Hallelujah. Finally someone in Congress has the courage to propose a reasonable tax on the wealthy to help improve our nation's broken health care system.
Last Friday members of the House Ways and Means Committee released a plan to introduce a graduated surcharge with stepped up rates from 1-3 percent on household incomes over $350,000 (or $280,000 for an individual) to help finance health care reform.
The proposed surcharge is wholly appropriate. For one thing, it would impact those with the greatest capacity to pay it, about 1 out of 100 taxpayers. It would raise $540-550 billion over 10 years with no impact on poor and middle class households, according to a report just released by Citizens for Tax Justice.
More importantly, plenty of people who would pay the tax recognize its importance and support it.
Right now, Wealth for the Common Good, an organization that I helped co-found, is bringing together high net worth individuals who want to promote pragmatic and progressive tax reform. They include the top CEO's in the nation as well as the small business owners that are helping their neighborhoods grow. They are leading a campaign calling for the immediate repeal of the Bush-era tax cuts, urging the President and Congress to act now, as the economic crisis deepens, before those cuts expire on January 1, 2011. They view paying more, and investing in their country, as a civic duty -- a belief shared by nearly a thousand others who have already signed Wealth for the Common Good's petition.
During the Bush years, households with incomes over $250,000 pocketed more than $700 billion in tax cuts. During that period, from 2001 to 2007, bankruptcies caused by medical problems leaped from over 46% to over 62%, according to research by Physicians for a National Health Program. By reversing Bush-era tax policies now, we could generate $43 billion annually in federal revenue, which would pay not only for critical investments in health care, but education, infrastructure and green energy systems as well.
Part of rebalancing the tax code and ensuring that all Americans share in the sacrifices of the current economy is to restore taxes on the very wealthy.
The alternatives are unacceptable. One is to do nothing and keep an inadequate health care system. Another is to pass health care reform legislation that doesn't expand coverage to include the 50 million who lack health insurance. Yet another option is to impose a tax on employer-provided health care benefits. The vast majority of Americans have voiced opposition to each.
A recent Washington Post/ABC News poll found that 70 percent of respondents opposed that. And they should: it would clobber working families during the worst economic downturn since the Great Depression.
Roger Hickey wrote in The New York Times that "160 million of us get our health insurance from employers. And in these difficult times, millions of workers have repeatedly given up wage increases in order to keep their health benefits."
Meanwhile, a poll by CBS News and the New York Times found that 74 percent of respondents approved raising federal income taxes on those making more than $250,000 to pay for health reform.
Congress will tussle over the various mechanisms to cover the President's health agenda.
Yes, we need to contain costs and wring more savings out of the existing system -- reducing the costs of prescription drugs and long-term care would be a good start. But part of how we cover the cost of transitioning to a new system also needs to begin with a tax surcharge on those of us who disproportionately benefited from the boom economy of the last decade.
"The bottom line is, it's got to be paid for," as Health and Human Services Secretary Kathleen Sebelius told CNN this weekend. "And we all have a shared responsibility that we all need to play a role."
Increasing taxes on those of us at the top should not only be part of the solution, but is the fair and right thing to do. What we're hearing now from the House Ways and Means Committee is truly the meaning of progressive tax reform. Public sentiment and the response we've seen to Wealth for the Common Good both support that.
Chuck Collins is co-founder of Wealth for the Common Good and the great grandson of meatpacker Oscar Mayer. He is a senior scholar at the Institute for Policy Studies.
"$50 million would easily buy 4000 families a year's worth of insurance (at %12,000/year). That's over 400 families each trading day!"
That should be 4 THOUSAND families each trading day...
For each and every share over $5.00 traded on all boards collect 2 1/2 cents from the seller and 2 1/2 cents from the buyer.
For every commodity traded over $5.00/unit, collect 2 1/2 cents each from the buyer and seller.
The NASDAQ and NYSE trade something like 1 billion shares daily. A nickle apiece would generate a cool $50 million daily just from those two exchanges. After a short while, you're talking about real money...
$50 million would easily buy 4000 families a year's worth of insurance (at %12,000/year). That's over 400 families each trading day!
But I guess a nickle a share would drive the market into the gutter.
Just a thought...
The Republican fraud of "trickle down economics" or "voodoo economics" allowed the wealthy to become richer and the middle class to become poor.
The loop hole of off shore bank accounts should be outlawed and the Wall St. Barons of greed should be sentenced to jail time. Shipping jobs overseas for greater profit while people here can't find work is shameful and should have greater penalties imposed on American owned corporations or foreign corporations who take advantage of the tax structure.
