The Income Tax/Health Care Connection

(There is a hearing tonight via interactive TV link on H.202, the Health Care bill. Find a site near you. Also a presentation at 6 pm tonight with Anya Rader Wallach & Deb Richter in Grand Isle, call 372-5760 for info. – promoted by NanuqFC)

Two major issues vigorously debated today are the controversies over taxes and health care.  But few seem to consider how closely they are inter-related.

We know the wealthy pay a lot of money in income taxes for the simple reason that they have such large incomes.  But when all taxes are considered, according to the Citizens for Tax Justice, the wealthy and the middle class pay nearly the same percentage of their income for taxes (top 1%  of income pay 30.8% in total tax; $66,000 in income pay 28.5% in total tax).

But then we  have to pay for our health care. (more below)  

According to the US Department of Health and Human Services, the per person cost of health care in this country is $8,000.  Instead of paying for health care with some broad based tax based on ability to pay, working people either pay out of pocket, buy insurance, or have our employer cover this cost out of money that could be in our paycheck.  This health care “tax” is the most regressive major tax there is, adding an additional 33% tax burden on a family of three earning $72,000 per year.

Added together we have a combined tax and health care cost of about 61.5% for the $72,000 wage earner and a combined cost of only 33% for the people making about a million dollars a year.  No wonder the middle class feels strapped.

The wealthy are content with this situation in spite of the runaway health care costs because they get great health care and it only costs about two percent of their million dollar income. Any just system would have the wealthy pay more – – much more.  It’s no surprise then that many of the wealthy enlist their minions in the media and the halls of congress to fight real health care reform.

We won’t have a fair tax policy or fix our health care system unless and until we address this over-arching fairness issue and have a system for paying for health care that relies primarily on ability to pay.