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NY Times Calls Health Bill "Attack on Wealth Inequality"


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#1 TenFree

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Posted 27 March 2010 - 10:05 AM

Economic Scene
In Health Bill, Obama Attacks Wealth Inequality

By DAVID LEONHARDT
Published: March 23, 2010

For all the political and economic uncertainties about health reform, at least one thing seems clear: The bill that President Obama signed on Tuesday is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.

Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rates have fallen more than rates for the middle class and poor.

Nearly every major aspect of the health bill pushes in the other direction. This fact helps explain why Mr. Obama was willing to spend so much political capital on the issue, even though it did not appear to be his top priority as a presidential candidate. Beyond the health reform’s effect on the medical system, it is the centerpiece of his deliberate effort to end what historians have called the age of Reagan.

Speaking to an ebullient audience of Democratic legislators and White House aides at the bill-signing ceremony on Tuesday, Mr. Obama claimed that health reform would “mark a new season in America.” He added, “We have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their health care.”

The bill is the most sweeping piece of federal legislation since Medicare was passed in 1965. It aims to smooth out one of the roughest edges in American society — the inability of many people to afford medical care after they lose a job or get sick. And it would do so in large measure by taxing the rich.

A big chunk of the money to pay for the bill comes from lifting payroll taxes on households making more than $250,000. On average, the annual tax bill for households making more than $1 million a year will rise by $46,000 in 2013, according to the Tax Policy Center, a Washington research group. Another major piece of financing would cut Medicare subsidies for private insurers, ultimately affecting their executives and shareholders.

The benefits, meanwhile, flow mostly to households making less than four times the poverty level — $88,200 for a family of four people. Those without insurance in this group will become eligible to receive subsidies or to join Medicaid. (Many of the poor are already covered by Medicaid.) Insurance costs are also likely to drop for higher-income workers at small companies.

Finally, the bill will also reduce a different kind of inequality. In the broadest sense, insurance is meant to spread the costs of an individual’s misfortune — illness, death, fire, flood — across society. Since the late 1970s, though, the share of Americans with health insurance has shrunk. As a result, the gap between the economic well-being of the sick and the healthy has been growing, at virtually every level of the income distribution.

The health reform bill will reverse that trend. By 2019, 95 percent of people are projected to be covered, up from 85 percent today (and about 90 percent in the late 1970s). Even affluent families ineligible for subsidies will benefit if they lose their insurance, by being able to buy a plan that can no longer charge more for pre-existing conditions. In effect, healthy families will be picking up most of the bill — and their insurance will be somewhat more expensive than it otherwise would have been.

Much about health reform remains unknown. Maybe it will deliver Congress to the Republicans this fall, or maybe it will help the Democrats keep power. Maybe the bill’s attempts to hold down the recent growth of medical costs will prove a big success, or maybe the results will be modest and inadequate. But the ways in which the bill attacks the inequality of the Reagan era — whether you love them or hate them — will probably be around for a long time.

“Legislative majorities come and go,” David Frum, a former speechwriter for President George W. Bush, lamented on Sunday. “This health care bill is forever.”



Since Mr. Obama began his presidential campaign in 2007, he has had a complicated relationship with the Reagan legacy. He has been more willing than many other Democrats to praise President Reagan. “Reagan’s central insight — that the liberal welfare state had grown complacent and overly bureaucratic,” Mr. Obama wrote in his second book, “contained a good deal of truth.” Most notably, he praised Mr. Reagan as a president who “changed the trajectory of America.”

But Mr. Obama also argued that the Reagan administration had gone too far, and that if elected, he would try to put the country on a new trajectory. “The project of the next president,” he said in an interview during the campaign, “is figuring out how you create bottom-up economic growth, as opposed to the trickle-down economic growth.”

Since 1980, median real household income has risen less than 15 percent. The only period of strong middle-class income growth during this time came in the mid- and late 1990s, which by coincidence was also the one time when taxes on the affluent were rising.

For most of the last three decades, tax rates for the wealthy have been falling, while their pretax pay has been rising rapidly. Real incomes at the 99.99th percentile have jumped more than 300 percent since 1980. At the 99th percentile — about $300,000 today — real pay has roughly doubled.

The laissez-faire revolution that Mr. Reagan started did not cause these trends. But its policies — tax cuts, light regulation, a patchwork safety net — have contributed to them.

