If you can believe the news, the Obama administration will soon start to press for health care reform. The president wants a mandate that all Americans be covered. The trick is how to pay for all of this. Obama enjoys 60-plus percent approval ratings, but his approval rating slips to 45 percent on controlling federal spending, 51 percent disapprove (Gallup). So adding an extra $1 trillion or so over 10 years to already record deficits is going to be a tough sell this summer and fall.
A couple of ideas are floating on how to finance this. The Washington Post recently published an article on politicians opining that maybe it’s time to finance health care via a national sales tax, or a value-added tax (VAT). A VAT is a tax on products during production that is passed on to consumers. In Europe, the VAT is around 25 percent. That would hike everyone’s prices — poor and rich — so it’s very regressive. Here’s a quote from Democratic pol Sen. Kent Conrad, N.D.: “I think a VAT and a high-end income tax have got to be on the table.”
I recall a talk radio jingle from the Clinton health care wars (Rush?) “And you’ll be on welfare, but hey you’ll have health care …” Somehow, it just doesn’t seem like a national sales tax — on top of other taxes — has any chance of success in Congress. But here’s a link to the Post article: http://www.washingtonpost.com
Another idea to fund health care reform is by taxing current tax-free employer-provided health benefits. Again, this would be regressive if all plans were taxed, but, according to Fox News, one Democratic pol, Sen. Max Baucus, Mont., wants to at least tax health benefits from wealthier Americans. You can read the story here: http://www.foxnews.com
The main problem Obama has with this tax strategy is it makes him look like a big hypocrite. In last year’s presidential campaign, Republican candidate Sen. John McCain, Ariz., proposed such a tax and Obama spent millions of dollars in television ads attacking McCain for suggesting the tax. Granted, it’s no big shock for a pol — even Obama — to change his mind, but he’ll eat a lot of crow from Republicans, and the public, if he does just that.
It’s going to be a great, fascinating debate over health care reform the next few months. Keep your ears and eyes tuned to it … and watch your wallet.
Sebron
on Jun 9th, 2009
@ 4:13 pm:
Doug,
it is obvious that you don’t like Obama. I actually like him. I do agree that possibly a united health plan is a bad idea. I think we live a sociaty where we have to much governmental involvement.
Benjamin Franklyn, Thomas Jefferson and John Adams all believed that government should be here to help and to serve the people. Ben Franklyn believed that polititions should not be paid.
Why then do we have a country where the government is so involved in our lives.
If we have a centralized health care plan, it will just become another Social Security system. The government will just missuse it until there is nothing left and we will have another debt.
We need to have polititians who care more about the people than they care about themselves.
Neal Humphrey
on Jun 9th, 2009
@ 5:37 pm:
I’ve only had one opportunity to sue for malpractice. But the improper and unnecessary surgery occurred in a European country with socialized medicine, so I had no recourse against incompetent doctors. The bright side, it didn’t cost me a dime (shilling, actually), just pain and time lost.
Cathy
on Jun 10th, 2009
@ 8:22 am:
Here’s a thought on how to pay for health care… how about eliminating or reducing some certain government subsidies on commodities that are making us sick anyway. Start with the $20 million that taxpayers give to the tobacco industry (that one should be a no-brainer). If Americans could reduce their meat consumption by half, we’d have another roughly $1,000 million from feed grain crop (and corn/high fructose corn syrup) subsidies to put in the pot… ditto dairy, that would free up another $100 million or so AND we’d have a lower incidence of obesity, diabetes, heart disease, and certain cancers too. AND we’d have less environmental pollution, a decreased threat of antibiotic resistance and fewer novel flu virii. The current H1N1 flu strain was first found 10 years ago on an industrial hog operation in Iowa.
However the government decides to fund health care, it is clear that they will need to incentivize healthier lifestyles and clean up the environment, or the cost of funding our food-related illnesses alone, will eat us up (pun intended)!! I predict a similar battle with corporate food production as we saw with the tobacco industry. The option of self-inflicted disease by over-consumption of the wrong foods is about to become everyone’s business. That is really the only drawback I see to social medicine, but even as it stands, it is actually the poorest people who have the least access to healthy food – so we are already paying for their healthcare, and it isn’t working too well for anyone.