One of the great thing about the new LifeHealthPro.com website is that making comments here is pretty easy, and we're starting to attract some interesting new commenters.
A couple of weeks ago, in blog entry about the difficulties I have when thinking about what government should and should not do about long-term care (LTC), I lured in some commenters by mentioning Ayn Rand.
I noted the famous story that Rand had received Medicaid and Social Security benefits toward the end of her life, and it suggested that it seemed as if Rand might have decided that the government has some role to play in helping the elderly.
RadCap, a reader who knows a lot more about Rand than I do, explained that Rand believed she was just getting back what the government had stolen from her.
There are many people who like Rand's ideas, such as former Federal Reserve Chairman Alan Greenspan, who seem to accept the idea that some taxes are a necessary evil.
RadCap is a purist. RadCap argues that imposing any mandatory tax is a crime against the taxpayer, and that the government should finance any of the few functions it ought to perform, such as running the court system, with user fees.
On the one hand: 100 years from now, RadCap's position may seem to be as obviously true as the idea that slavery is immoral now seems to us.
On the other hand: I'm not sure if it's really possible to convert our country into a no-tax country.
On the third hand: Government budget analysts now use a form of zero-based budgeting that involves starting by looking at what would happen if the government eliminated all or most tax tax breaks from the Internal Revenue Code.
Maybe it would be an educational exercise to try to think about what LTC financing, including private long-term care insurance (LTCI), if the government got out of the business completely and all state and federal income taxes disappeared.
If there were no Medicaid nursing home benefits, some poor, frail elderly people might be bereft. But, at the same time, people would have a lot more money they could use to save for retirement expenses, buy long-term care insurance and contribute to the kinds of charities that help frail elderly people.
The loss of major tax breaks might reduce sales of acute-care health insurance, the loss might have a much smaller effect on LTCI sales, given how much trouble consumers have with deducting LTCI premiums from their taxable income.
Maybe one conclusion one could draw from looking at LTC planning on a no-government basis is that the current shortfall in LTC planning efforts could be partly due to the effects of government intervention.
Maybe, in a well-meaning effort to use tax incentives to help people pay for acute health care, the government has inadvertently starved consumers of money they might, in at least some cases, otherwise use to prepare for LTC needs — and, of course, made the LTC planning problem even worse by contributing to the forces leading to increases in acute care costs.
On the other hand, maybe not.
What do you think would happen if we went beyond the 10% flat-tax system and somehow converted to a no-tax system?
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