By Porter Stansberry in the S&A Digest:

Congressional Democrats proposed new health care legislation yesterday that would penalize all but the smallest businesses up to 8% of payroll if they failed to provide "health insurance" for every employee. (I've put "health insurance" in quotes because this program has nothing to do with actuarial risks or long-term investing. "Health insurance" as it works today is nothing more than a payment plan for health care.)

The fees on businesses would be used to pay for health care for the poor. Additionally, the Dems proposed a 5.4% "surtax" on individuals with incomes of more than $1 million.

This legislation is dangerous. It directly links a crucial benefit (health care) for millions of people to the wallets of business owners and wealthy people. This legislation is simply legalized plunder. It's using the power of government to steal from Peter to pay Paul.

While that's not new in America, the idea of doing so directly and for health care is particularly dangerous. There's no economic limit to how much health care can be consumed, because there's no real price system or a free market in health care. So as long as someone else is forced to pay for it, demand for health care will soar.

Finally, adding yet another tax to the top wage earners in America raises the question of how long the rich will go along. With the top federal rate at 39% and state income taxes averaging around 5%, this surtax would put wealthy taxpayers at the 50% mark. How hard would you work, and for how long, if half your wages were going to pay for a bankrupt government's entitlement programs? And what will happen when the rich try to stop paying or try to leave? What will happen when thousands of businesses simply shut down or fire most of their workers to avoid these taxes? Get your gold out now is my advice.

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