Viewpoint

Congress: Ship of Fools

From The Chief Medical Editor

Larry E. Patterson, MD

“When they aim at the big guy, they usually hit the little guy. And maybe it's time that stopped.”—President George H.W. Bush, 1992

I love boats. I love planes. And I love ophthalmology.

Back in 1990, when I could afford neither a boat nor a plane, the US Congress, in its infinite wisdom, eager to win class-warfare brownie points with their base, came up with what they thought was a brilliant plan. They said, “Let's add a 10% ‘luxury tax’ to all boats costing more than $100,000. That way we can soak the undeserving rich, and add revenues to projects we deem more important.” They were quite proud of this plan.

Problem was, it backfired. Congress misunderstood two things. “Luxury” implies you don't have to have it. It's a loaded word. Furthermore, they misunderstood the nature of wealthy folks. With the exception of inheritances, most rich people get that way because they work hard and are very smart, especially when it comes to their disposable income. So what happened? Rich people quit buying big boats. Billions of dollars of sales were lost. Blue-collar workers who manufactured the boats were laid off. Suppliers were crippled. Associated recreational industries and even unrelated businesses in boat manufacturing towns were affected. Tens of thousands of jobs were lost, and of course tax revenues went down. Congress got the message, and the tax was later repealed.

Fast forward to a couple of years ago, when the recession was in full swing. A sector hit especially hard was airplane manufacturing. So Congress passed a stimulus package to give tax relief in the form of accelerated depreciation to buyers of new corporate aircraft. And it worked! Your humble editor even took advantage of the deal: I bought my very first airplane. I not only enriched my newfound piloting experiences, but also helped save many jobs in the process.

The airplane tax relief wasn't intended to help rich people. It was meant to help keep a struggling industry that supports domestic manufacturing workers from going under—the exact same reason that the Detroit auto makers got a bailout. What's bizarre is that the same administration that twice pushed the airplane legislation as a jobs-saving bill has now decried it as a “tax break for the rich” in a recurrent class-warfare theme of “rich people make too much money and therefore should be punished.” Apparently if you use a private jet for business, you must be punished. Seriously?

Back to ophthalmology. As I write this, the debt ceiling crisis has not been resolved. While both parties are fighting over how much to cut and whether to raise taxes, doctors face a 29.5% cut in our Medicare payments come January 1. The SGR fix is estimated to cost $298 billion. How will it play out this year? Will rich doctors who “don't need all that money” be Congress's next target? Will they cut our incomes dramatically—and have the unintended effect of seniors losing access to care? What would you do if those cuts actually happened? If the same logic that was used regarding boats and planes is applied to doctors, I fear some might abandon ship.