Health reform hardly solves all of the American economy’s problems. Economic growth over the last decade was slower than in any decade since World War II. The tax cuts of the last 30 years, the two current wars, the Great Recession, the stimulus program and the looming retirement of the baby boomers have created huge deficits. Educational gains have slowed, and the planet is getting hotter.

Above all, the central question that both the Reagan and Obama administrations have tried to answer — what is the proper balance between the market and the government? — remains unresolved. But the bill signed on Tuesday certainly shifts our place on that spectrum.

Before he became Mr. Obama’s top economic adviser, Lawrence Summers told me a story about helping his daughter study for her Advanced Placement exam in American history. While doing so, Mr. Summers realized that the federal government had not passed major social legislation in decades. There was the frenzy of the New Deal, followed by the G.I. Bill, the Interstate Highway System, civil rights and Medicare — and then nothing worth its own section in the history books.

Now there is.


In case you didn't get what is really going on here, Max Baucus clarifies it for us:

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"Attacking income inequality" and "addressing mal-distribution of income" are just another way of saying "redistributing the wealth," which is another way of saying.....naw, I won't go there...yet. ;)
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#2 boneboybob

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Posted 27 March 2010 - 10:32 AM

http://www.nytimes.c...ey/26every.html

NOT long ago, I had the pleasure of a lengthy meeting with one of the smartest men on the planet, Warren E. Buffett, the chief executive of Berkshire Hathaway, in his unpretentious offices in Omaha. We talked of many things that, I hope, will inspire me for years to come. But one of the main subjects was taxes. Mr. Buffett, who probably does not feel sick when he sees his MasterCard bill in his mailbox the way I do, is at least as exercised about the tax system as I am.

Put simply, the rich pay a lot of taxes as a total percentage of taxes collected, but they don’t pay a lot of taxes as a percentage of what they can afford to pay, or as a percentage of what the government needs to close the deficit gap.

Mr. Buffett compiled a data sheet of the men and women who work in his office. He had each of them make a fraction; the numerator was how much they paid in federal income tax and in payroll taxes for Social Security and Medicare, and the denominator was their taxable income. The people in his office were mostly secretaries and clerks, though not all.

It turned out that Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. Further, in conversation it came up that Mr. Buffett doesn’t use any tax planning at all. He just pays as the Internal Revenue Code requires. “How can this be fair?” he asked of how little he pays relative to his employees. “How can this be right?”

Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class warfare.

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”




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#3 boneboybob

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Posted 27 March 2010 - 12:12 PM

The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.


-- Adam Smith, The Wealth of Nations

Obviously he was some kind of freedom-hating communist. :rolleyes:

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#4 TenFree

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Posted 27 March 2010 - 01:06 PM

http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html <snip>

Mr. Buffett, with immense income from dividends and capital gains, paid far, far less as a fraction of his income than the secretaries or the clerks or anyone else in his office. <snip>


You've posted this before. The main reason he paid such a smaller percentage of his income in taxes is because dividends and capital gains are taxed at a lower rate (and rightly so) than ordinary income and because of the income cap on payroll taxes, which I agree should be raised.
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#5 TenFree

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Posted 27 March 2010 - 01:20 PM

-- Adam Smith, The Wealth of Nations

Obviously he was some kind of freedom-hating communist. :rolleyes:


To hear some Dems tell it, the poor in this country are wallowing in misery and deprivation. Yet most of those so-called "poor" would be considered middle class by European standards.
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#6 boneboybob

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Posted 27 March 2010 - 11:35 PM

The main reason he paid such a smaller percentage of his income in taxes is because dividends and capital gains are taxed at a lower rate (and rightly so) than ordinary income


Why? Why is income earned by the sweat of one's brow taxed less than income earned by the fact that one "owns" something?

Are you seriously suggesting that a waitress, taxi driver or McDonalds employee who makes $20,000 works less than someone who owns property or stock that creates $20,000 in income, and deserves less of that money?

I think the idea that ownership should be more privileged than labor (in terms of how it's treated for tax purposes) is ridiculous. If that makes me a socialist, well, I'm a socialist. That's Adam Smith's point- the poor are unlikely to ever accumulate property (homes, stocks, etc.) that lets them get passive income. They earn their income by their labor. Why penalize them compared to a zillionaire?

Yet most of those so-called "poor" would be considered middle class by European standards.


Ever been to Mississippi? Or the inner city somewhere in the US? Ever been to Europe?

Edited by boneboybob, 27 March 2010 - 11:39 PM.

