Our Motto: “Where There’s Always a Thumb on the Scale”
It’s been a while since I chronicled the dishonest commentary of Art Woolf, a.k.a. Vermont’s Loudest Economist. Every Thursday, he blesses us with a few hundred words of pro-business bumpf salted with carefully chosen figures designed to conceal the flaws in his reasoning.
Heck, I could easily write a riposte every week, but that gets old after a while.
However, the two most recent entries in the Woolf oeuvre merit scrutiny, because they touch on significant public policy debates: taxes and health care reform.
His November 5 missive revisits one of his favorite themes: Vermont’s taxes are too damn high. Well, he doesn’t say so exactly; but he presents an array of misleading statistics to bolster that popular conservative argument.
This time around, his foundation is a state-by-state comparison of per-capita taxation, which puts Vermont in 39th place. He compares Vermont to some of the other high-tax states, reserving most of his word count for the ever-popular contrast with our tax-averse neighbor, New Hampshire. And he ends with this bit of mendacity:
I’m not suggesting that Vermont should do this, but New Hampshire’s experience suggests that governments can provide services to people without a large tax burden; in fact with a pretty low one. Children get educated in New Hampshire’s schools, the roads get plowed in winter and paved in the summer, people get health care if they need it, tourists find services and amenities, employers create jobs, and life goes on. Just as it does in Vermont, albeit at a higher cost.
“I’m not suggesting” bwahahahaha. “I’m not suggesting you should eat candy, but there’s a bowl of tasteless steamed broccoli over there and a bowl of delicious, tasty candy right here.”
And yeah, by this measure our taxes suck. But the thumb is, as ever, firmly on the scale and we’re not getting a fair measure. Here are a few things that Woolf conveniently fails to mention.
Taking our total tax intake and dividing by our population is misleading because some of our taxes are imposed on non-residents. We have a vibrant tourism industry, bringing lots of folks from other states and countries. They provide much of the revenue from rooms and meals taxes, plus the sales tax on anything they purchase. And a goodly chunk of property taxes are imposed on absentee owners of vacation homes. If Woolf wanted to provide an accurate accounting of taxes actually collected from Vermonters, he’d have to adjust his figures.
The deception grows worse when you compare Vermont to New Hampshire. The Granite State may not tax sales or personal income, but it imposes a bewildering array of fees and charges. Technically those are not “taxes,” but they’re big revenue sources for this low-tax state.
More importantly, New Hampshire has very healthy non-tax revenue streams designed to make out-of-staters pay. These are crucial to NH’s ability to run a government without sales or income taxes.
NH gets an incredible amount of money from its network of liquor stores and its strategically located toll freeways. Every tourist who drives up the seacoast to Maine, for instance, is contributing a few bucks to the coffers even if they never stop in New Hampshire. Both I-95 and I-93, the two main routes north from Boston, are partially toll roads. They are also home to NH’s largest liquor outlets, designed to draw tourists searching for cheap booze.
(New Hampshire’s per-capita liquor consumption is truly staggering, if you simply divide sales by population. But a lot of that liquor is bought by out-of-staters passing through.)
We couldn’t reproduce those revenue streams in Vermont because our geography is much less favorable. NH benefits from its location close to Boston and the vibrant tourism corridor along the Seacoast. We don’t have any comparable high-traffic corridors or nearby metropolises to draw from.
New Hampshire also enjoys huge economic benefits in business and property wealth thanks to its proximity to Boston. Southeastern NH is home to thousands and thousands of people who work in the Boston area, and many businesses that need to be close to the big city. They don’t pay income or sales tax, but they pay plenty of property taxes. We couldn’t duplicate that in Vermont even if we wanted to.
And then we have Woolf’s central assertion, that NH manages to provide services with much lower taxes than Vermont. Aside from the fact that NH has inherent revenue advantages over Vermont, it’s fallacious to imply that NH’s level of government service is comparable to our own. In fact, our schools are better, our social services are better, we provide more and better health care to our population, and we provide better pay and conditions for our public-sector workforce.
Vermonters have decided, over and over again, that we want to do better than New Hampshire in providing government services and a social safety net. That’s who we are, and that’s unlikely to change no matter how many misleading anti-tax columns Art Woolf writes.
Plus, our costs are inherently higher because of our small population base. (Compared to NH, I’m sure we have more miles or roadway per capita that have to be plowed, graded, repaired, and resurfaced.)
And now to his most recent essay, which tries to poke holes in the progress made under the Affordable Care Act.
He begins by acknowledging, reluctantly, that the Affordable Care Act has dramatically reduced the number of uninsured Americans. He allows that Vermont has done an especially fine job in this regard.
And then he starts picking nits. He begins by remmoving all senior citizens from his “real” count, on the . grounds that seniors are covered by Medicare anyway. Which, okay, why not exclude veterans too? Why not exclude any group whose insurance coverage was unaffected by the ACA?
The point is, Art, that this statistic is a widely accepted baseline measure of the ACA’s impact. If you propose to change it, you’d better have a good reason. And you don’t.
His reliance on his own altered statistics makes it hard to determine the quality of his reasoning. Which maybe is the real point: as usual, he’s custom-designing his numbers to fit his own arguments.
We now arrive at the most deceptive part of Woolf’s column. He chooses 2006 as a starting point — why, I don’t know — and informs us that while the number of uninsured has dropped significantly under Obamacare (and Shummycare), the real story is a broad transfer of insurance from the private sector to government.
Vermont’s Medicaid rolls have increased dramatically, from 105,000 in 2006 to 145,000 in 2014. At the same time the number of Vermonters getting their health insurance in the private insurance market — through their employers or on their own — has fallen from 396,000 to 350,000. Those numbers tell me that there has been an almost one to one substitution from privately provided health insurance to government provided insurance for the under 65 population.
The percentage of Vermonters without health insurance has declined, to be sure, but that change from 11 percent to 6 percent obscures the larger dynamic—the substitution of publicly funded health insurance for privately funded.
The way Woolf puts it, you’d think Obamacare was a massive power grab, wrenching Americans away from the tender embrace of their employers and into the stifling bear-hug of Big Government.
Is that what really happened? In part, yes; Obamacare allowed employers to drop their own insurance plans in favor of the ACA. This is entirely voluntary, and a decision made by employers.
That’s part of the story. The larger narrative, which Woolf ignores, is that the private sector has been steadily cutting benefits and flatlining wages. Fewer workers are getting health coverage through their jobs. More workers are being offered high-cost, low-benefit plans.
And a lot more employers are offering less than a living wage. WHich is why Vermont’s Medicaid rolls are exploding.
The phenomenon Woolf detects in his carefully-chosen statistics is not a government takeover — it’s an abdication of responsibility by the private sector.
It used to be, back when labor unions were strong, that working Americans made enough money to buy a house and send their kids to college. Their health and retirement benefits were strong enough to provide security. That’s not the case any longer. And, as businesses large and small are engaged in a frantic race to the bottom, the government is picking up the slack.
And of course, the private sector balks at paying taxes to cover the costs they’ve offloaded.
So, Professor Woolf, don’t blame the government for providing health insurance when the private sector fails to do so. Blame your buddies and consulting clients in the world of business.