There should be greater taxes for large corporations, cuts in taxes for small businesses. Higher taxes should be imposed on luxury items, higher taxes on junk food and drinks/liquor, fast foods and some small tax for gas consumption to pay for high speed rail. Taxes should be eliminated for food purchased for certain economically stressed people.
I think the American people, in order to get a strong public option health reform, would support any of these taxes.
Also it is very important to keep in mind that we are but one country in the a competing world market. If I have a company in the U.S. that employes 100 Americans and I pay 35% (corporate tax rate) on the income from the corporation then pay 39.6% (Obama's highest individual tax rate) more plus this surcharge, plus whatever other additional taxes will be raises, plus whatever by state income tax is (California's highest rate being over 10%), by the time the money comes back to me that vast vast majority is paid to the government. Conversely, I could simply open a factory in Ireland, fire everyone in the U.S. (bye bye 100 jobs), and pay less than one-half the amount in corporate taxes. Then I could legally expadriate to the EU and again my personal tax rate would fall nearly in half in selected countries. Or better yet I could expadriate to the Cayman Islands (this is perfectly legal) and pay nothing in personal income tax.
Be careful as raising taxes rates often leads to lower tax revenue.
And in the case of the Reagan tax cuts, we STILL aren't bringing in as much money as we were before his sleight of hand!
These people are all hypocrits. If they want to pay higher taxes nothing is stopping them from doing that right now. The IRS gladley accepts voluntary contributions from those people wishing to pay more than curently required. I want to see the people in this group, Wealth for the Common Good, pony up this year for all the extra taxes on a voluntary basis. I'm sure they won't.
In other words, there goal isn't to be taxes more, there goal is to make sure that everyone else who makes a certain amount of income pays under the full weight, authority, and threat of fine and/or imprisonment for failure to pay.
http://graphics8.nytimes.com/images/2009/07/15/us/politics/15health_graph.jpg
So...yeah, if I make 500,000k (after deductions) and pay an extra 1.5k, everybody gets care, my costs for care go down (even a little) then I'd consider it a win.
At 1mm (after deductions) 9k isn't so terrible.
I'm in at those rates. Provided that we have a public option, everybody gets health care and some of the gouging stops.
Those of you who are ganging up on the Americans who have worked hard, started businesses that employ Americans, you will live to regret that attutitude.
Started businesses that employ Americans? Are you kidding? Have you looked at the statistics on offshoring? I really wonder how many of the wealthy really did start businesses that employ Americans and how many are collecting dividend checks, doing nothing or worse sucking the blood out of the American economy. If the revelations of the past two years are any indicator, there are far more of the latter than of those generating real wealth.
Finally, perhaps you also didn't read the part about high net worth individuals, CEOs, and small businesses supporting the Wealth for the Common Good. It would seem that some rich people are a) patriots and b) recognize that the increasing economic polarization of American society is not sustainable.
GoldmanSachs, JPMorgan, Royal Bank of Scotland, Wells Fargo, Citibank, Bank of America (and Merril Lynch), AIG, Deutch Bank, etc, etc, etc. The money went from our pockets to the hyperwealthy financial center. Don't you think it's time they gave some back?
Big waste of government money I guess we should cut them loose?
(Texas being an exception)
There is a solution. You should look into the Fair Tax. The current system is so fraught with cheating and suspicion of fraud on every level that it's eroded our faith in the tax system, sadly. The Fair Tax is a marvelous way to keep the system open and transparent and "pay as you go". You can rest assured that there are many accountants at the IRS who are dead set against it, cuz ..well, cuz it's not fair to tax accountants. Cheers
"Wealthy" people get a lot of their money from investments that provide cash in capital gains which makes their tax rate a pittance.
"High income" people aspire to get to that point but lose almost half of everything they make (at least in NY we do).
One aspires to get from the latter to the former, but to me it's the former that are really taking us all for a ride.
Might be a good idea to index the old Reagan tax cut levels for inflation though,.... before we enact them.
By taking wealth AWAY from rich people they will have to invest MORE of what is left to make back what was taken away. Those investments will drive the unemployment rate down and create the private capital intensive (as oppossed to government spending) economy capitalists crave.
In fact, I'm of the firm opinion that we need to GUT our military, bring it back to pre-World War 2 levels, which would allow us at that point to provide single payer universal health insurance to every man, woman, and child in the country. Add in the removal of the raygun tax cuts, and we could also pay off the debt, and fix our infrastructure in a very short period of time!
5.4% surchage is a steep increase. Maybe your buddies can just pay more so the ones on the hook that are against it get some relief.