What I don’t understand about politicians and their tax talk

House Republicans have inserted a last-minute provision into the Republican healthcare bill, as part of an effort to woo more votes from upstate New York representatives.

The provision would deny matching federal aid to the state of New York if it did not shift the the burden of Medicaid from New York counties to the state government.

Here’s the bit I don’t get:

But William Cherry, the Schoharie County treasurer, said upstate counties would be able to make a significant reduction to their property taxes if they did not have to shoulder part of the cost of the state’s Medicaid program.

“This would be a huge step and a great benefit to taxpayers,” said Mr. Cherry, a Republican who is president of the New York State Association of Counties.

It’s not for me to comment upon New York policies, because I don’t live in New York, don’t pay taxes to the state of New York, and have no ties with the state.

But my point: government is government. Yes, there may be different layers of government, from local, to county, to state, to federal, to international (hello, EU), but it’s ultimately all government.

And governments of any kind have basically two ways of raising revenue: taxes and borrowing. And as a nation, we’re supposed to hate government borrowing.

William Cherry, the county treasurer mentioned in The New York Times article, argues that upstate counties can make a “significant reduction to their property taxes,” by eliminating Medicaid costs from county budgets.

Notwithstanding that the majority of the county property tax burden goes to paying for schools, not Medicaid, there’s another point I’d like to make: shifting the burden from counties to the state doesn’t reduce those costs, it just moves them to another balance sheet.

At the end of the day, the state government is going to have to pay for all the costs previously borne by the county government, and the state is going to have to get the money somewhere. If the money doesn’t come from county taxes, then it’s very likely going to come from state taxes, unless the state does something else: like drastically cutting back on spending for Medicaid.

Shifting costs from the county level to the state level does nothing for taxpayers. It’s merely another example of how the system of government we’ve set up is designed against taxpayers’ interests.

If politicians really cared about taxpayers (let alone citizens), then they wouldn’t be fighting about who should pay for what, but instead trying to work out what’s the best way to bring the best possible public services at the lowest cost to the taxpayer.