William Hamilton: Economics 101: The consumer always pays
February 21, 2012
All too often, someone says: “The government is going to pay for it.”
While it would be nice to have some kind of government fairy godmother to pay the expenses of government, the truth of the matter is that for governments to have money governments must take the money away from people in the form of taxes.
Another fact that seems all-too-often misunderstood is that successful business enterprises pay taxes. But the fact of the matter is that successful businesses only “appear” to pay taxes. That is because to stay in business all the operating costs of the business are borne ultimately by the consumer. In other words, if more taxes are imposed on a business, the business simply adds the cost of those taxes onto the price of the goods and/or services it provides to its customers.
So, whether we buy a loaf of bread or a gallon gas or kitchen appliance or a kilowatt of electricity, all of the costs of producing those items and providing them are passed on to us – the ultimate consumers or users.
Recently, the Obama administration dictated that religious institutions must provide insurance to their employees that must include insurance coverage for contraception devices, birth-control pills, tubal ligation, and “morning-after” abortion-pills. The leaders of the Roman Catholic Church and some of the major Protestant Evangelical groups rose up in protest. They were not about to pay for insurance coverage that ran counter to their basic religious beliefs. Nor did they want to pay for what they saw as a disregard for the religious freedoms guaranteed by the First Amendment.
Responding to the uproar, the Obama administration used an accounting trick. Mr. Obama said he would “force” the insurance companies to provide the offending services for “free” and the religious institutions would not have to pay for them. Hello? The insurance companies offer no goods, services, or protections for free. Someone has to pay for them. Guess who?
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Like all corporations or businesses, the insurance companies must “socialize” all their costs across their customer base, which has to include everyone and every institution that is insured, to include (drum roll) those Catholic-run hospitals, like Holy Cross Hospital, and other Catholic charities.
So, saying that the insurance companies must provide the contraceptive services and abortion drugs for “free” changes nothing. The only realistic step the Obama administration could take to solve this dilemma would be to exempt religious institutions from ObamaCare. According to a recent article in Commentary Magazine, the Obama administration has already issued 1,168 ObamaCare waivers, many of them going to labor unions and other major Obama campaign contributors.
One wonders why Mr. Obama is so deaf to the concerns of Roman Catholics and some Protestant Evangelicals? Wesley Pruden, writing in The Washington Times, says, “Mr. Obama, like the rest of us, is a man formed by the earliest influences in his life. He spent his most formative years in Indonesia, about as far from America as a man can go before he meets himself coming back. He grew to manhood in Hawaii, and finally ended up at Harvard for a little book learning and a lot of attitude adjustment. All worthy places in their own way, to be sure, but hardly places to absorb the faith, practice, culture and lore of America.”
Professor Cal Jillson, at Southern Methodist University, says of Mr. Obama: “He doesn’t have a natural feeling for the depth of emotion of how some Americans hold their religious views.”
According to CatholicNews.com, 54 percent of Roman Catholics voted Mr. Obama into the White House. It will be interesting to see what happens this November.
Nationally syndicated columnist, William Hamilton, was educated at the University of Oklahoma, the George Washington University, the U.S Naval War College, the University of Nebraska, and Harvard University.
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