If low-income Coloradans spend big bucks on booze, candy, & movies, they can afford higher Medicaid copays

Are Colorado Medicaid recipients spending hundreds of dollars on candy, booze, cigarettes, and movies while the state forces taxpayers to fund their medical care?  Yes, suggests the 2009 Consumer Expenditure Survey.

“Colorado faces a deficit of about half a billion for next year,” the Associated Press reports.  Instead of increasing taxes, Colorado legislature should spend taxpayers’ money more wisely. One way is to increase enrollment fees and co-payments for Medicaid and the Children’s Health Plan Plus (CHP+). These programs account for ten percent of the state budget.

Typical Medicaid co-pays are at most $3. CHP+ co-pays are at most $5, and enrolling one child is just $25 annually. The 2009 Expenditure Survey data suggests that some Medicaid recipients and parents with kids in CHP+ can afford more.

On average, the lowest income households, less than $5,000, spend almost $1,900 on sweets, alcohol, tobacco, and entertainment. Oddly, households with incomes between $5,000 and $10,000 spend less on these items – around $1,400. The groups’ non-income demographics are similar: people, wage-earners, children, and retirees per household.

Colorado CHP+ could emulate New Hampshire’s tax-funded “Healthy Kids” program. As in Colorado, parents earning between 185% and 250% of the Federal Poverty Level are eligible, though well above the poverty line. The monthly fee is $32.  Typical co-pays are $10, $100 for ER visits, and between $10 and $30 for prescriptions.

Many parents in this income range buy private insurance for their kids, reports the Congressional Budget Office. Higher fees and co-pays could encourage more parents to follow suit.

The Boulder Daily Camera published this article on March 26, 2011.

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One objection that I’ve seen to higher-copays is that patients or parents of children will forgo treatment, and wait until medical conditions get very serious before seeking treatment. If so, the argument goes, it would cost taxpayers more in the long run.

For sake of argument, let’s say this is true.  Then:

1. This shows one reason that replacing Medicaid with a voucher for  nominally “private” insurance is better. After all, government issues food stamps for food rather than running its own grocery stores.

2. Would you choose to donate to a charity that allows its recipients to spend money on entertainment and leisure while skimping on medical care?   I don’t think so. If Medicaid & CHP+ recipients respond this way to higher co-pays, this reveals a flaw with the programs themselves.  A good private charity would not allow such behavior. Or, if it did, it would quickly lose donations when word got out.

Government shouldn’t force taxpayers to donate to a specific charity, or any charity. But if government “must” force donations, at least it’s better to allow taxpayers to choose the charity. For more, see: <a href="http://www.huffingtonpost.com/brian-t-schwartz/questioning-your-compassi_b_574030.html”>Questioning your “compassionate” politics.

Donations vs. Taxes

Here’s a short video illustrating the coercion behind government-mandated charity.

For more, see GeorgeOutToHelp.com.

I discuss related issues in my Huffington Post article, <a href="http://www.huffingtonpost.com/brian-t-schwartz/questioning-your-compassi_b_574030.html”>Questioning your “compassionate” politics. For example, if you really care about helping a certain group of people, asking government to do it is the last thing you should want. This is like committing yourself to donate to a charity forever, regardless of its efficiency and effectiveness.

I found this post via a link to Reason.tv in comment on Arnold Kling’s post, “Donations vs. Taxes.”  In response to criticism, Kling writes:

[T]he idea that I need to show my gratitude to others by expressing support for coercion seems perverse. I would think that voluntary donations would be a much more sincere expression of gratitude than joining in the project of collective coercion.

For true compassion & charity, vote NO on Boulder Ballot Issue 1A

Boulder County Ballot Issue 1A would increase property taxes for “county human services programs and for contracts with non-profit agencies maintaining a safety net for families and children in Boulder County.”

