Opinion

David Cay Johnston

A tale of two healthcare plans

David Cay Johnston
Sep 11, 2012 14:53 UTC

No issue affecting taxes so clearly divides the two parties in the U.S. election as healthcare. The two parties, in their platforms, describe very different approaches to healthcare economics. Both use political plastic surgery to cover up ugly truths.

The stakes are huge. Americans spend $2.64 per person for healthcare for each purchasing power equivalent dollar spent by the 33 other countries that make up the Organization for Economic Cooperation and Development. The OECD data shows the U.S. spends $8,233 per capita compared with an average of $3,118 in the other 33 countries.

A growing share of federal tax dollars, in direct spending and in tax breaks, is going to U.S. healthcare as the population ages, even though about one in six Americans lacks health insurance.

America‘s healthcare system, more accurately described as a non-system sick care system, totaled 17.6 percent of the economy in 2010, compared to an average of 9.2 percent in the other 33 countries, as the OECD data shows.

In the United States, total public and private cost of healthcare is significantly greater than the total of corporate and individual income taxes, as well as payroll taxes. For each dollar paid in all three of those taxes in 2010, healthcare came to $1.29.

America’s long slope down

David Cay Johnston
Jun 20, 2012 19:18 UTC

A broad swath of official economic data shows that America and its people are in much worse shape than when we paid higher taxes, higher interest rates and made more of the manufactured goods we use.

The numbers since the turn of the millennium point to even worse times ahead if we stay the course. Let’s look at the official numbers in today’s dollars and then what can be done to change course.

First, incomes and jobs since 2000 measured per American:

Internal Revenue Service data show that average adjusted gross income fell $2,699 through 2010 or 9 percent, compared to 2000. That’s the equivalent of making it through Thanksgiving weekend and then having no income for the rest of the year.

The fortunate 400

David Cay Johnston
Jun 6, 2012 14:33 UTC

Six American families paid no federal income taxes in 2009 while making something on the order of $200 million each. This is one of many stunning revelations in new IRS data that deserves a thorough airing in this year’s election campaign.

The data, posted on the IRS website last week, brings into sharp focus the debate over whether the rich need more tax cuts (Mitt Romney and congressional Republicans) or should pay higher rates (President Obama and most Democrats).

The annual report, which the IRS typically releases with a two-year delay, covers the 400 tax returns reporting the highest incomes in 2009. These families reported an average income of $202.4 million, down for the second year as the Great Recession slashed their capital gains.

More for the rich

David Cay Johnston
Sep 20, 2011 13:42 UTC

By David Cay Johnston
The views expressed are his own.

President Barack Obama this week started pitching his plan to cut U. S. taxes for everyone in 2012 and then in 2013 raise income tax rates for high earners, primarily those making more than $1 million, many of whom bear a lighter burden than a cop married to a nurse.

Two responses are certain.

There will be claims that economic ruin will follow once taxes go up. Never mind the proposed 2012 tax cuts are for virtually everyone. Never mind that the modest rate hikes would apply only to those who make more than 97 percent of their fellow Americans with most of the burden on those making more than $1 million. Never mind IRS data showing that tens of thousands of those whose increased taxes would increase their income tax rate by just 1.2 percentage points make more in a year than the median family earns in a lifetime.

Obama has also set a clever trap for anti-tax Republicans. Obama’s American Jobs Act would lower Social Security taxes for all workers and for all businesses in 2012. Republicans who vote against the bill would be voting against a tax cut. They would also be voting against a huge business tax break, letting business immediately write off all capital investments made in 2012.

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