IPI Ideas

Remember the old radio payola scam? Some states are doing the same thing with prescription drugs, telling drug manufacturers they must pay a "supplemental rebate" to get their drugs on the state’s Medicaid formulary. Supplemental rebates reduce the poor’s access to prescription drugs, hurting minorities most. Rebates are just one more way for politicians to extract money for government programs.

Education tax credits can open doors for parents and children who aren’t satisfied with their government school. But they work best when they’re flexible and free from excessive government regulation. President Bush can promote education freedom through tax policy, using federal tax breaks that reinforce state innovations like scholarship tax credits and tuition write-offs.

Social Security can be privatized and deliver market returns with virtually no risk to workers by allowing financial institutions to make asset allocation decisions rather than workers. Employees from three Texas counties have had such accounts for 20 years and have dramatically outperformed Social Security without risk. These plans can be a national model for Social Security reform without risk.

Several state organizations are promoting a new, "simplified" state sales tax system in order to tax e-commerce. While the current moratorium doesn’t prohibit states from collecting taxes within their own borders, it does prohibit them from creating new and discriminatory taxes. The Founding Fathers wanted states to compete against each other, even in taxation. Extending or making the current moratorium permanent would coincide with the Founders’ principles of federalism.

Major current political criticisms of the pharmaceutical industry are answered, such as direct-to-consumer advertising, "obscene" profit margins, patent protection, etc.

President Bush's prescription drug proposal, properly done, would provide prescription drug coverage for those most in need without creating a new entitlement that could bankrupt Medicare. This IPI Idea proposes a modification to the catastrophic portion of President Bush's proposal.