I have not joined my fellow tax bloggers on the bandwagon to post my comments on the various Health Care “reform” proposals that have been kicked around Congress mostly because I have not had the time to find and review a good “impartial” overview of the proposals.
I do not want “socialized medicine”, nor do I want a new Medicare-like government run regime. What I do want is for insurance premiums to be “equalized” throughout the US so that I do not pay more in NJ for the same coverage than someone in the same situation in Kansas, and some kind of subsidies or credits to make health insurance affordable.
Last year a small business client paid over $15,000 in health insurance premiums to cover himself, his wife and a high-school age son.
I am glad that Congress did not rush to action and pass a Health Care bill before adjourning for the summer. What I also do not want is the typical Congressional quick-fix “reaction” to the problem instead of a carefully thought out and appropriate “response” to the issue.
Because any reform must be “revenue neutral” (unlike corporate bail-outs) there has been much discussion on ways to offset the gigantic cost of the program. Among them are “sin taxes” and the ever-popular stand-by “tax the rich” because “they can afford it” via tax surcharges.
As a general principal I do not believe that the Tax Code should be used for “social engineering” or “redistribution of wealth”. That is why I am very much for the most part against refundable tax credits like the Earned Income Credit and other substitute welfare programs. I am also against refundable tax credits because they breed tax fraud faster than rabbits.
I do believe that the Tax Code can be used to “encourage” behavior that is beneficial to Society and to the Economy in general by “rewarding” such behavior with tax benefits.
I am sure that we can all agree that charitable giving, post-secondary and continuing education, saving for retirement or health emergencies, investing in the stock market, reducing energy consumption, and perhaps even owning a home are all “behaviors” that benefit society and the economy and that should be “encouraged” by providing “rewards” via the Tax Code through deductions, credits and preferred tax rates.
I am against using the Tax Code to “punish” perceived “bad” behavior. We say that smoking and alcohol are “bad”, so let’s tax cigarettes and liquor up the arse to make people stop smoking and drinking and, more importantly, raise revenues. Obesity is also “bad”, so let’s force everyone to eat properly, and filler government coffers, by excessively taxing junk food.
One of the main reasons I am against “sin taxes” is that I do not want the local, state or federal government to determine what is a “sin” or what is “bad” behavior. I do believe the phrase is “a slippery slope”. What if, God forbid (no pun intended), the extreme religious right comes to power? The possibilities are frightening.
I am also against taxing the rich simply “because they can afford it”. Recent studies have shown that the “rich” already pay more than their share of taxes. The Tax Foundation’s TAX POLICY BLOG recently posted “Tax Burden of Top 1% Now Exceeds That of Bottom 95%”.
I do not believe in a highly “progressive” tax system that “punishes” such positive behavior as ambition, entrepreneurship and just plain hard work with a higher tax rate.
It is argued that the rich should pay more because they ultimately get more benefit from the programs and protections of the government (although those who pay absolutely no income tax seem to me to be getting much more benefit from government). With a relatively flat tax system the rich would still pay more than the not so rich – 25% of $1 Million is a lot more than 25% of $50,000.
I don’t have the answer to how to pay for health care refund on the top of my head. It will take careful study and consideration.
So what do you think?