Debate Over Health Care Reform, and How to Pay for It, Continues


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All eyes are on Congress as members of key committees discuss a comprehensive health care reform package. The President has asked to have a bill on his desk by October 1. This week the Senate Health, Education, Labor and Pensions Committee released its draft plan on the same day that House committee chairmen briefed House Democrats on key features of their plan. Both of those plans are long on details about reforming the health care system, but short on ways to pay for it. For now, Congressional committees are focusing on the features of the plan itself and putting off the discussion of the financing.

The Senate Finance Committee, which will have to tackle the financing, in May released a 41-page list of far-ranging options for financing health care reform which included changing the tax exclusion on employer-provided health benefits, raising excise taxes on alcohol, and imposing excise taxes on sugar-sweetened drinks. Earlier this month, the non-partisan Joint Committee on Taxation (JCT) provided lawmakers with revenue estimates for certain financing options currently being discussed.

The President is still talking about his budget proposals for financing health care reform, including limiting the value of itemized deductions for higher-income taxpayers to 28 percent, which would raise revenue in a more progressive manner than the other options listed in the Finance Committee document. (See the CTJ report describing this and other revenue proposals in the President's budget.)

As the bills wind their way through Congress, organizations in the Rebuild and Renew America Now (RRAN) coalition are reminding lawmakers that there are many progressive ways to raise revenue to fund health care and other initiatives. Besides the President's revenue proposals, several additional options are described in CTJ's May 21 report on health care financing.

For example, one option is to expand the Medicare tax to apply to all income (with an exemption for seniors), whereas today it only applies to wages and salaries. This proposal does not complicate the tax code the way many other proposals would and it raises revenue with a tax already in place to fund health care. It is also more progressive than many other options being considered.

Representatives of RRAN member organizations are meeting with lawmakers and their staff to discuss progressive revenue-raisers like this.

Organizations that want to sign RRAN's two-page statement of principles on progressive revenue sources can go to the Coalition on Human Needs website or simply click here. For more information about the coalition visit www.rebuildandrenew.org.

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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