House Democrats Plan to Tax the Wealthy to Pay for Health Care Reform (NYT)

[jefferson_dem]

House Democrats Plan to Tax the Wealthy to Pay for Health Care Reform
By David M. Herszenhorn

To pay for a sweeping overhaul of the health care system, House Democrats will propose a surtax on individuals earning $280,000 and up and couples earning more than $400,000, the chairman of the tax-writing Ways and Means Committee said on Friday.

In all, the proposal is projected to generate roughly $550 billion over 10 years, which would cover about half of the estimated cost of the $1-trillion-plus health care legislation. The balance of the cost is expected to be covered by lower government spending on Medicare and other savings in the health care system.

But it remains unclear if the Senate would approve such an across-the-board income tax on the wealthy. Although some Democrats said they would gladly vote to tax the rich to pay for an improved health care system, most if not all Republicans and some centrist Democrats seem to be opposed.

The Ways and Means chairman, Representative Charles B. Rangel of New York, said the surcharge would begin at 1 percent and would step up for individuals earning more than $400,000 and couples earning more than $500,000, and step up yet again for individuals earning $800,000 and up, and couples earning more than $1 million.

Lawmakers were also planning to insert language that would increase the surtax in 2013 if expected cost-savings in the health care system do not materialize.

http://thecaucus.blogs.nytimes.com/2009/07/10/house-democrats-plan-to-tax-the-wealthy-to-pay-for-health-care-reform/?src=twt&twt=thecaucus

[Cleita]

1. Why don't they do it like the Canadians do it? None of the Canadians seem

to mind the way they pay taxes for their health care. I believe it's a combination of P/R tax and some use tax.

[rockymountaindem]

3. Canadians also have a high regressive sales tax

In Ontario, the VAT totals 15% on most items. I don't think we'd want that in the US (except for people like Sen. DeMint).

[Cleita]

7. Ed Schultz had an idea today perhaps also a bit regressive but interesting.

All the commerce and sales that happen over the internet are not being taxed. Not only that the internet sales websites are undermining the mom and pop stores who do have to pay sales tax. It sounds like an idea ripe for debate. He thinks that a tax on these internet sales could help fund a health system.

[Oregone]

8. The redistributive effect of Canadian health care spending is net progressive

Ive read that as much as 42% of the financing comes from the top quintile, compared to 2.5% from the lowest quintile, yet the lowest quintile uses 24% of the funding (compared to 15% among the highest quintile).

In America, you will see that private expenditure is static across the top four quintiles, and public spending is not large enough on the bottom 3 quintiles to make costs "affordable". The bottom 3 non-elderly quintiles still spend, out of pocket, 22%, 17% and 14% of their income (after subsidy) on health care respectively. The bottom 3 elderly spending, out of pocket, 34%, 36%, 21% of their income on health care respectively. The redistributive effect of public financing in the US results in unaffordable care (which is not the case in Canada, where all costs are paid).

In the US, the top quintile spend only 6% of their income out of pocket on health care, which makes it beyond affordable for them. In Canada, that number is drastically higher. The rich, who can afford to pay more, do, so that the poor do not have to pay so much of their income for health care.

Unfortunately, until the US starts looking at the distributive effects of public expenditure on health care, ALL their reforms will fail ultimately (public option included). Health care expenses are beyond the reaches of the average person. If the rich are not tapped proportionally to their income, half the country will never truly be able to afford it.

[rockymountaindem]

9. Interesting point

However, if the true redistributive effects of universal health care were discussed in this country, lots of people would just see that as another reason not to adopt it, sadly.

[Oregone]

10. Thats probably why its opposed in the first place

Probably only 5% of Americans would pay more than now (everyone else significantly less). But that small group makes laws and owns the networks

[quantass]

13. We Canadians LOVE our FREE Healthcare -- Higher taxes sure but its waaay worth it

I prefer Canadains healthcare were a bit better like other developed countries but it is definitely way better than the states.

btw, our "vat" is actually 13% here in Ontario.

[Aramchek]

2. as well they should

[AlecBGreen]

6. hi Aremchek!

welcome to DU! :hi: :toast: :party:

[Aramchek]

16. thanks for the beer!

:)

[Rosa Luxemburg]

4. Creation of wealth and distribution

We need a healthy and prosperous nation. A nation that has a preventative health system which empaphasises on primary care not the expensive secondary care.

[zbdent]

5. I've got it ... let's propose a tax increase on the amount of money CEOs make

over 200 times their lowest paid employee ...

[Colobo]

11. Whatever it takes to get it done, I'm for it.

[alcibiades_mystery]

12. Good

[quantass]

14. Nearly Impossible for USA to not join the club of civilized nations offering Universal Healthcare

it's just a matter of "when".

I just find it sad that these politicians can keep dilly-dallying for years thinking that it will just go away forever. America is going broke...something has to change.

[avaistheone1]

15. I think the time is NOW

for a zillion reasons. It must be done now. The Democrats are the only ones that can get it done.