October 25, 2018

SALARY HIKES FOR EVERYONE!:

End the Corporate Health Care Tax (Mark R. Kramer & John Pontillo, OCTOBER 24, 2018, Harvard Business Review)

U.S. companies pay $327 billion in income taxes, but they pay $1.1 trillion -- more than three times as much -- in health insurance costs. No other OECD country imposes anything close to such a heavy "health care tax" on its businesses. Eliminating this tax by shifting all responsibility to the federal government under a single-payer system would create a massive economic stimulus, providing Democrats with the universal coverage they seek while offering corporate America a far greater stimulus than any proposed Republican tax cut.

After all, when the 2017 Tax Cuts and Jobs Act (TCJA) lowered corporate tax rates by 40%, saving corporations an estimated $950 billion over a decade, it created an immediate economic stimulus that bolstered corporate earnings and pushed the stock market to record heights. Eliminating the corporate health care tax would free up more than a trillion dollars of corporate earnings every single year, a stimulus 10 times more powerful than the TCJA.

Transferring all responsibility for health care to the federal government would not only offset 100% of what companies now pay in income taxes, it would provide an additional $773 billion a year in immediate bottom-line corporate profits that would be available for new investment. (Depending on how companies use these funds, they may end up paying tax on their increased profits, but even so, the net increase in after-tax income would substantially exceed their total taxes.)

The magnitude of this stimulus is hard to comprehend.

Not to mention cutting the money we waste on health care nearly in half as a percentage of GDP.

Posted by at October 25, 2018 4:02 AM

  

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