July 7, 2010
To the Honorable Steve Ogden and members of the Texas Senate Finance Committee:
Thank you for your service to the state of Texas and her citizens. I commend the work that you are doing but am concerned that the charges before you today seem to set goals that would grow government, inserting the state into business and healthcare where it has no rightful place. Government’s job is to insure a fair and just set of laws to protect life, liberty and property. You are not the parent, the physician, or the corporate board of directors for Texans.
The charge to “Review the effect that Texas Business Tax credits…have on economic development in Texas” presupposes that government should be offering credits. Government is in no place and has no right to interfere in the free market, private businesses in Texas. It’s role is simply to insure that a set of laws exists protecting the free exercise of commerce within the state and restricting the violation of the rights of life, liberty and property. Citizens around our state have been vehement in our opposition to the federal bailouts. Our governor has relentlessly criticized federal bailout actions and rightfully so and yet the practice of creating credits and exemptions here in Texas continues and has the same deleterious effect.
Government interference in the markets distorts them and ultimately subsidizes failure. It is a well accepted fact, that subsidies (bailouts, tarrifs, monopoly privilege, credits, exemptions) only create more of what is being subsidized. What incentives will failing companies have to strive for profit through faithful service to their customers and for standing on their own feet? This is a question that haunts all protectionism and one government should ask often, “What incentives to strive for profit, if government provides subsidies for failure.” If the purpose is to make a firm or industry strong or able to compete in the market, you err since protecting it only makes it weaker. Government must be courageous enough to allow each company to compete in the “dog-eat-dog” competitive environment and through these pressures force it to improve and excel.
Bastiat’s famous dictum: “Government is the great fiction through which everybody endeavors to live at the expense of everybody else” seems appropriate today as you consider the charges before you. It is morally abusive to tax hard working Texans to subsidize (provide credits and exemptions) to others. Reject that temptation and repeal existing credits and exemptions. Establish a fair, transparent and just tax system without carve outs, subsidies and exemptions as they only seek to distort the market and cause poor allocation of the resources of labor and capital.
With regard to the charge to “Review the capacity of rural hospitals…,” the same counsel applies. The state is in no place to identify the infrastructure and health service needs of Texas. Texas healthcare industry is more than capable of addressing the needs of Texans and would be able to do so at a lower cost and with greater efficiency if both the federal and state government would cease their interference. Allow the market to dictate the healthcare needs of the state. Industrious, hard working Texans will respond in kind with new and innovative services as well as civic and volunteer service.
The state’s failure to defend her citizens and their businesses and intervene on their behalf when the federal government has forced unconstitutional mandates upon the healthcare industry i.e., EMTALA regulations has lead to hospital closures, increased healthcare costs and reduced access. Texas’ adoption of health insurance mandates has nearly tripled the cost of health insurance in Texas. It is this over-regulation that handicaps the industry and puts access to the greatest healthcare in the world out of reach of many hard working Texans.
Your attention would be much better focused on nullifying overreaching federal mandates and repealing state laws that impede the free market, including licensing and regulation which drive up the cost of healthcare while doing little to protect the consumer. Licensure laws create legal barriers to entry. When the government bestows legal status on a profession and passes a law against competitors, it creates unemployment. For example, who lobbies for the laws which prevent just anyone from giving a haircut? The haircutting industry—not to protect the consumer from bad haircuts, but to protect themselves against competition. The same is true in healthcare. Our licensing laws have driven up the cost of healthcare and resulted in the institutionalization of many of our elderly and frail who would undoubtedly be cared for in their homes or those of family members if state laws did not forbid the free market choice to employ whom they chose to meet their needs.
I encourage you today to re-evaluate the proper role of the state in meeting the needs of Texans. Insure that freedom is protected; that laws exist to insure that neither citizens nor businesses nor government violates the life, liberty or property of their neighbors. Provide for a fair and just tax system to fund very limited constitutional duties of the state and be courageous enough to let the private sector accomplish the rest.
Sincerely,
Debra Medina
Chairman
We Texans
