Occam's Razor

Paul Ryan, former Republican vice presidential nominee and House Budget Committee chairman, has a new concern about Obamacare. It comes from a very selective reading of a new Congressional Budget Office report. The report noted that because Obamacare helps decouple health insurance from employment, some people who are working only because of their employer’s health insurance will quit and get their health insurance through a public exchange instead.

The CBO estimates that the equivalent of more than two million jobs will disappear over the next few years from employees who can now make this choice. Ryan said this means that Americans will “not to get on the ladder of life, to begin working, getting the dignity of work, getting more opportunities, rising the income, joining the middle class”. This is because, apparently, they will prefer sloth instead because they have the option of getting subsidized health insurance from the government instead.

Other Republicans leapt to inferences the CBO never said. The typical talking point became, “Obamacare will destroy more than two million jobs.” As if when people leave their job, employers won’t try to fill those jobs. By this logic anyone who quits their job is destroying jobs. Moreover, last I heard if you quit your job you won’t get free health care. You may be entitled to a subsidy if your income is low enough and if truly destitute and devoid of assets you could go on Medicaid. But that is hardly new. Moreover, employers may be entitled to government subsidies to provide health insurance to their employees. That’s part of Obamacare too. I guess a business could decide not to take these subsidies, but almost all that can will, because they like profits. I don’t see any Republicans referring to businesses that take these subsidies as freeloaders. But people who quit a soul sucking job apparently have no appreciation for the dignity of work and want to be bums.

Personally, I think it’s great when people quit their jobs. People don’t quit jobs they like. They quit jobs they hate. So Ryan could not be more wrong. People who quit a job generally expect to find a better and more fulfilling work somewhere else. If they thought otherwise they would stay in their current job. Obamacare increases personal freedom. Most likely everyone will be better off. Employers will get more productive employees that are more vested in their work and those who quit will be (or expect to be) in a happier situation.

As for the dignity of work being a personal value, it’s a curious argument for a Republican to make. Right now the situation is reversed. Government gives you incentive not to work, not through health insurance subsidies, but by allowing those with cash to invest their money and tax it at rates far less than the tax rates of labor. Capital gains mean nothing to most of us that are working. We may have retirement accounts with six or seven digits of value, and we still don’t care about capital gains. That’s because capital gains do not apply to our retirement accounts. When, in your geezerhood, you do take withdrawals from your Keogh or 401K, you won’t get a capital gains tax rate of 15% like those moneyed Wall Street types get for their non-retirement investments. That money will be taxed as if you worked to acquire them, i.e. earned income. Only those with liquid assets available for investing outside of retirement accounts can take advantage of those low capital gains tax rates. Others like me are taxed at a considerably higher rate because we work and make a good wage. In my case, I am in the 25% tax bracket. As I noted before, others like Mitt Romney don’t work at all, are filthy rich and are in the 15% tax bracket because their income is almost all from capital gains.

If the dignity of work is now an important Republican value, then how about making work pay? People working at Wal-Mart or McDonalds apparently cannot survive on their wages. Many of these people would be malnourished or homeless if they were not getting food stamps or in some cases public housing. If they could survive without government handouts and actually be able to acquire some modest savings and live in their own place, maybe they would feel dignity and value. But many employers don’t care about their dignity or value because they won’t pay them a living wage. What does that say about how employers value labor? Government could set a living wage floor that actually was a living wage. Low income workers would have more money in their pockets and would likely spend most of it, increasing economic activity. Having dignity in your work implies that you can be self-sufficient from your labor. Low wage jobs appear to have the opposite effect.

And if work should be valued, shouldn’t it be valued at least as much as investment income? Unless you inherit wealth, it takes a heap of high-paid labor to acquire surplus funds to invest outside of your retirement. The argument for low capital gains tax rates was to spur economic growth. That doesn’t seem to be working so well, as evidenced by our anemic economy and the high unemployment rate.

So this argument about the dignity of work is one of two things: rhetoric or, if sincere, it should be a call to action for society to put its money where its mouth is. This can be done by requiring employers to pay a living wage and by increasing capital gains tax rates to at least be at parity with income tax rates. Arguably, capital gains and dividends should be taxed at rates higher than labor. It would demonstrate that we truly value labor.

But you already know the answer to the argument: it’s rhetoric. Republicans like Paul Ryan don’t give a damn about the dignity of work or pretty much anyone not in their socioeconomic class and who does not share their values. For those of us in the working class, there is only one appropriate response and it involves lifting your middle finger to these hypocritical assholes.