A new report from Citizens for Tax Justice explains that Congress has several options to fund health care reform in a progressive way. The report was made public today by Citizens for Tax Justice (CTJ), the Service Employees International Union (SEIU), and Health Care for America Now (HCAN), at a press conference in which representatives of each group discussed the need to fund health care reform in a fair way.
The report describes several options that would accomplish three objectives simultaneously. First, they would raise a significant amount of revenue, more than a trillion dollars over a decade. Second, they would simplify the tax code, since they involve eliminating special deductions and loopholes and moving closer to taxing various types of income received by individuals in the same way. Third, they would ensure that the federal income tax continues to be a progressive tax. Almost all of the new revenue would be paid by taxpayers with adjusted gross income (AGI) above $200,000 for singles and above $250,000 for married couples, in keeping with President Obama's approach to tax policy.
Politicians and pundits have lately written or spoken of the "difficult choices" and "sacrifices" that will be necessary if the United States is to find a way to fund health care reform in a fiscally responsible way. Some have suggested new taxes on health insurance premiums. A few have even proposed a highly regressive national sales tax, or its cousin, a value-added tax. In fact, however, there are straightforward ways to raise revenue that will not be overly burdensome for taxpayers and which will not harm the economy. They involve eliminating or reducing several subsidies and preferences provided in the federal tax code to the wealthiest and most powerful among us. Combined with savings in the existing health care system, these measures could raise enough revenue to adequately fund health care reform.
Americans may not know the details of every tax break enjoyed by corporations or wealthy individuals, but they might be particularly keen to focus on them after providing Wall Street (and thus the richest people in America) the biggest taxpayer-funded bailout in history.
After propping up major corporations and their CEOs and shareholders, Congress might find it reasonable to make the following deal. Main Street is paying to make Wall Street healthy. Wall Street, when it is healthy, will return the favor.