To achieve anything that resembles meaningful health care reform, activists are realizing, we need to focus on the grand concentrations of wealth inside the health care industry — and beyond.
By Sam Pizzigati
Later this month, in both the House and the Senate, lawmakers will likely begin “marking up” legislation that might finally give all Americans what the citizens of every other developed nation in the world already have: access to affordable health insurance.
How will lawmakers foot the bill?
“We’ll pay for it,” Senate Finance Committee chairman Max Baucus, a Democrat from Montana, promised [1] last week, “in a balanced way.”
[2]What does that mean? Baucus, a key figure in the congressional health care deliberations, appears willing to “balance” the burden of financing health care on the backs of average Americans who already have health insurance.
Health insurance benefits don’t currently count as taxable income. Baucus two weeks ago included taxing health benefits on a list of “policy options” for financing reform he released [3] with his Republican colleague, Chuck Grassley.
Also included in the Baucus funding option list: an assortment of other proposals that aim directly at the pockets of ordinary people. His committee is even considering [4] expanding federal payroll taxes to college students in work-study programs.
Curiously missing from this “balanced” approach to bankrolling health care reform: any move to tax the individuals and corporations that have profited so lavishly from our dysfunctional health care status quo.
This week the pushback — against the Baucus “balance” blinkers — begins. A coalition [5] of health care reform-minded labor, religious, and community groups will be meeting this Wednesday in Washington to lay the groundwork for a tax-the-rich offensive.
Congress could take a giant step toward funding health care reform, notes the new Citizens for Tax Justice analysis undergirding the offensive, by “eliminating or reducing several subsidies and preferences provided in the federal tax code to the wealthiest and most powerful among us.”
This Citizens for Tax Justice “revenue options [2]” paper aims to restore the “balance” so egregiously missing in the Senate Finance Committee options list.
Average Americans, the paper points out, have just provided “Wall Street (and thus the richest people in America) the biggest taxpayer-funded bailout in history.” Congress, the analysis continues, now ought to cut a deal. Main Street, after all, “is paying to make Wall Street healthy.” Wall Street, to help finance health care for all, should “return the favor.”
Citizens for Tax Justice is proposing a host of tax-the-rich ideas various lawmakers have advanced over recent years: ending preferential accounting treatment for executive stock options, closing offshore tax loopholes, repealing tax breaks for hedge fund managers. But the group is also advancing some proposals that haven’t received much attention in the past.
The most potentially lucrative of these: Subject the rich to the Medicare tax.
This Medicare tax currently only applies to payroll income. If you work for wages or salary, you pay this Medicare levy. If you get your income from investments, you don’t.
One Citizens for Tax Justice proposal to end this inequity would apply the 1.45 percent Medicare tax that currently applies only to paychecks to all income. Another would tax paycheck income over $250,000 on joint returns to a higher than 1.45 percent tax rate.
Still another option — that Citizens for Tax Justice gives a special spotlight — would combine these two approaches but exempt senior citizen couples from paying any additional Medicare tax on their first $100,000 of income.
This combined proposal would raise $44.7 billion in 2012, a major chunk of the $106.8 billion the total Citizens for Tax Justice package would collect — without taking any appreciable dollars out of the pockets of families in the bottom 90 percent of the U.S. income distribution.
In fact, of the $106.8 billion the Citizens for Tax Justice plan would raise, 91.8 percent would come from households in the top 10 percent, with 78.4 percent from the top 1 percent alone.
The Citizen for Tax Justice proposals, in total, would bring in more than $1 trillion over a decade — and simply the tax code to boot. Will that be enough to get the attention of Senator Baucus and his colleagues? Only if the rest of us insist.
Sam Pizzigati edits Too Much [6], the online weekly on excess and inequality.