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How Will We Pay for Health Care Reform
Health care reform is going to be expensive, at least at first. There have been several proposals on how to pay for such an ambitious plan but the one that seems to please most government representatives is taxing individuals and families that gross over $250,000 per year. The tax bite would be in the form of a mortgage interest reduction as well as reducing the amount of charitable deductions they are allowed to claim.
Pros and Cons of Taxing the Wealthy
All government programs depend on taxes to fund them. Taxes pay for our roads, libraries, schools and other services that make our quality of life better then any other country in the world. It makes sense to tax those that can afford it. The tax burden on the middle class is already overwhelming and the working poor can hardly afford any tax hikes.
While the people with the most personal wealth can afford higher taxes than the average person, this way of paying for health care reform may very well have some unintended consequences. Reducing the amount that can be deducted for charitable contributions might leave many charities shortchanged and dependent on more government largesse in order to serve those in dire need. Get the best Miami health insurance rates!
Small business provides 64% of all jobs in the United States and most small business owners make a little over $250 thousand per year. By taxing these entrepreneurs there is a very real danger that the country will lose even more jobs, increasing the demands on government subsidies and charitable organizations. Since the extremely wealthy make use of tax shelters and offshore bank accounts, the burden would fall to those who can least afford it. The domino effect of taxing “wealthy” business owners may very well backfire with disastrous effects.
The Effect on Real Estate
The ability to deduct mortgage taxes is a strong incentive to buy property. If that deduction is reduced or rescinded, the real estate market could plummet further than it already has. This also has a cumulative effect of job losses, retail and wholesale sales reductions and the slowing of housing starts. Many homes already on the market will remain empty, causing neighborhoods to deteriorate and the crime rate to rise.
It’s Not All Bad News
Now that the country has made a determined effort to begin working on health care reform and actually come up with some options, the future of this issue might be a little brighter. Merely talking about an important issue does nothing to solve it while taking concrete steps, even the wrong ones, puts us on the path to solving a very real problem.