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Wednesday, 28 February 2007 16:04 |
 | | Carl S. Milsted, Jr. |
President Bush has finally come up with a truly good idea: a plan to restore the market for health care in this country, a plan that reduces moral hazards and the subsidies for wage slavery.
Alas, he waited until his own party lost its majority in both the House and Senate before putting forth the plan. So, is the plan dead on arrival? Will the Democrats hold out for a socialized health care system, giving us all the efficiency and performance of the public school system?
Message
to Democrats: please donít hold out. But do feel free to put your own
imprint on the plan. You can make it more progressive, while making it
simpler and more effective.
How?
Replace Bushís
$7500 tax deduction with a tax credit ñ say $2500. This is obviously
simpler than a tax deduction. It is also more progressive, since the
poor get just as much benefit as the rich.
I could hear
some right-wingers whining as I wrote that last sentence, ìNot another
wealth transfer to the poor! We canít afford to give every insured
person a $2,500 tax credit.î Indeed, such a tax credit would cost the
IRS more money.
But it might not
cost the government much more. It might even save money. What is lost
as tax credit would be at least partially made up for in less welfare
payments. If an uninsured well off person gets sick, there are many
assets to tap before that person resorts to government aid. The
government gains little by making sure such people have health
insurance. On the other hand, if a low-income person gets very sick, it
isnít long before that person is resorting to government aid or abusing
the emergency room.
Why do we grant
a tax break for the well off to buy health insurance, anyway? The
well-off have far more to lose if they get seriously ill without health
care coverage. If you have nothing, you can simply declare bankruptcy
and go on the dole. If you have home equity or money in your accounts,
this is a major financial loss. Thus, we can expect the well off to buy
at least catastrophic coverage even if there was no tax benefit.
But suppose the
well off decided to self-insure. That would be better! We would have
people shopping for major treatments using their own money. The market
for serious care would improve greatly. If anything, it would be in
societyís interest to penalize wealthy people for buying health
insurance.
Itís the
uninsured lower classes that gum up the system. They are the ones who
cannot pay their bills when the bills get high, which drives up overall
expenses for doctors and hospitals ñ and ultimately for paying
customers. If we are going to use the tax code to encourage the buying
of health insurance, we should target the lower classes as much as
possible. A tax credit is a big step in this direction, and is simple
to boot.
ï
Carl S. Milsted Jr., chairman of the Libertarian Party of Buncombe County, may be contacted at cmilsted-at-holisticpolitics.org.
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