Better late, than never?
The Washington Post has come out against the progressive tax raises proposed by Congress to pay for health care. It does so reluctantly – it’s not against the principle of progressive taxes generally – but apparently they feel that the combination of Medicare cuts and wider-than-expected targets for the surcharge are just unacceptable.
…in principle, higher taxes for the well-heeled could make sense — as part of a broader rationalization of the unduly complex tax code.
But there is no case to be made for the House Democratic majority’s proposal to fund health-care legislation through an ad hoc income tax surcharge for top-earning households. The new surtax would hit individual households earning $350,000 and above. It would start at 1 percent, bumping up to 1.5 percent at $500,000 in income and to 5.4 percent at $1 million. The new levy would begin in 2011 and is supposed to raise $540 billion over 10 years, about half the projected cost of health-care reform. The rest of the money would come from reduced spending on Medicare and Medicaid — though the surtax for the lower two categories would jump by a percentage point each in 2013 unless the Office of Management and Budget determines that the rest of the bill has saved more than $150 billion.
The long-term deficit is driven by the aging of the population as well as by growing health-care costs, both contributing to Social Security and Medicare expenses. There is simply no way to close the gap by taxing a handful of high earners. The House actions echo President Obama’s unrealistic campaign promise that he can build a larger, more progressive government while raising taxes on only the wealthiest.
To evoke one of my favorite authors, it would be unseemly for me to ask: Continue reading The Washington Post is now worried about Democratic tax plans.