, was one of the first modernist churches in the country. Its design included a simple rectangular tabernacle lined with a grid of reflective windows (in which Saarinen included a cross) and a matching freestanding bell tower. Some religious leaders criticized the nontraditional approach, but the church won praise from architecture critics around the world. It’s now the centerpiece of the town’s architectural tour.

In 1954 Miller decided to do something similar for local public schools, whose boring design he blamed for stifling kids’ creativity. So he made a bargain with the city: The Cummins Engine Foundation would foot the architect’s bill (though not the construction costs) for any new school building, as long as the city selected from a list of architects compiled by the foundation. The bargain soon expanded to other public buildings, and by the 1960s Columbus had become a world-renowned magnet for privately financed modernist design. Even the county jail is art: The Cleveland architect Don M. Hisaka designed a round jail with a recreation area capped by a mesh dome. Some of the locals objected to letting convicts live in such an interesting building, until they were assured the place would look pleasant only from the outside.