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Bulls & Bears
On Saturday October 17, 2009 on "Bulls & Bears," Brenda Buttner was joined by Gary B. Smith, Eric Bolling, Bob Froehlich, Rob Stein and Julian Epstein.
Senate Majority Leader Harry Reid Prices Health Care Bill at $2 Trillion: Will Tax Hikes Double?
Gary B. Smith: Absolutely this means higher taxes, probably $700-800 billion more. That's assuming this reform comes in on budget. Estimates suggest reform will lead to more than a 10 percent tax increase per household. With higher taxes, the government still gets the same amount of revenue -- and it kills the economy.
Eric Bolling: Harry Reid had a 'Joe Biden Moment' and let slip out what really goes on behind closed doors. It won't be $856 billion, it won't be $2 trillion, but more like $4 trillion. Individual plans were going to be taxed at $8,000 but now it's going to go up to $21,000, while family plans were going to be taxed at $21,000 but now it's going to go up to $49,000. Bottom line: this is going to be a very expensive health care plan and very harmful to the economy.
Julian Epstein: Harry Reid was not saying that the current plan will cost $2 trillion, but that the public and private health care enterprise costs that much. The context was the savings you would get as a result of tort reform, which would be about $50 billion. Critics have said we should listen to the CBO, and they are saying $800 billion. This is a deficit neutral plan for universal health care.
Bob Froehlich: This is going to be the largest tax increase in the history of our country, although we won't realize it because it will be sliced and diced a million different ways; it won't feel as bad as it actually is. You can't have a plan that costs $2 trillion without raising taxes and fees on everyone. When you raise taxes on hospitals and pharmaceutical companies, they pass these costs onto consumers. The individual on Main Street has no idea what is about to happen to him.
Rob Stein: We don't need to raise taxes at $2 trillion, all we have to do is quadruple everyone's salary, quadruple corporate profits, and quadruple GDP. Obviously we are going to have to spend more—but higher taxes aren't always a bad thing.
"Fat Tax" Not Working; Time For Gov't To Butt Out?
Eric Bolling: How about some personal responsibility? Parents should stop giving their kids soda and sweets, but they don't need to be taxed for doing it. We have kids dying in the fields for our freedom to choose what we eat.
Bob Froehlich: Why does every answer have to be higher taxes? This is your life, you have to take responsibility for it. Why does the government have to tell you what you can and cannot eat?
Julian Epstein: Anyone who is familiar with the tax code knows it is based on creating incentives and disincentives for economically productive activity. There is an enormous amount of data showing that taxes on things like soda (and particularly tobacco) has a significant market impact. Price Waterhouse Coopers did a study that showed $500 billion a year is attributable to the health care system because of unhealthy living. We have an obesity crisis in this country.
Gary B. Smith: Yes, the tax code can create incentives and disincentives, but is it the government's job to move us in certain directions? There are just as many studies that show that preventative health care doesn't amount to any cost savings. Since 2003, the government has spent $9 billion on the War on Drugs, while adolescent drug use has gone up during that time.
Rob Stein: I agree that taxes are a great way to 'incentivize' behavior. It's clearly a place where you can increase revenue, and if it isn't hurting consumption of the product, why not tax it? Behavior that hurts the total should result in some sort of consequence. Preventative health care is a good thing in the long run.
Fire Minimum Wage Laws to Create Better-Paying Jobs?
Bob Froehlich: The minimum wage kills jobs—get rid of it forever. All it does is ties the hands of businesses. When businesses are flexible, they make more money and hire more people. You cannot be for jobs, while being against those who make the jobs by forcing them to pay a minimum wage.
Eric Bolling: Getting rid of the minimum wage could certainly help hire more people. In rough economic times, business fear having to lay off workers if there is an increase in the minimum wage.
Julian Epstein: We're talking mostly about service industry jobs here, as well as a minimum wage that will barely allow you to stay above the poverty line. During the last 8 years, we saw the average working family lose $2,000 per year in income. However, during the Clinton administration, we saw the incomes of the bottom 20 percent increase at a faster rate than the incomes of the top 20 percent. Getting rid of the minimum wage is going to increase the poverty rates and income inequality. Overall, that's bad for capitalism and bad for the market.