Single Payer addresses income inequity; public option does not

June 24, 2019

Topics: Quote of the Day

By Paul Krugman
The New York Times, June 22, 2019

No doubt many wealthy backers of tax cuts for themselves and benefit cuts for others manage to convince themselves that this is in everyone’s interest. People are in general good at that sort of self-delusion. The fact remains that the wealthy, on average, push for policies that benefit themselves even when they often hurt the economy as a whole. And the sheer wealth of the wealthy is what empowers them to get a lot of what they want.

So what does this imply going forward? First, in the near term, both during the 2020 election and after, it’s going to be really important to ride herd on both centrist politicians and the media, and not let them pull another 2011, treating the policy preferences of the 0.1 percent as the Right Thing as opposed to, well, what a certain small class of people want. There’s a fairly long list of things progressives have recently advocated that the usual suspects will try to convince everyone are crazy ideas nobody serious would support, e.g.

• A 70 percent top tax rate
• A wealth tax on very large fortunes
• Universal child care
• Deficit-financed spending on infrastructure

You don’t have to support any or all of these policy ideas to recognize that they are anything but crazy. They are, in fact, backed by research from some of the world’s leading economic experts. Any journalist or centrist politician who treats them as self-evidently irresponsible is doing a 2011, internalizing the prejudices of the wealthy and treating them as if they were facts.

But while vigilance can mitigate the extent to which the wealthy get to define the policy agenda, in the end big money will find a way — unless there’s less big money to begin with. So reducing the extreme concentration of income and wealth isn’t just a desirable thing on social and economic grounds. It’s also a necessary step toward a healthier political system.

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Reader Comment:

By Don McCanne, M.D.

Although there has been considerable support for the single payer model of Medicare for All, the prevailing rhetoric has now become “letting you keep the insurance you have,” and this bears directly on the wealth inequality issue.

The single payer model addresses wealth and income inequality by switching from a system heavily dependent on individual contributions (premiums, deductibles, and especially forgone wage increases) to a system that uses progressive taxes to fund the 18 percent of our economy that we’re devoting to health care. This is one of the most important tools available to us to reduce the inequities in income and wealth distribution.

Most of the politicians who claim they support Medicare for All actually support the perpetuation of our highly regressive method of funding health care through employer-sponsored plans – health care financing that is costing middle-income Americans a significantly larger percentage of their incomes than they would be paying under single payer, whereas the wealthy are paying a percentage that is not detectable to them, unless they study their accountants’ reports.

Only the genuine single payer Medicare for All proposal of Bernie Sanders and Pramila Jayapal would take a major step towards reducing income inequality. The other Medicare for Some proposals fall miserably short of this crucial goal.

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

Although this blog is devoted primarily to achieving health care equity through a single payer national health program, the profound income and wealth inequity in our nation is a parallel problem, but the great thing is that they can both be addressed simultaneously.

Although the politicians are once again touting employer-sponsored health insurance as the mainstay of health care financing (“you can keep the insurance you have” for half of the population), middle-income employees and their families are finding health care less affordable because they are footing the bill for their share of the 18 percent of our economy devoted to health care since they have to pay individually through premiums, deductibles, and especially through forgone wage increases.

This has been compounded during the last four decades by an economy that has left wages comparatively flat while gains of increased productivity have moved to the top of the income scale. Opponents of single payer Medicare for All claim that there is not enough money amongst the very rich to be able to make health care affordable for the rest of us. They also say that individuals could not afford the payroll taxes that would be required to pay for health care. This is nonsense, and here’s why.

The money is there, but a disproportionate amount is up at the top. This means that, if we want everyone to have health care, we have to shift from individual financing to a more progressive, equitable system of financing, and that means progressive taxes. Funding it all through payroll taxes leaves too great of a burden on workers, and it fails to correct the profound inequity of income and wealth. So the taxes need to be more progressive.

This is not the place to discuss specifics of the intricacies of tax policy, but suffice it to say that taxes are not only important as a revenue source to fund our essential government functions, tax policies also can go a long way toward correcting some of the economic injustices in our society. Thus we need to consider using potential tax sources such as higher progressive taxes on marginal income, wealth taxes including taxes on high net worth estates, appropriate taxes on pass-through income, Tobin taxes on equity transactions, and the $1.5 trillion in tax expenditures (reductions in federal income tax revenues through deductions, exclusions and other tax preferences – why should tax payers help pay for mortgages on million dollar homes when homelessness is rampant?). The money is there, and the amount that would be collected under a more progressive but equitable tax system would never impact the life styles of the wealthy.

Thus when we advocate for an affordable and equitable health care system – single payer Medicare for All – we will have the satisfaction of knowing that we would also be reducing (though not eliminating) the profound inequities in income and wealth. The rich will still be very, very rich, but all the rest of us will have health care.

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