April 29, 2019

...AND CHEAPER...:

Universal Health Care Might Cost You Less Than You Think: We don't think of the premiums we already pay as taxes, but maybe we should. (Matt Bruenig, April 29, 2019, NY Times)

Just how heavy is the burden placed on American workers by employer insurance premiums? By combining data from the O.E.C.D. Taxing Wages model with data from the Medical Expenditure Panel Survey, we can see what percentage of each worker's compensation -- a figure that includes cash wages as well as the taxes and benefits employers pay on behalf of their employees -- goes toward taxes and health care, and how progressive these payments really are.

What this data shows is that lower-income workers, higher-income workers, single workers, and married workers with children all contribute around 40 percent of their pay toward taxes and health premiums. And when those health care costs are taken into account, the less well off no longer pay less than high-earners, as they do in taxes alone.

So, while opponents of comprehensive plans like Medicare for All claim those plans will greatly burden middle-class families, the truth is that we already have an unfair system. Middle-class workers in America are charged the same health insurance fees as upper-class workers despite the vast income differences between the two groups, and pay more of their earnings toward taxes and health care than workers in many wealthy countries.

For instance, according to this analysis, American families that earn around $43,000, half of the average wage, pay 37 percent of their wages to taxes and health care premiums. In high-tax Finland, the same type of family pays 23 percent of their compensation in labor taxes, which includes taxes they pay to support universal health care. In France, it's 2 percent. In the United Kingdom and Canada, it is less than 0 percent after government benefits.

Consider the impact of these insurance premiums on American families with children. Through the earned-income tax credit and the child tax credit, the federal tax code does a lot to ensure that the effective tax rates of lower-middle-class workers go down considerably when they have kids. But these efforts are effectively negated by the burden of employer-based health insurance.

Yeah, but in return we get worse health comes at much higher cost.

Posted by at April 29, 2019 4:04 AM

  

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