Thursday, October 15, 2009

How to Pay for Health Care Reform

by Pa Rock
Citizen Journalist

Despite the moaning and wailing from conservative Americans whenever the subject of taxes comes up, the honest truth is that America was built and is maintained on taxes. Taxes fund the things that society demands - national defense, roads, prisons, schools, hospitals, police and fire protection, and every other thing that cannot reasonably be funded by individuals. There are various types of taxes available to keep the country functioning including corporate income taxes, personal income taxes, property taxes, inheritance taxes, and sales taxes.

Of all of America's taxing options, sales taxes are regressive and easily the most unfair. By regressive I mean that the poor spend a far greater percentage of their income on sales tax than do their rich counterparts. Gladys, who works two minimum wage jobs to feed her family, might bring home $500 in a week - if she gets lucky and pulls down some overtime - but she will spend forty or fifty percent of that on groceries - which are still taxed in most states. In fact, almost all of her salary gets spent on something, most of which is subject to sales tax. Poor Gladys doesn't get the opportunity to save much.

Ronald A. Williams, the President of Aetna Insurance, has to get by on $63,139.27 per day. Ron eats considerably better than Gladys, but where she spends forty to fifty percent of her salary on food, Ron can eat quite well on far less than one percent of his income - thank you very much! So, yeah Ron Williams will pay more in sales taxes than the poor folks that he lives off of, but much of his income goes into the bank or tax free investments, and is not subject to sales tax. Sales tax is a tax on the poor, and that is why it is so popular with Republican politicians and the rich.

But there is one big advantage to sales taxes - they can, when properly applied, change behavior. You have seen the commercial, no doubt, where the rough looking mom is bitching about Congress wanting to tax sodas and "fruit" drinks. She claims that taxing things doesn't change behavior, education does. Wrong. If you don't think taxes can't change behavior, just ask the cigarette industry. Smoking in America has dropped markedly over the past few decades - due to taxes. I quit in 1974 when the price rose to fifty cents per pack - because I could no longer afford to set aside that much money for a vice. Today smokes are in the neighborhood of $6.00 a pack!

Don't tell me that people have quit smoking for health reasons. I might believe that, but they are still lining up at the trough for Big Macs and Whoppers! People have quit smoking because of price!

So, as much as I hate sales taxes, they do represent a good way to pay for national health care and they could also serve to make us a healthier nation. It's simple: put targeted sales taxes on things that hurt our health. Put a "value added" tax on fast food, Twinkies and Ding Dongs, sodas and "fruit" drinks, candy, raw sugar, white bread, potato chips, tanning beds, cigarettes, alcohol, and, of course, guns and ammo. Tax that stuff to the point that it begins to change our behavior. We will be healthier as a country, and have the security of knowing that a catastrophic injury or illness will no longer be able to wipe out our savings and property.

Come on Congress, grow a set!

1 comment:

Tim said...

Along the lines of the unfairness of a blanket sales tax on things like groceries... what about speeding tickets? Is it fair that Gladys pay 150 bucks out of her paycheck if she's caught on the radar and the rich guy get the exact same fine? Isn't the point to deter the speeder in question? Gladys may be deterred having lost about thirty percent of her weekly wages but the wealthy scofflaw's bank account covers that loss in interest before the check to the city clears. I think fines like these should be percentages of income. I don't know... maybe half a percent of the number on Gladys' W-2 from last year... and half a percent of rich guy's gross total earnings of the year before--now that might be an adequate deterrent for both. I chose the example of speeding tickets but there are many areas where this idea of percentages could be applied in our society.