The Case for Funding Health-Care Reform With a Surtax on the Wealthy
"There is no case to be made for the House Democratic majority's proposal to fund health-care legislation through an ad hoc income tax surcharge for top-earning households," writes The Washington Post's editorial page.
It's a bit of a baffling statement. The case goes like this: According to The Washington Post's own polls, paying for health-care reform with a small tax on the rich is a popular way to pay for health-care reform. Meanwhile, Republicans seem unlikely to seriously consider a bipartisan deal on health-care reform, and are instead searching for vulnerabilities with which to destroy the health-care reform effort. One of those vulnerabilities could be a method of funding health-care reform that is unpopular with voters and breaks Barack Obama's pledge to lower taxes for families making less than $250,000 a year. As such, Democrats are increasingly interested in a popular method of raising revenue that does not break any of Obama's campaign promises.
On the policy merits, I agree with the editorial board that it would be preferable to eliminate the employer tax exclusion and rebuild the system in a more progressive fashion. But I've not seen any argument, and they've not provided any argument, suggesting that such a thing is politically possible at this juncture.
So the question actually becomes whether there's a case for the surtax given the necessity of passing health-care reform, the difficulty of corralling the votes, and the need to fund the bill in a way that the public is comfortable with. I can see an argument for and against the surtax on those grounds, but it's certainly not cut-and-dry. And so much as I think the editorial board members gets something important right when they say that it is time to stop pretending that we can "build a larger, more progressive government while raising taxes on only the wealthiest," diminishing the stigma associated with taxes is a long-term project. Making its completion a pre-condition for health-care reform would be unwise.
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