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Politics : A US National Health Care System?
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To: John Koligman who wrote (16646)4/16/2010 9:36:03 AM
From: Lane3  Read Replies (1) of 42652
 
Here is a suggestion from Megan McArdle re the problem I mentioned of skin in the game where half pay no income tax. FWIW.

I think the real problem with the current setup is the political economy of it. A very large percentage of our electorate has nothing at stake when they vote for new spending. Since that spending imposes real costs on other people, and the economy at large, this is a problem. We don't want to end up in a situation where 65% of the population is systematically voting to take the stuff possessed by the other 35%.

But that doesn't mean we need to raise taxes on poor people; rather, it means they should have some skin in the game. Simplify the tax code, and expand the EITC into a negative income tax which then continuously scales into a progressive income tax up to some maximum . . . and then make it clear that new spending means that all the marginal rates go up a little bit. If you want a new project, you have to be willing to give up some of your EITC to pay for it. Not as much, percentage-wise, as Warren Buffet might pay. But no free programs.

This is something of a pipe dream, but it seems to me that this should be something liberals and conservatives can broadly agree on. Liberals get a somewhat more generous welfare state--and conservatives get a natural check on further growth.

theatlantic.com
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