Tax Analysts Blog

Who Should Pay for Healthcare Reform?

Posted on Jul 7, 2009

House members are considering a surtax on rich people to finance healthcare for the rest of us, according to Bloomberg's Ryan Donmoyer.

    The tax would be similar to, yet much smaller than, a surtax proposed in 2007 by Ways and Means Committee Chairman Charles Rangel, a person familiar with the committee’s talks said. That plan would have added at least a 4 percent levy on incomes exceeding $200,000, and was projected to reap as much as $832 billion over 10 years.

This is a good idea put to bad use. I have no issue with raising taxes on the rich: They got a good ride during the Bushes' years, and they're overdue for a hike. Raise rates, close loopholes, and add the money to the general revenue pot.

But financing a mass program with a class tax is not a good idea. It obscures the connection between taxes paid and benefits received -- a connection that's necessarily tenuous for many government programs, but not for healthcare. It also undermines the notion that taxes are the price we all pay for civilized society, not just the price that some other (rich) guy has to pay.

Asking the few to pick up the tab for the many implicitly devalues the service being provided. Worse, it devalues taxation itself, which should rest on the notion that some things - - like healthcare - - are actually worth paying for.

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