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Medicine, money and madness

Dave Gordon - Friday, 29 June, 2012

Could the secret to creating a better Canadian health system be higher taxes for the wealthy?

A bunch of well-meaning doctors recently proposed this very thing.

Calling themselves Doctors for Fair Taxation, the 50 doctors reckon that the health system would show marked improvement if those Canadians who made more than $100,000 would be taxed more – and by doing so, the health care system might raise some $5 billion.

Bandying about words like “equal”, “fair” and “moral” to describe the initiative in a Postmedia interview, proponents say that what the health system really needs is a huge governmental financial boost.

It’s a sweet sentiment. But from a logic standpoint, foolish.

Reason 1 why this idea is foolhardy: Those who are vaguely familiar with how government works will tell you that money management is never the strongest suit of political bureaucracy.

Governments are better at spending money, than making it. Tax money, as a rule, gets thrown into a pot. From there, it gets spent every which way, often for pet projects of the ruling party. Unless a government has a solid track record of curbing waste – which I have yet to see – chances are that earned tax money will eventually be squandered.

To prevent just a travesty, these doctors could just as easily begin a private foundation that directly benefits hospitals in need. And to prove how serious they are, they should put their own money where their mouths are instead of demanding others empty their wallets.

Reason 2 why this idea is foolhardy:

Brain drain cometh if doctors aren’t paid enough, and that applies equally if they are taxed too much. The very people who are needed to sustain the health system – doctors – could flee to another province, or south of the border, if, in addition to their malpractice insurance, their taxes increase.

Reason 3 why this idea is foolhardy:

As the famous Laffer curve shows, the higher the taxes, the less people spend. Studies have shown that states with the highest taxes are states that give less to charity. That means less giving to hospitals - who might lose on this one in the long run.

Unfortunately, Doctors for Fair Taxation seem to believe that giving to the government is just like giving to charity. Indeed, government, for them, is the trusted centralized do-gooder where the world’s wrongs are set right, where there is no waste, and pure motivations reign. Almost no government that has ever existed has fit this description.

Reason 4 why this idea is foolhardy:

If these doctors firmly believe that more money into the health system will save lives, they’ll need to look no further than a recent study that showed $100 billion more was invested into the system – resulting in zero increase in quality.

In light of these facts, this would be an opportune time to advocate cracking down on government mismanagement, overspending, abuse of the system, and developing more accountability.

That way, perhaps the next $100 billion spent could benefit the health care system – and tax money wouldn’t be wasted.


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