Support for measures convinces me that supporters of tax-funded and operated charities really do not care about the causes they supposedly support. Rather, supporting government charities are a way to shirk the responsibility to make sure your charitable donations is spent wisely. It’s more like phony compassion and making the appearance that you care. As I <a href="http://www.huffingtonpost.com/brian-t-schwartz/questioning-your-compassi_b_574030.html” target=”_blank”>wrote at the Huffington Post:

Why does being compassionate mean supporting government-run schools and health plans (or charitable causes)? This makes little sense if you view these programs as government-run charities. Would you agree to perpetually donate a portion of your monthly income to the same charity – regardless of its effectiveness? If the charity is doing a lousy job, wouldn’t you want the freedom to find a better one?

By supporting government-run charities like Medicaid and tax-funded schools, you relinquish this freedom. You could try to improve their performance through the political process. But this is grossly inefficient and ineffective compared to using on-line charity rating services to find a charity that deserves your donations.

Compulsory charity is also unfair:

Questioning your “compassionate” politics

My <a href="http://www.huffingtonpost.com/brian-t-schwartz/questioning-your-compassi_b_574030.html”>first article/post for the Huffington Post appeared today. It begins:

“You oppose Medicaid and government-run schools? You’re heartless and lack compassion.”  If you have ever made this accusation, even tacitly, I invite you to reconsider the government policies you support.

Why does being compassionate mean supporting government-run schools and health plans? This makes little sense if you view these programs as government-run charities. Would you agree to perpetually donate a portion of your monthly income to the same charity -  regardless of its effectiveness?  If the charity is doing a lousy job, wouldn’t you want the freedom to find a better one?

Read the whole article: <a id="title_permalink" title="Permalink" href="http://www.huffingtonpost.com/brian-t-schwartz/questioning-your-compassi_b_574030.html”>Questioning Your “Compassionate” Politics. (Update, the Denver Daily News also published the article.)

Thanks to Ari Armstrong, Paul Hsieh, Dave Kopel, and my wife for their comments. Thanks to Jessica Corry for putting me in touch with HuffPo.  I acknowledge many others in links within the article.  One person I did not link was Michael Cloud, whose book Secrets of Libertarian Persuasion was quite helpful, especially for this sentence, which is basically his:

If you support mandatory charity, what do you authorize government to do to those who peacefully refuse to cooperate?

I also recommend Cloud’s CDs on this topic. Great material, and not much overlap with the book.

Peter Saint Andre also inspired some of my ideas for this article. Many years ago I read his essay, On the Road to Voluntary Government Financing.

Don’t raise taxes, legalize marijuana

The Boulder Daily Camera published my short piece on why the city should not raise taxes.  Also check out (in the comments) Seth Brigham’s open records research on how the City of Boulder spends money.

The city should cut its spending — just as families, nonprofits, and companies have in response to decreased income. To stay in business, companies reduce spending by laying off employees. These employees respond by being more frugal. Governments should do the same, and resist the temptation to increase tax rates.

Voters who want to increase the city’s revenue should put their money where their vote is. Instead of imposing their preferences on everyone else, they should oppose tax rate increases and donate their own money to the city. Better yet, they could donate to their favorite tax-funded programs. For example, Wednesday’s Camera article about this issue mentioned funding for housing and human services, RTD, and libraries.

We’re not talking about the law enforcement and public safety here, but some programs that perform the same or similar functions as nonprofits or companies. Why should these programs receive tax dollars when the nonprofits and companies they unfairly compete with must raise money from willing donors or customers?

In the face of decreased revenues, why should the City of Boulder act differently from everyone else? It should not be exempt from fiscal responsibility. City Council should be creative, find ways to cut costs, and do more with less.

In the comments I noted that Colorado would see increased tax revenue should they legalize and tax the sale of marijuana.  See Jeffrey Miron’s study here and mention of this idea for Colorado at Politics West here (along w/ a commenter who pointed me to Miron’s study.) Of course, the plant should be legal to grow and consume regardless of tax revenues, as I wrote here.

Uncharitable: how regulations stifle charities

I’ve written many times about how government social programs unfairly compete with charity. Here’s a Reason.tv interview with Dan Pallotta, author of Uncharitable, on how rules for non-profits stifle their ability to be much more effective than they are.