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#7 Gayle Meyers

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Posted 28 March 2010 - 08:54 PM

It is only a "hidden" agenda for someone who only listens to the Right Wing Echo Machine. Damn right, he's trying to undo Reaganomics: the trickle down bullshit is the whole reason our economy is in the mess that it is in today. Thanks for waking up.
As Kings said before:

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#8 TenFree

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Posted 28 March 2010 - 09:03 PM

Why? Why is income earned by the sweat of one's brow taxed less than income earned by the fact that one "owns" something?


Come on, you know just as well as I do why. The "more privileged" tax rate for capital gains is designed to create incentives for investment in capital assets that generate growth, as well as encourage entrepreneurship. BTW, have you forgotten that it was Clinton who signed the Taxpayer Relief Act of 1997 (a bill that a majority of демократы voted for) that reduced the top capital gains rate fell from 28% to 20%, a bigger cut than that later made by Bush?

I think the idea that ownership should be more privileged than labor (in terms of how it's treated for tax purposes) is ridiculous. If that makes me a socialist, well, I'm a socialist. That's Adam Smith's point- the poor are unlikely to ever accumulate property (homes, stocks, etc.) that lets them get passive income. They earn their income by their labor. Why penalize them compared to a zillionaire?


That position would put you at odds with President Obama, at least as far as qualified small business stock is concerned. http://www.startupco...business-stock/ I find it ironic that you would be citing Adam Smith, who is widely considered as the founder of free market economics. The living conditions of the poor have improved substantially since Smith's time, which I will address below. I think you're looking at the issue the wrong way. It's not so much that the poor are being penalized as it is that those at the higher income levels are being given a break for taking risks. It's not just the wealthy who own stocks these days. Also, there are drawbacks as well as advantages to capital gains, such as the fact that they are not adjusted for inflation and, in the case of dividends, double taxation.

Ever been to Mississippi? Or the inner city somewhere in the US? Ever been to Europe?


No, but I've been to Petersburg, Virginia. Does that count? Posted Image

Executive Summary: Understanding Poverty in America

Published on January 5, 2004 by Kirk Johnson, Ph.D. and Robert Rector

If poverty means lacking nutritious food, adequate warm housing, and clothing for a family, relatively few of the 35 million people identified as being "in poverty" by the Census Bureau could be characterized as poor. While material hardship does exist in the United States, it is quite restricted in scope and severity.

The average "poor" person, as defined by the government, has a living standard far higher than the public imagines. The following are facts about persons defined as "poor" by the Census Bureau, taken from various government reports:

* Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
* Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
* Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
* The typical poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
* Nearly three-quarters of poor households own a car; 30 percent own two or more cars.
* Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
* Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
* Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry, and he had sufficient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.

Of course, the living conditions of the average poor American should not be taken as representing all of the nation's poor: There is a wide range of living conditions among the poor. In contrast to the 25 percent of "poor" households that have cell phones and telephone answering machines, ap-proximately one-tenth of families in poverty have no phone at all. While the majority of poor households do not experience significant material problems, roughly a third do experience at least one problem such as overcrowding, temporary hunger, or difficulty getting medical care.

The good news is that the poverty that does exist in the United States can readily be reduced, particularly among children. There are two main reasons that American children are poor: Their parents don't work much, and their fathers are absent from the home.

In both good and bad economic environments, the typical American poor family with children is supported by only 800 hours of work during a year--the equivalent of 16 hours of work per week. If work in each family were raised to 2,000 hours per year--the equivalent of one adult working 40 hours per week throughout the year--nearly 75 percent of poor children would be lifted out of official poverty.

As noted above, father absence is another major cause of child poverty. Nearly two-thirds of poor children reside in single-parent homes; each year, an additional 1.3 million children are born out of wedlock. If poor mothers married the fathers of their children, nearly three-quarters of the nation's impoverished youth would immediately be lifted out of poverty.

Yet, although work and marriage are reliable ladders out of poverty, the welfare system perversely remains hostile to both. Major programs such as food stamps, public housing, and Medicaid continue to reward idleness and penalize marriage. If welfare could be turned around to encourage work and marriage, the nation's remaining poverty would quickly be reduced. This is, perhaps, the best news about poverty in the United States.


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#9 Gayle Meyers

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Posted 28 March 2010 - 09:17 PM

Come on, you know just as well as I do why. The "more privileged" tax rate for capital gains is designed to create incentives for investment in capital assets that generate growth, as well as encourage entrepreneurship. BTW, have you forgotten that it was Clinton who signed the Taxpayer Relief Act of 1997 (a bill that a majority of демократы voted for) that reduced the top capital gains rate fell from 28% to 20%, a bigger cut than that later made by Bush?



