American Forum Op-Ed

Imagine joining friends for a late-night game of Monopoly, but in this game, there’s a twist: At the start of the game, one player gets an entire side of the game board, from Pacific Ave. to Boardwalk, including the Short Line railroad. Instead of pondering easy questions like whether to be the shoe or the thimble, you’re now grappling with a more important question: Do you even stand a chance in such a lopsided game?

As you ponder the fairness of this board game, Congress is debating the very real future of our federal estate tax, a tax on inherited wealth designed in part to prevent one player from owning most of the board before the game even begins.

Recently, a new proposal was introduced in an effort to break through the stalemate that has led to the current tax holiday for the super wealthy. Because of the inability of Congress to reach agreement back in December, the year 2010 is slowly passing as the first since 1916 with no estate tax. Billions of dollars are now being transferred tax-free, while our national deficit grows. The heirs of the late Texas billionaire Dan Duncan stand to inherit, free of any estate tax, more than the average American earns in 4,000 lifetimes. No one questions the right of parents to pass on a legacy to their children, but how much is enough?

Despite its kitchen table status today, the Monopoly board game can trace its roots to Lizzie Magie, who created the game in 1903 as an educational tool to help people understand that free market economies, absent rules to ensure otherwise, naturally move toward monopoly control as wealth is increasingly concentrated into the hands of the few. It takes public policies, from anti-monopoly rules to progressive tax systems, to protect free markets from this self-destructive tendency. The fact is: any economic system is effective only to the extent that its more extreme aspects are reined in.

Our progressive tax system, including the estate tax, helped guide our economy and fuel the broadly shared prosperity our nation experienced during the post-war period. However, that progressive tax system came under a 30-year assault which began in the early 1980s. We’ve seen the consequences of this backsliding and the misguided tax cuts for the wealthy. Instead of the promised trickle-down, we got stagnant wages for most Americans and the widest disparity of income our nation has seen since 1928, just before the Great Depression. It’s time to recapture the core values that made our economy work, beginning with the preservation of a strong estate tax.

The importance of a strong estate tax cannot be overstated. Transfers of wealth from generation to generation impact every aspect of our economic landscape, even the persistent racial wealth divide. While we’ve made significant strides at closing the income gap in the half-century since the great Civil Rights victories, the gap in actual wealth is much harder to shake because wealth transfers forward. Even today, African-Americans have only 10 cents of net wealth for every $1 of net wealth that whites have. Latinos have 12 cents. Without a strong estate tax, the inequalities of the past will forever haunt our nation, leaving the Monopoly board permanently tilted.

Sen. Jon Kyl (R-AZ), Sen. Blanche Lincoln (D-AR), and other estate tax opponents are wrong in trying to weaken the estate tax. Congress should instead work to preserve a strong estate tax for the benefit of all Americans. A robust estate tax represents the kind of commonsense solution that balances the desire to protect small businesses and farms with generous deductions, while ensuring that the super-wealthy give back to support the country that made their prosperity possible.

Even in a game – like Monopoly – we can see the need for rules to ensure that opportunity continually circulates throughout our economy to create a broadly shared prosperity for all, not just a select few. Preserving a strong estate tax is essential to ensuring that each subsequent generation has a chance to achieve the American dream. Without it, we have to ask ourselves, is the game hopelessly stacked? Should we even bother playing?

Governor Bobby Jindal continues to fight healthcare reform even though the political fight is over now that the Affordable Care Act (ACA) is the law of the land.

Since President Obama signed it into law, Jindal has ordered Attorney General Buddy Caldwell to file suit against the law. He has reversed Insurance Commissioner Jim Donelon’s plan to participate in the high-risk pools the law creates which provide coverage to adults who have been denied coverage due to pre-existing conditions. And he’s had DHH Secretary Alan Levine act as the administration’s public face in the effort to pass a constitutional amendment here to nullify aspects of the ACA, particularly the individual mandate to buy coverage.

These moves might advance the governor’s national political ambitions, but they are bad for Louisiana and harmful to its citizens.

The ACA addresses much of what ails healthcare in Louisiana. Chronic disease is rampant in our state, particularly heart disease, diabetes, high blood pressure and cancer. We have higher death rates from those diseases here than the rest of the country. This is because these diseases go untreated for too long. When people finally go to a doctor, the disease has reached more advanced stages and is harder and more expensive to treat.

That these chronic diseases go untreated for so long is largely attributable to the fact that people don’t have access to care to detect those diseases at the earliest stages. The primary barrier to care is cost.

The ACA will knock down that barrier by providing tax breaks to businesses and subsidies to individuals so that they can afford insurance. That coverage will enable Louisianans to get the care they need when they need it.

The act also mandates that insurance pay the full cost of regular checkups and wellness exams, making it more likely that chronic diseases will be detected earlier.

The prevalence of chronic disease in Louisiana also restricts the ability of residents here to get insurance. The pre-existing condition exclusion severely limits the ability of small businesses to get coverage. It also limits the freedom of Louisiana citizens to change jobs or start businesses because of their inability to get coverage. The pre-existing condition exclusion for adults will be outlawed under ACA by 2014. The ACA will eliminate the pre-existing exclusion for children this summer.

