To Do Health Care Right, Rich Must Be Taxed

I want to share an op-ed in today's Albany Times-Union from Working Families State Co-Chair Bob Master and Executive Director Dan Cantor:

A lot of things happen in Albany, but the most central is the state budget. It's through the budget that our elected leaders discuss and decide what's important. What do we favor, and who should pay for it? That's the real meaning of the budget document.

Gov. Spitzer's budget proposal has a lot of good stuff in it: Education funding. Better allocation of economic development funds. Expansion of health care programs for children and the poor.

But there are two big problems. The first is the health care cuts. And the second is an unwillingness to raise taxes on the superrich.

On the health care side, there is cause for praise as well as blame. The new governor's commitment to clear away the bureaucratic obstacles that keep hundreds of thousands of eligible New Yorkers off Medicaid is a major step forward. Unfortunately, while Spitzer is extending health coverage with one hand, he is yanking away a lifeline from the state's hospitals and nursing homes with the other.

No one denies that New York's health care system is in need of reform. No doubt, some of New York's aging hospitals have not kept pace with social and technological change. But fixing a system as vital and complex as New York's health care system takes the delicate tools of a surgeon. The governor's budget proposal applies a sledgehammer.

The second problem with the budget is closely connected to the first. New York is a state of fabulous wealth, but you wouldn't know it to listen to our budget debates.

Every year, we are whipsawed between the need for public goods and essential services -- that's what schools and health care are, after all -- and the equally powerful want for reduced taxes. In an age of stagnant wages for the middle and working class, a tax cut is one of the few ways people can get a little more money.

Left out of the equation are the rich. They are the ones who actually keep winning this debate, because they depend less on the public goods and services that go underfunded, and make out like bandits from counterproductive tax cuts at the state and federal level.

Take a breath and consider this: There are approximately 44,000 New York taxpayers with incomes more than $1 million a year -- that means they earn more than $20,000 per week. They claim an astonishing $225 billion each year, a full quarter of all income in the state. In other words, this elite club takes in more than New York's entire middle class, the 2.5 million households earning between $50,000 and $150,000 a year. The inequality in wealth that results is even more astonishing.

Some people may say this is the natural result of a vibrant free-market economy. But others know it is the result of political and social choices -- specifically, the retreat from fair taxes, and the retreat from any sense that enough is enough when it comes to the rich. Unfortunately, the case for fair taxes is seldom a political winner, so the extremely wealthy become the eternally wealthy, and we are forced to choose between funding education or funding health care.

It's time for a sane discussion of taxes. Here's an idea to start that discussion: One day's pay for every half-million.

For every $500,000 you earn, you give back to New York -- because that's all taxes are -- one day's pay (about 0.4 percent of your income). Make $1 million, give back two days pay. Lucky enough to make $2.5 million per year? That's five days' pay, or a week's salary. But remember, you still have another 51 weeks at $50,000 per week to get that $2.5 million. We can cap the number of days when we get to $10 million.

This proposal would produce more than $11 billion in revenue. That would let us do health care reform right (cover everyone, no exceptions), pay off some bonds and still let the governor make good on property tax reduction and school funding.

Spitzer's first budget proposal suggests he'll be a good governor. If he backs off his misguided health spending cuts and his unwise no-new-taxes commitment, he'll be a great one.

Share your thoughts in the comments.

Technorati tags: Working Families Party | Income Inequality