95% of U.S. Households Would Save Money with National Improved Medicare

“Health care financing in the U.S. is regressive, weighing heaviest on the poor, the working class, and the sick. With the progressive financing plan outlined for HR 676 (below), 95% of all U.S. households would save money. HR 676 (Section 211, Appendix 2) specifies a financing plan for single-payer that includes 

  • Maintaining current federal financing for health care 
  • Increasing personal income taxes on the top 5% of income earners 
  • Instituting a modest tax on unearned income 
  • Instituting a modest and progressive tax on payroll, self employment 
  • Instituting a small tax on stock and bond transactions 

The following progressive financing plan would meet the specifications of HR 676: 

  • Existing sources of federal revenues for health care 
  • Tax of 0.5% on stock trades and 0.01% tax per year to maturity on transactions in bonds, swaps, and trades 
  • 6% high-income surtax (applies to households with incomes > $225,000) 
  • 6% tax on unearned income from capital gains, dividends, interest, profits, and rents 
  • 6% payroll tax on top 60% of income earners (applies to incomes over $53,000, tax paid by employers)
  • 3% payroll tax on the bottom 40% of income earners (applies to incomes under $53,000, tax paid by employers)…”

“Note: The percentages shown here are the difference between the share of income spent on health care now and the amount that would be spent under the proposed single-payer plan including the taxes proposed to replace the current regressive funding system. The taxes included here are a Tobin tax (described in the text), a 6% surtax on the richest 5% of households, a 6% tax on unearned income (including capital gains, dividends, interest, profits, and rents), a 6% tax on the top 60% of wages and salaries, and a 3% tax on the bottom 40%. The first four bars from the left represent the income of the bottom four quintiles of the population; the next bar (for an average income of $216,922) represents the next 15% (from the 80th to the 95th percentile); the next bar represents the next 4%; the next bar (for an average income of $2,994,817) represents the mean income of the richest 1% of the population; and the final bar (with an average income of $166,592,800) represents the wealthiest 400 American households based on their tax returns.17 Note that the only groups in the population who would pay more for care are the richest 5%”

Gerald Friedman, Ph.D., “Funding HR 676: The Expanded and Improved Medicare for All Act How we can afford a national single-payer health plan,” Department of Economics, University of Massachusetts at Amherst, July 31, 2013, p.1, p. 7

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