That position would put you at odds with President Obama, at least as far as qualified small business stock is concerned. http://www.startupco...business-stock/ I find it ironic that you would be citing Adam Smith, who is widely considered as the founder of free market economics. The living conditions of the poor have improved substantially since Smith's time, which I will address below. I think you're looking at the issue the wrong way. It's not so much that the poor are being penalized as it is that those at the higher income levels are being given a break for taking risks. It's not just the wealthy who own stocks these days. Also, there are drawbacks as well as advantages to capital gains, such as the fact that they are not adjusted for inflation and, in the case of dividends, double taxation.



No, but I've been to Petersburg, Virginia. Does that count? Posted Image



As Babs Bush said, "This is working out very well for them" . Are you kidding? Is this a joke? And how about that abortion issue? What we need are more single-parent homes, according to your post - right?
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#10 TenFree

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Posted 28 March 2010 - 09:41 PM

As Babs Bush said, "This is working out very well for them" . Are you kidding? Is this a joke? And how about that abortion issue? What we need are more single-parent homes, according to your post - right?


How in the world do you arrive at that conclusion from this, at least I assume that's what you're basing it on? Posted Image

As noted above, father absence is another major cause of child poverty. Nearly two-thirds of poor children reside in single-parent homes; each year, an additional 1.3 million children are born out of wedlock. If poor mothers married the fathers of their children, nearly three-quarters of the nation's impoverished youth would immediately be lifted out of poverty.


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#11 boneboybob

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Posted 29 March 2010 - 06:03 PM

It's not so much that the poor are being penalized as it is that those at the higher income levels are being given a break for taking risks.



Oh, I see, it's the "you lazy poor person, you should have been born a Kennedy or a Hilton so you could take risks with capital" theory of tax policy.

So poor people should be taxed more of their income (on a percentage basis) than rich people should, because the rich can take risks? No. Not buying this.

And you're damned right I'm at odds with a lot of Democrats with my positions. Who do you suppose writes campaign checks? Predominantly rich people, therefore the tax code is heavily biased in their favor. I think Clinton did plenty of corporate whoring (but at least he raised marginal rates on income and expanded the EITC, two things that really helped make it LESS corporate whore).

I find it ironic that you would be citing Adam Smith, who is widely considered as the founder of free market economics.


OF COURSE I'm using Adam Smith. That's the point. The Wealth of Nations doesn't just talk about invisible hands. Classical liberalism's ideas included "don't fuck over the poor", and modern conservative thought glosses this over about Saint Adam Smith because it doesn't fit into their neat little ideological box of using capitalism to justify plutocracy.

Executive Summary: Understanding Poverty in America


Ooooh, a Heritage Foundation report! No chance of that being massively biased towards conservative/libertarian viewpoints!

Rector's got a bit of an axe to grind on poverty. He's also one of the jokers responsible for the waste of money that's abstinence-based sex education.

And let's see, a quote from 2006:

Administration officials and outside advisers say education accountability and school choice; home ownership; and efforts to encourage marriage and further revamp welfare by requiring more recipients to work -- all efforts Bush supports -- ultimately help the poor."The Bush administration has had a consistent, forward-looking strategy on poverty," said Robert E. Rector, a senior research fellow at the conservative Heritage Foundation. "They have had a consistent effort to raise work levels, reduce out-of-wedlock childbearing and promote marriage."


How's that worked out?


Posted Image

Heck of a strategery, Bushie. Oh, look, the poverty rate went DOWN during the two terms of President "I got a blowjob". Not so much during the two terms of President "Tax cuts for the wealthy". Fancy that.

Edited by boneboybob, 29 March 2010 - 06:12 PM.

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#12 LA Kings Fan

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Posted 29 March 2010 - 06:50 PM

Come on B3 ... HISTORY, ECONOMICS and MATHEMATICS aren't subjects republican'ts have any use for, why do you think they're re-doing those pesky text books in Texas. ;) :rolleyes:

Posted Image

Posted Image

Edited by LA Kings Fan, 29 March 2010 - 07:00 PM.

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#13 TenFree

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Posted 29 March 2010 - 07:54 PM

name="allowFullScreen" value="true"> type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385">

Well there you go. He admits it's wealth redistribution. Gotta give him credit for being honest.

Edited by TenFree, 29 March 2010 - 08:57 PM.

