Ve-ne-zue-la, Here We Come!

I had a conversation the other day about "free" healthcare in the UK. "Free" is a funny word in politics. It hides a hard, Heinleinian reality: There ain't no such thing as a free lunch. "Free" always costs someone something.

The truth about "free" is that those who utter it fall into four categories:

• Those who don't know who pays.

• Those who don't care who pays.

• Those who expect someone else to pay, and figure they shouldn’t object because they can afford it. If it’s OPM, it’s ‘free-to-mee!’

• Those who pretend they're not paying because they are defending a policy or ideology.

In the case of UK health care - and more broadly in most benefits bestowed upon Europeans by their governments, the recipients are paying for the "free" health care, education, and so forth, especially when contrasted with American taxpayers.

Fact is, most (all?) the European nations the Dems and Left admire have much flatter tax codes than America's. While just about every income tax scheme I know of is progressive, as in the more you earn, the higher the tax percentage applied to those earnings. "Flatter" means that the rate of increase of that percentage is smaller, and is typically manifested by a higher base rate. When coupled with the Continent's penchant for value-added taxes (averaging 21% in the EU), and such taxes as the UK's National Insurance Contribution (NIC), and the picture becomes quite clear: people over there pay a lot of money into the government programs that provide the "free."

The Europeans that I've met or read are generally aware of this. They know they are paying for services.

On the other hand, Americans have been spoon-fed a narrative that government services can be funded from "not them" sources. That such things as "free" health care can be funded by making the tax code even more progressive, by raising taxes solely on the highest earners, and by sapping the wealth of the most successful.

Consider these chart excerpts from the Tax Foundation (a great resource, here)

First, we see a series of demarcations that identify the "top 0.1%," the "top 1%," and so forth of earners. Take note that this is based on Adjusted Gross Income (AGI) - which is what you see on your tax return after various deductions (including the Standard deduction of $12,950 for individuals and $25,900 for couples) have been... deducted. Note that half of Americans have AGIs below $42,000. This correlates with the median US household income of $70,800.

Next, we see the effective tax rate, i.e. the actual average percentage of income paid by those in the various brackets. It is important to recognize the difference between this effective rate and the percentages that comprise the various brackets in the tax code. The effective numbers are what matter.

See that 3.11% figure for the bottom half of earners? That tells us that half the nation's households pay virtually no Federal income tax. It also tells us that any cuts in the income tax cannot accrue substantially to those bottom half earners, for the simple reason that they already pay a pittance.

This blows up the "tax cuts for the rich" trope, especially when viewed in conjunction with the actual bracket adjustments made in such as Trump's cuts of a few years ago. All the brackets were shifted, so that everyone saw benefit. But, if you already pay pennies...

The reality that the "masses" don't pay much in income taxes was backhandedly acknowledged by WaPo columnist Catherine Rampell here, although she still perpetuates the "tax cuts benefit the wealthy" misdirection.

The article is directed at those on the Left who continue to believe the Bernie Sanders snake oil about "redistributing da wealth" as an effective means of providing "free" health care and "free" money to the working classes.

Bernie and his acolytes, when they're not pitching their other garbage (cough, cough, Modern Monetary Theory), tell the gullible that there is* such thing as a free lunch, because people who do not matter to them (see: the successful) can be fleeced without much harm to anyone in order to pay for all that. Sanders promises Nordic-State outcomes without mentioning the Nordic-State policies (that include heavy taxation of everyone) that support those outcomes.

I do need to mention Social Security and Medicare here. Americans pay 15.3% of their income into those entitlement programs (half comes from employers, but it's still employee compensation), up to a certain cut-off. Rebutters of the "most don't pay anything" conclusion point out that this must be figured into the calculus, but to do so is to acknowledge that FICA taxes are indeed taxes and not the government savings program that all but a few believe them to be. You can't simultaneously call Social Security contributions "my money" and claim they are a tax. So, pick one. But, either way, the numbers still show that most Americans pay far less into the government than those in the lands of "free" everything do.

I seem to recall a message out of a certain South American nation, where a Marxist named Hugo Chavez told the citizens that "free" everything could be achieved by soaking the rich (who could afford to be soaked). That worked out SO well.

Too bad our domestic Best-and-Brightest refuse to heed that lesson, and our Most-Gulliblest refuse to look at history.