I am a little late to the discussion, of course, but had no access to blogging tools last week, so I hope I can be forgiven.  However, I kept up on the news.  So when I finally read the plans for health care reform released by the Democrats early last week, I was actually shocked at how transparent they were being.  I speak, of course, about the surtax that would be imposed on the rich to pay for the plan.

Those plans have changed a little since the it was introduced last week.  According to the New York Times, House Speaker Nancy Pelosi wants to limit the surtax to an even more narrow portion of tax payers. The surtax, which would originally have covered people individuals making more then $280,000 and couples making $350,000 would go up to $500,000 and $1 million respectively.  The prompt for the second thoughts on such a “broad” tax seem to have come from Senators and House members representing more conservative districts.  These Blue Dog Democrats could cause trouble for Pelosi and co., making the Senate’s 60-vote supermajority not so super.

So Pelosi seems to think she can solve the problem by having even less people pay.  However, I think it’s an unsustainable idea.

Now, I’m not an economist, but I don’t think you have to be one to know what’s going to happen in coming years.  Namely, the supposedly $1 trillion over ten years will balloon.  It happens on nearly every government-run project.  They are rarely ever within budget.  You can try and project your budget, but projection is all it is.  It’s no more than speculation, really.  Later on  reality sets in and you’ve found out that costs have risen and now your budget is way out of whack.

So increasingly the little amount the rich tax is already supposed to bring in ($544 million according to the NYT article) will shrink.  About half the money to pay for the health program is apparently going to be coming from thin air, so what happens when less surtax money than expected arrives in subsequent years?  If you guessed that Pelosi and co. would end up taxing more people to pay for Obamacare, you would probably be right.

How long will it be before taxes for earners making $500,000+ becomes $250,000+, then $100,000+, then $50,000+, then $25,000+?  Maybe it won’t reach this in five years or ten years, but eventually more people will be taxed for this program.  This has been what conservatives have been saying all along, of course.  And I have little reason to think they’re wrong.  The money has to come from somewhere, and if it’s not going to be borrowing from China or increasing inflation by printing money, it will be by taxation.

I mean, if you think about it, common sense dictates that the plan was never going to work.  Consider public education.  Do we tax just the rich to pay for the education of most of a town’s children?  Of course not!  All tax payers contribute to it, and that is what will eventually happen with this plan, too.

I mentioned above that I was shocked that the Democrats were being quite transparent about their intentions.  Upon second look, maybe they’re not being so clear after all.  Are they telling taxpayers what’s really going to happen down the road?  I don’t think they are.