November 5, 2019

DON'T TAX WHAT YOU DO WANT

Warren's Perpetual Medicare Head Tax Is Unworkable and Bad (Matt Bruenig,  November 1, 2019, 3P)

[B]owing to the stupid media discourse on this, Warren put forward a financing proposal that is clearly unworkable and bad. The proposal is as follows:

Employers will be required to pay an "Employer Medicare Contribution" equal to 98 percent of their per-employee health care costs in the year prior to Medicare for All's implementation. This will mean that initially some employers pay more than others since that is already the case in the status quo. But over time, each employer's contribution will be gradually converged to the average Employer Medicare Contribution until every qualifying employer is paying the same amount per employee.

Employers with less than 50 employees would be exempt from the Employer Medicare contribution both initially and forever.

Independent contractors (and the companies who hire them) will also be exempt from the Employer Medicare contribution both initially and forever.

Bad Distribution

What Warren is proposing here, in ordinary fiscal language, is a Medicare Head Tax. This is a departure from the normal Medicare Payroll Tax proposals. The distributive difference between them is that the Medicare Payroll Tax charges a specific percentage of each worker's earnings, while the Medicare Head Tax charges a specific dollar amount per worker.

If we value jobs, no one should be taxed on the basis of providing them. 

Posted by at November 5, 2019 12:00 AM

  

« IMPORTING THE SUPERIOR CULTURE: | Main | CUE THE ANTI-SEMITISM: »