In this morning's NY Post, E. J. McMahon excoriates the health care overhaul plan winding its way through the halls of Congress: "NEW YORK'S economy and tax base, already sagging in a deep recession, would take another huge hit under Rep. Charles Rangel's plan to impose a surtax on high-income households to finance a new government-run health plan."
Echoing many of the things we have already said about the plan's small business impacts-but with greater expertise and detail-McMahon tells us: "For New York City residents, it would be closer to 59 percent, the highest in the nation. The impact wouldn't be limited to Park Avenue swells. Much of the taxable income in the highest brackets is reported by owners of and investors in small businesses. Higher income taxes will drain the working capital of small firms, sapping the resources they'll have to add jobs and recover from the recession. And small businesses who fail to offer health insurance to their employees will be slapped with another tax -- an 8 percent payroll tax -- under the House plan."
The question here is, how come Charlie Rangel-already under an ethical cloud-hasn't been run out of town on a rail? The Rangel mindset-frozen in stone in the Mesozoic Era-is the Kiss of Death for New York's already fragile economy: "While Rangel says his surtax on top brackets would represent "the least amount of pain on the least amount of people," the ripple effect of a shrinkage in the state and city tax base would be felt by many more New Yorkers. Because the Empire State is home to such a large concentration of successful and wealthy investors and business owners, its entire economy benefits when federal tax policy is focused on economic growth and wealth creation. By the same token, a policy geared to income redistribution will drain the resources needed to rebuild our own economy. By the middle of the next decade, many more New Yorkers may be receiving free subsidized health coverage -- while wondering what happened to their jobs."
Rangel's betrayal of New York is breathtaking in extremis; underscoring the perils of a seniority system that rewards placeholders without any real acumen. Perhaps Rangel was simply too busy seeking funds for his own City College memorial to ponder the dire impacts of what will-if passed-henceforth be known as "Rangel's Folly."