The Entrepreneurial Agenda

A bipartisan quartet of leading Congressmen and Senators has called on the IRS to stop collecting stiff penalties from small firms investing in illegal tax shelters, when those investments generated only "modest" tax benefits. The lawmakers say they hope to write new legislation that would ease the penalty schedule these small firms would face. The penalties stem from a 2004 law that requires companies and individuals to disclose on their tax return any tax shelters that the IRS has listed as abusive. For individuals, the penalty is $100,000, for corporations, it's $200,000.

Having concluded that free enterprise, such as it is, is under siege -- with the government seemingly ready to capitulate to "many union leaders, some environmentalists, and a growing force of anti-business activists" -- the U.S. Chamber of Commerce is gearing up for a multi-million dollar defense. "Dire economic circumstances have certainly justified some out-of-the-ordinary remedial actions by government," said Tom Donohue, the Chamber's president and CEO, in a statement. "But enough is enough. If we don’t stop the rapidly growing influence of government over private sector activity, we will squander America’s unmatched capacity to innovate and create a standard of living and free society that are the envy of the world."

McAllen, Texas, and El Paso have a lot in common. Both are poor, both are 80 percent Hispanic, and both metropolitan areas are home to just over 700,000 people. But they are separated by nearly 800 miles of blacktop, and by one other very important measure: McAllen is the second-most expensive city for medicine in the United States, trailing only Miami in costs. Medicare spent $15,000 per McAllen enrollee in 2006 -- $3,000 more than the average personal income there. In El Paso, by contrast, Medicare spends just $7,500, slightly less than the national average. These statistics come courtesy of Atul Gawande, a doctor and journalist, who explored McAllen's high cost of health care in last week's New Yorker. The explanation is surprisingly arbitrary. The difference appears to have little to do with either the patient populations or the quality of care, which are comparable in each city. Rather, the culprit is an "across-the-board overuse of medicine." A look at Medicare and private insurance data found that, "compared with patients in El Paso and nationwide, patients in McAllen got more of pretty much everything -- more diagnostic testing, more hospital treatment, more surgery, more home care." But more care does not equal better care. In fact, says Gawande, citing a couple studies, "where medicine is concerned, it may actually be worse."