This morning's Times and Post report that Charlie Rangel, chairman of the House Ways and Means Committee, is proposing a $550 billion tax increase over the next ten years to pay for health care reform. Specifically, Rangel's legislation would impose a 1% surtax on adjusted gross incomes over $280,000 (for individuals) / $350,000 (for couples). Nancy Pelosi has come out in favor of the idea.My analysis, which is admittedly contradictory:
THE POSITIVE:
Finally someone is talking about raising taxes as the way we'll have to pay for more/better government benefits. The Obama Administration keeps talking about "cost savings" as how we'll pay for health care, and I just don't see how it can be done based on cost savings alone. Sooner or later the US will have to, as a civic community, buck up and raise taxes to pay off these massive deficits. I give Rangel credit for talking about tax increases in the context of health care reform.
THE NEGATIVE:
I don't see this proposal going anywhere, and if it becomes a focus of the reform discussion, it is going to further stall the Democrats' ability to pass a bill. The anti-tax crusade in the US has simply become too powerful in the past ten years. The specter of a tax increase to pay for health care for the uninsured will enable the Republicans to use at least three arguments in order to gin up opposition to the legislation:
- Redistributionist economic policy is anti-American // anti-capitalist
- This is proof that the Democrats want to raise taxes in even more context and would be the camel's nose in the tent to that end
- Raising taxes in the middle of the recession is exactly the wrong "fix" for the system
