Tuesday, November 23, 2004

Tort and Tax "Reform"

These are two GOP ideas whose time has come and gone. The proof is out and it isn't pretty, at least for Tort Reform.

A study was done for western states, looking at medical malpractice insurance costs and cross-tabbing that with states that had caps on "pain and suffering" damages. (see chart). Conclusion: in states with caps, insurers are more likely to charge premiums exceeding the national median than those in states without caps.

As you can see, states with caps still have pretty big increases in insurance cost.

As the Salt Lake Tribune noted
, "Even the nation's largest medical malpractice insurer, GE Medical Protective, admitted in a Texas regulatory filing that 'noneconomic damages are a small percentage of total losses paid,' and that capping them would save the company only 1 percent." And of course, such caps hurt only those who need the money to pay for their horrific injuries (because lawyers take a third of the damages in fees).

Now on to lame duck Governor Olene Walker's Tax Reform Package. Walker, according to the Salt Lake Tribune, "on Monday proposed eliminating corporate income taxes. To make up the difference, the state would begin taxing services - including everything from medical care to haircuts - and raising property tax rates. At the same time, every Utahn would pay a lower flat income tax of between 4 percent and 5 percent." Flat tax? Now that's a terrible idea. Walker wants to replace our regressive tax system with an even more regressive system. Flat taxes are always in vougue with Republicans but that's because they favor the rich who make up most of their campaign contributors.

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