Alternate funding options exist for universal health care
And lest investors think that alternate funding strategies do not exist, here are a few:
- A tax to pay for the Iraq and Afghanistan wars. The Iraq War has cost roughly $667 billion, the Afghanistan War about $222 billion. Each defense expenditure has been passed without a tax increase, so it has added to the national debt, and the nation's interest costs. The total costs including interest will likely exceed $1.2 trillion (and probably far more, depending on the length of each operation). Pass a $1.2 trillion tax increase to pay for the wars, and the U.S. will free up money to essentially pay for universal health care.
- A universal income-tax increase: a 1 percent to 3 percent tax on all filers (with a sliding-scale exemption for low-income taxpayers). This tax could work like the Medicare tax, only with a far higher maximum income subject to the tax. This increase would likely raise between $40 billion and $100 billion per year, paying for most of universal health care.
- Combine a tax on capital gains with a stock-transaction fee dedicated to a health-insurance fund. Depending on the amount of each tax, this plan could raise $20 billion to $40 billion per year.
- Additional Medicare/Medicaid cuts. House Speaker Nancy Pelosi (D-Calif.) has underscored her support for wringing additional savings out of Medicare/Medicaid. These further program efficiency efforts could yield another $10 billion to $25 billion per year.
- Partial five-year federal tax amnesty. The U.S. Congress could pass a partial, time-limited federal tax amnesty for individuals and corporations. Here's how it would work: Come clean with the past money you owe or otherwise haven't paid over the past five years, and the IRS forgives penalties, interest, and up to 40 percent of the amount owed. Pass this unconventional tactic and watch the federal revenue fly in! Economist Richard Felson, who studies the U.S. budget, estimates that a five-year amnesty program could net as much as $400 billion in additional federal receipts.
Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.