Community | July 13, 2009 | 4 comments

Taxing the Rich: The (Politically) Smart Way to Pay for Health Care

source: http://www.fivethirtyeight.com/2009/07/taxing-rich-politically-smart-way-to.html

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atomiclegion

http://www.fivethirtyeight.com/2009/07/taxing-rich-politically-smart-...

The big news on the health care front this weekend is that House Democrats are prepared to call for a tax increase on the highest-earning Americans in order to pay for expanded health insurance. Although accounts of the exact details differ slightly, it appears that the tax hike would take the form of a "surcharge" of 1 percent on incomes from $280,000 to $400,000, 1.5 percent on incomes of $400,000 to $800,000 and 3 percent on incomes of $800,000 and above. This means that someone making $500,000 would pay about an extra $2,700 in taxes each year, and someone making $1,000,000 would pay an extra $13,200. The burden, in other words, would fall disproportionately on those who earn not just in the six figures, but rather in the seven figures, for whom much more of their income would become subject to the 3 percent rate.

I applaud the House for recognizing that the world doesn't end at $250,000 or $357,700 (the beginning of the top marginal income tax bracket as of last year). Throughout most of American history before Reagan, the top tax bracket kicked in at figures much higher than $357,700 in today's income: the equivalent of about $75 million in today's dollars, for example, during portions of FDR's presidency.

I also think the House has probably found the path of least resistance in terms of marshaling public support for financing health care. In June, the Kaiser Health Tracking Poll asked Americans about seven different mechanisms to pay for health care. The one solution that Kaiser missed was that of a national sales tax, so for that I use data from Rasmussen Reports instead, who ran a May poll indicating that 40 percent of Americans would support a national sales tax if it paid for health insurance. Increasing taxes on incomes of $250,000+ was supported by 68 percent of Americans in the Kaiser poll, tying it with increased cigarette and booze taxes for the most popular option:
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4 comments // Taxing the Rich: The (Politically) Smart Way to Pay for Health Care

  • JonRaymond
    • 0
      JonRaymond  
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    • Listen to what real people say. Single payer is a much better option than the current proposal which will require all Americans to pay for health care from an insurance provider or be penalized with a health tax. All Americans, not just the rich. This will adversely impact those who now can't afford insurance. it will makes things worse, not better and it will pay off insurance companies with mandated membership from the poorest people. Look at the fine print before you buy this crap.

      http://www.huffingtonpost.com/2009/07/14/health-care-bill-released_n_232206.html

    • 3 years ago
  • metalcookiesxy70
  • Paratus
    • 0
      Paratus  

    • "I also think the House has probably found the path of least resistance in terms of marshaling public support for financing health care"

      I think you are probably correct. When you rape the few to pay for the many you can always count on the support of the many. I'm still looking for the Constitutional authority to do this. It isn't in my copy. I DO NOT support tax increases at all. for ANYTHING. We need less government. We need a government more concerned with the people and their freedoms than increasing the power of the central government.

    • 3 years ago
  • afitzgerald
    • 0
      afitzgerald  

    • It's interesting to watch how few things are politically viable these days to raise money to finance healthcare (or anything for that matter). Even the option, voiced by the Obama administration, of partially funding additional healthcare expense with proceeds from selling cap and trade permits expired in Congress.

      As we're following this story in California about the state's inability to balance the budget I find myself wondering if there's a point where the public starts to support tax increases across the board?

    • 3 years ago
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