Proper tax treatment of charities thwarted by welfare state

The Denver Post published my letter to the editor in their March 31 edition:

Joel Stein’s commentary against tax-deductible charitable donations is penny-wise but pound-foolish. By favoring some types of spending and punishing others, the tax deduction indeed violates our freedom to spend our earnings as we please. He suggests that the increased tax revenue from eliminating the deduction could “help pay for health care.” But compared to the tax deduction, this is a much worse violation of our freedoms.

Tax-funded health care is mandatory charity. Unlike voluntary charities, government charities need not compete for and earn your donations. The penalty for tax evasion effectively encourages your “donations.”

If Mr. Stein wants more fairness toward charities, he’d support allowing taxpayers to opt out of funding entitlement programs by donating to charities of their choice. For example, if you donate $100 to a low-income medical-care charity, Medicaid loses that funding and you pay $100 less in taxes.

Boulder Ballot Issue 1B: Follow the money to the “Worthy Causes”

Update to: “Worthy Cause Tax”: It’s not Your Penny to Give.

In a letter published in the Boulder Daily Camera, Rich Miller writes:

Citizens for a Worthy Cause sent out a glossy mailing this past week, encouraging voters to approve Boulder County 1B.  Issue 1B will continue an existing sales tax and allow county commissioners to distribute our tax dollars to the charities of their choice. … And who are these Citizens for a Worthy Cause? No individual citizens contributed, only non-profits who stand to benefit from 1B at our expense.

Rich Miller has made an excellent insight. (Ralph Shnelvar has also noticed.)

Ten of the fifteen organizations that donated to Citizens for a Worthy Cause have received revenue from this sales tax.  These ten organizations have donated almost $27,000 to extend the tax this year, and have received more than $1.8 million in sales tax revenues from previous years.  I flush out the details below. (As Rich also did in his on-line comments.)

In a previous article I made the case that Ballot Initiative 1B, which would extend the “Worthy Cause” sales tax, “is immoral — regardless of how worthy the causes are.”  As a compulsory charity, “it is intolerant to people’s values and unfair to charities that must earn our donations. It undermines both the responsibility of donors and the accountability of non-profits that receive forced donations.” Those who voted for the measure could have raised the money in this year’s Worthy Cause Fund had they each donated $50.  Instead, they force us all to donate.

Colorado’s Secretary of State office lists the contributors to Citizens for a Worthy Cause here.  Boulder County lists the recipients of the tax revenues here.   What follows are the dollar figures for each organization, and links to where you can make a voluntary donation.

Ballot Issue 1B: “Worthy Cause” Tax, It’s Not Your Penny to Give

The Daily Camera published my article on the 2008 Boulder County Ballot Issue 1B today. (print version)

Update: The so-called “Citizens for a Worthy Cause” that support this are really the very organizations that receive the tax revenue.  See here.

Ballot Issue 1B: It’s not Your Penny to Give
by Brian T. Schwartz

Would you call the police on someone who didn’t donate to a charity that you consider to be a “worthy cause”?  If not, then you should oppose County Issue 1B in this November’s election, which would extend the so-called “Worthy Cause” sales tax.  This tax is immoral — regardless of how worthy the causes are. It is compulsory charity, or charity at gun-point. It is intolerant to people’s values and unfair to charities that must earn our donations. It undermines both the responsibility of donors and the accountability of non-profits that receive forced donations.

Obama will “ask us” to serve

In his speech at the University of Colorado, Colorado Springs, Barack Obama says he will “ask Americans to serve” and “ask for your service.”  But will he ever actually ask?  Sure, he can ask for our vote, and there a point where all eligible voters can choose to vote for him or not.

But when will Americans have the choice to serve or not? In his speech he outlines several new government-run tax-funded service programs.  But when do we have the choice whether to fund these or not?  When does he ask us, and when do we have a chance to say “no”?  Or is Obama saying he wants to take our money without asking, and then with it create government programs that give others the opportunity to serve?  If so, why doesn’t he say that?