Leaders in House Seek to Tax Rich for Health Plan
http://www.nytimes.com/2009/07/11/health/policy/11health.html
|Summary|
The US House of Representative is asking the wealthiest Americans to help pay for overhauling the health care system with a $550 billion income tax increase. The chairman, Representative Charles B. Rangel of New York said the proposal calls for a surtax on individuals earning at least $280,000 in adjusted gross income and couples earning more than $350,000. Aside of that, representative leaders are also supportive of the idea, which they conclude would be their main way to pay for Obama’s top policy priority: expanding health insurance coverage to virtually all Americans and to decrease the steep in the cost of medical care while improving patient outcomes. On the down side, the proposed tax increase would potentially hurt small-business owners. “In the middle of a serious recession, with unemployment nearing double digits, the last thing we need is a tax increase on small businesses, which will cost the American economy even more jobs,” said Michael Steel, a spokesman for the House Republican leader, Representative John A. Boehner of Ohio.
|Connection|
This following article relates to the ability-to-pay approach discussed in chapter four of the economics textbook because it suggests a proposal for wealthier people to help pay for the organization of the health care system in America by paying surtax based on their gross income. The ability-to-pay approach is defined as a taxation approach that proposes individuals be taxed based on their ability to pay taxes. Also, this article reflects on the concept of progressive tax because the United States operates on the progressive tax system (tax approach in which the percentage of income an individual pays in taxes increases as the individual’s level of income increases) and in this article, it summarizes that the wealthier people with a higher sustainable income pays more. In addition, this article also relates to third –party effects, the results of a transaction between two parties that may also have an impact on others, positive or negative, because although every American citizen is paying taxes, the wealthier ones exceeding a certain amount of income is asked to pay surtax to help the development of health care organizing in America. This means that the wealthier people are paying the huge bulk of it while the people with a lower ability-to-pay are paying the minimal.
|Reflection|
The tax system used in the United States is progressive, that is, proportionate to income. Therefore, the wealthier are paying a larger portion of tax based on their income than compared to average American household incomes. Personally there is a liberal side, supporting to pay more taxes, and a conservative side where conservatives would claim taxing the wealthier at a higher rate penalizes success and discourages the best and brightest from working even harder. Both sides have valid points that support their ideology as well whether the wealthier should have an increased tax to pay or not. My belief is that I’m more to the conservative side because if I were rich I wouldn’t think it is fair to be paying surtax.
