Tax the wealthy, keep everyone healthy
TEXT OF COMMENTARY
Kai Ryssdal: President Obama took to the bully pulpit today. He gave Congress a pat on the back for the work it's done so far on health care. Then he pushed lawmakers to hustle and get a final bill done before the August recess. Whatever it does wind up looking like, health care reform will come at a high initial cost. The plan the House released yesterday tops a trillion dollars. To help pay for comprehensive coverage, House Democrats want to raise taxes on the wealthy. Commentator Robert Reich says that's a small price to pay.
ROBERT REICH: It's the most blatant form of Robin Hood economics ever proposed. The House of Representatives' universal health care bill, announced yesterday, pays for the health insurance of the poorest 20 percent of Americans who need help affording it with a tax surcharge on the richest 1 percent.
I don't remember a redistribution this direct ever coming out of Congress. I mean, occasionally Congress closes a few tax loopholes at the top and offers a refundable tax credit to people near the bottom. Or creates a poor people's program like Medicaid, paid for out of general revenues from a progressive income tax. But to say out loud that those in our society who can most easily afford it should pay for health insurance of those who cannot is, well, audacious.
There's another word for it: fair. According to the most recent data, the richest 1 percent of American households now take home about 20 percent of total income, the highest percentage since 1928. Now, yes, I know, critics will charge that these are the very people who invest, innovate, and hire, and thereby keep the economy going. So raising their taxes will burden the economy and thereby hurt everyone, including those who are supposed to be helped.
But there's no reason to suppose that taking a tiny sliver of the incomes of the top 1 percent will reduce all that much of their ardor to invest, innovate and hire in the future. Yet if this tiny sliver means affordable health care for a far larger number of Americans, they'll be able to get regular checkups and thereby stay healthy and productive. And a more healthy and productive workforce will do far more to build the American economy.
One other virtue of this funding mechanism is its simplicity. A surtax is simple to administer. And the whole idea is easily understood. Tax the very wealthy to keep everyone healthy. Not even a bad bumper sticker.
RYSSDAL: Robert Reich is a professor of public policy at the University of California, Berkeley.