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#14 boneboybob

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Posted 30 March 2010 - 06:30 AM

http://www.washingto...0032900720.html

"Welcome to the club of states who don't turn their back on the sick and the poor," [French President Nicolas] Sarkozy said, referring to the U.S. health care overhaul signed by President Barack Obama last week.

From the European perspective, he said, "when we look at the American debate on reforming health care, it's difficult to believe."

"The very fact that there should have been such a violent debate simply on the fact that the poorest of Americans should not be left out in the streets without a cent to look after them ... is something astonishing to us."


President Sakozy, by the by, is a conservative, not a socialist (in fact, his opponent during the 2007 election was a socialist).

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#15 Puck

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Posted 30 March 2010 - 08:53 AM

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/29/AR2010032900720.html



President Sakozy, by the by, is a conservative, not a socialist (in fact, his opponent during the 2007 election was a socialist).


Yeah, but he's all French and everything.

I'm just sayin'.....

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#16 MightyMoe

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Posted 30 March 2010 - 11:20 AM

And democratically elected at that. Not appointed by the courts.

And an attack on wealth inequality is a bad thing? The difference in income or wealth between the top 20 percent of the wealthiest and the bottom 20 percent of the poorest in the US is about 8 to 1. This is about the highest in any of the industrialized nations. Historically when the ratio drops to or below 5 to 1 strange things happen. People get more civil. Homicide rates go down. Use of prescription antidepressants and psychoactive drugs goes down. Child and spousal abuse goes down. Divorce rates go down. Richard Wilkinson spells all this out in his books on the subject.

Yes, I suppose it is a bad thing to the greedy, stingy, heartless fucks that make up the Right these days. Those whose "Christian" values are "greed is good", and spitting on, kicking or stealing from those who are less fortunate is charity.

Edited by MightyMoe, 30 March 2010 - 11:26 AM.

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#17 Guest_leopold_*

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Posted 30 March 2010 - 02:33 PM

Caution, slightly off topic post!

During the health care debate one of the main issues the Right brought up was, of course, tort reform. How the lawyers were sucking us dry. They had to be stopped.

Now I spend a lot of time in my car. And when I'm driving without Sirrius radio (or sans sirrious for our French speaking members) I have to listen to FM. So I bounce back and forth and at least twice a day check out KZLA, the right wing Christian station.

Want to know who advertises on that station, and I mean, all the fucking time!?

Three different law firms dedicated to suing doctors.

Is there a disconnect here I can't figure out?

#18 Gayle Meyers

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Posted 30 March 2010 - 05:12 PM

Caution, slightly off topic post!

During the health care debate one of the main issues the Right brought up was, of course, tort reform. How the lawyers were sucking us dry. They had to be stopped.

Now I spend a lot of time in my car. And when I'm driving without Sirrius radio (or sans sirrious for our French speaking members) I have to listen to FM. So I bounce back and forth and at least twice a day check out KZLA, the right wing Christian station.

Want to know who advertises on that station, and I mean, all the fucking time!?

Three different law firms dedicated to suing doctors.

Is there a disconnect here I can't figure out?


Yes, the same disconnect I TRIED to point out to TenFree regarding his post that was decrying the poor for having fatherless homes, and yet the Right being stupid about outlawing abortion so that there would be MORE of those homes. New flash: people aren't going to stop having sex! Especially if they are poor and it is about the only recreation that they can afford.

Yes - we elected Obama to even the gap between the rich and the poor. (gasp!)
Get used to it!

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#19 MightyMoe

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Posted 30 March 2010 - 05:49 PM

Caution, slightly off topic post!

During the health care debate one of the main issues the Right brought up was, of course, tort reform. How the lawyers were sucking us dry. They had to be stopped.


Texas enacted tort reform on medical malpractice and medical insurance suits putting a cap on the amounts. As a result Texas has the worst, most convoluted and expensive health insurance policies in the nation. But don't let facts get in the way of a Republican talking point.

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#20 Guest_commyboy_*

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Posted 30 March 2010 - 07:35 PM

Why? Why is income earned by the sweat of one's brow taxed less than income earned by the fact that one "owns" something?

Are you seriously suggesting that a waitress, taxi driver or McDonalds employee who makes $20,000 works less than someone who owns property or stock that creates $20,000 in income, and deserves less of that money?

I think the idea that ownership should be more privileged than labor (in terms of how it's treated for tax purposes) is ridiculous.


are you seriously suggesting that people pay capital gain taxes for owning property? No, you flatly stating it.

confusion and conflation reign

errr drrr snark,,,,



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