The biggest burden on healthcare providers in Louisiana is the large percentage of people who don’t have health insurance and can’t pay for the care they need. Over the past five years, that percentage has fluctuated between 18 and 24 percent of adults between the ages of 19 and 64.

Providing healthcare to those without insurance is a major financial burden on doctors, clinics and hospitals. It drives up the cost of care for those with insurance as providers shift costs for care for those without insurance onto those with the deepest pockets — health insurance companies. Cost shifting adds an estimated $900 to the annual cost of premiums for each person insured.

The ACA will dramatically lower the number of people without either health insurance or Medicaid coverage. That will benefit providers who will have more paying customers. That will help those with health insurance as the need to shift costs onto those with coverage dissipates.

The act expands Medicaid eligibility to those earning up to 133 percent of the poverty level. The federal government will initially pick up the tab for the Medicaid expansion, and later it will cover 90 percent of the cost. Jindal claims the state will not be able to afford this cost whenever it arrives. He apparently believes state revenues will never increase again. Or, perhaps, he’s just philosophically opposed to people being able to access care without government assistance -- an odd position for someone who has worked in government for most of his adult life.

The Affordable Care Act is good for what ails Louisiana. Expanding access to affordable health insurance will improve the quality of life for our citizens and the financial viability of community hospitals and other providers. It will enable residents to afford the care they need in order to manage the chronic diseases that plague them and help children avoid those diseases or detect them while they are still manageable.

Governor Jindal needs to quit looking at this issue through the lens of his national ambitions. If he does that, he will quit fighting ACA and embrace the positive changes it will bring to our state.

Wall Street’s collapsing house of cards brought us a time of economic turmoil that most of us have not seen in our lifetimes. Patching the house of cards back together, though, will not bring us lasting recovery.

When will Washington realize that Main Street needs true financial reform and not just piecemeal crumbs dubbed as reform by Big Business and Wall Street? When will Washington realize it is small business that drives our nation’s economy – that without that entrepreneurial spirit, the wheels of our country’s economic system would no longer turn?

Had there been adequate rules in the past, there is a good chance the Great Recession would not have occurred, or at the least, have been less severe. This would have meant less pain for small business owners, with far fewer business failures, home foreclosures and job losses.

Small businesses didn’t have the luxury of being bailed out by the government as the big financial institutions did. While America waits for comprehensive reform, more families face home mortgage foreclosures, and more small businesses are unable to borrow money, crippled by self-serving Wall Street gamblers, who, enabled by bonuses and Washington bailouts, push aside anyone who gets in their way in order to satisfy their insatiable greed.

As a small business owner, I see the need for comprehensive financial reform that would bring about strong transparency, oversight and accountability to Wall Street. Most importantly, financial reform must include the establishment of a strong Consumer Financial Protection Agency (CFPA) with independent rule-making authority and enforcement powers -- not a branch of the Federal Reserve influenced by the Wall Street “fat cats,” whose total disregard for the needs of Main Street catapulted our economy into chaos in the first place.

Our local Chambers of Commerce claim to represent the needs of small business owners, when they in fact, are often under the umbrella of larger associations, such as the Louisiana Association of Business and Industry (LABI), who actually serve as mouthpieces for Big Business. It is these types of organizations across the country that aggressively fight to kill proposals aimed to create a new CFPA, deceptively claiming it to be in the best interests of their small business owner members – all the while knowing that a CFPA would help stabilize the economy, but being too afraid to stop protecting the Big Business interests who pad their pockets.

But we small business owners know the truth – the CFPA would provide protection against unfair “tricks and traps” lending. Small business owners -- who regularly rely on credit card financing and take out home equity lines of credit to get started or stay afloat -- would benefit enormously from these reforms and from the increased stability that would come from meaningful oversight of the credit markets.

Our elected officials should resist the efforts of Wall Street and other special interests to water down consumer protection through amendments that strip crucial power from states and attorneys general to enforce or enact consumer protection laws, and carve out special exemptions for auto dealers and other businesses. Business owners and consumers need full and fair disclosure of the costs and risks of ALL financial products, services and lending.

According to a recent Washington Post-ABC News poll, about two-thirds of Americans support tighter regulations on the way banks and other institutions conduct their business. Bipartisan support is especially high for greater federal oversight of the way banks and other financial companies that make consumer loans such as credit cards, auto loans and mortgages.

Most of the nation’s new jobs are created by small businesses, and effective financial reform will enable businesses to fill this role as they secure fair credit, hire new employees and build our communities and our economy.

It’s important that our elected officials act expediently on behalf of all small business owners. We can’t let our hard-working small business owners down by protecting the big banks and Wall Street. Instead, we need comprehensive financial reform that includes a Consumer Financial Protection Agency powerful enough to prevent the predatory lending that proved so catastrophic for our economy.
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Moran is the owner and CEO of Caramor Industries, LLC, in Natchitoches.
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