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Higher Taxes? For Whom and for What?
It was inevitable that Congress would float a tax proposal once they recovered from the sticker shock of health reform. Taxing the wealthy seems appealing. Why shouldn't the well-to-do help less fortunate citizens afford health care coverage? After all, other countries like Great Britain and Canada have higher taxes to cover such benefits.
This simple approach is more complex than it seems.
1. If we increase taxes--who will actually pay?
Our tax code is designed around net income rather than gross income. The very rich routinely structure their income to avoid taxation. If we increase taxes for "the rich," I suspect very few of these folks will pay much more.
2. As we bail the government out of its stimulus debt, how much taxation will the public endure?
Our federal liabilities are substantial -- two expensive wars and the recession recovery with its stimulus and bailout packages. These are intimidating obligations, not to mention Medicare, our national health-care entitlement. Faced with these realities, will the average taxpayer tolerate even more taxation to cover the uninsured?
3. Without a national health system, will we be throwing tax money into a black hole?
Before taxpayers dig deeper, they will want to know what they are paying for. Unlike Canada and other western nations, we have no organized national health-care system. Given that vacuum, where will these tax dollars go? Are they to build a durable health system or just pay for more escalating health-care costs?
Before they raise taxes, Congress and the administration must have good answers to these questions. Otherwise, angry taxpayers will make their feelings known in the 2010 elections.
By
Mark Kelley
|
July 13, 2009; 10:33 PM ET
| Category:
Health Care Reform
,
Taxes
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Posted by: johnhauck | July 17, 2009 9:31 AM
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Thanks for the comments. Our effective tax rate is lower than some countries because our tax laws are based on net income. True universal health care requires a reliable, equitable payment system that charges higher premiums for those who can afford them. If based on taxes, this revenue stream would require Congress closing many tax loopholes for the wealthy.
Now that would be REAL reform !!
Posted by: Mark Kelley | July 15, 2009 7:12 PM
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Excellent points about the net effect of taxation, Dr. Kelley.
It seems, however, that you are engaged in an argument two or three steps beyond our Congress...they're still fighting over whether the wealthiest people in the wealthiest nation on earth should deign to pay their fair share.
Your point about the need for a national health care system is well-taken...and I hope it gets more traction. Seeing Congress stuck in this twenty-five-year-old stale Reaganomics debate is incredibly frustrating.
Posted by: Angela Glover Blackwell | July 14, 2009 2:55 PM
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I strongly agree with 3., but not with 1. and 2.
If 1. is correct, the right thing to do is to close the loopholes.
As for 2. the US whose overall tax rate is26.4% is among the lowest in the industrialized world. Sweden's tax rate is 50.2%, Spain's is 35.6%. BTW both of these countries have higher growth (per capita GDP) rates than the US.
Posted by: lensch | July 14, 2009 11:14 AM
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The comments to this entry are closed.
Everyone seems to be talking about how much this program is going to cost, yet, there is NO program. If everyone is covered by some sort of health plan, national or private, then why do we need Medicaid/Medicare?
After all, we are already being taxed for these programs, and this money could be used to help pay for whatever it is that Congress deems we need.