Many perspectives, 1 simple etiquette

Though Headed in the Right Direction, Bernie's Health Care Plan Has Major Flaws

Author: Steve Hough
Created: 18 January, 2016
Updated: 21 November, 2022
3 min read

I love Bernie Sanders, and I recognize the need for universal single payer health care. I love that Bernie is still pushing for it, because “Obamacare” is far too expensive. It does not reduce the costs of our health care system, and it does not achieve the goal of universal coverage, but we cannot go backward. We must move forward.

Unfortunately, Bernie’s plan has several flaws. The flaws are no doubt a result of the way our partisan government operates, but they should be highlighted nonetheless.

While I believe raising the minimum wage is long overdue, adding an additional 6.2% payroll tax on employers is not a good idea. An argument can be made that businesses unable to pay an increased minimum wage are not viable business models and should not exist, but adding the additional payroll tax on top of an increased minimum wage will adversely affect small businesses disproportionately.

A better alternative would be to raise the minimum wage and eliminate payroll taxes entirely.

Just as there is no real reason Social Security and the current Medicare program could not be paid from the general fund, there is no reason a universal health care plan could not also be paid by general fund revenue.

Eliminating payroll taxes would benefit employers and employees. Just as employees are now being asked to consider the tradeoff between increased income tax and the elimination of health care premiums and out-of-pocket expenses, the same tradeoff is applicable to the elimination of payroll taxes and a potential increase in income tax.

Employers would benefit immediately. The savings could help fund wage increases or a reduction in prices allowing firms to be more competitive.

Another source of huge savings -- that is not being mentioned -- is the savings (both short-term and long-term) as government employees are laid off as administrative offices are closed on the local, state, and federal levels. A number of government-funded programs will be eliminated, or could be absorbed, including Medicaid, CHIP, and even the VA health care system.

Again, the savings would be huge, but the displaced government employees will need to find jobs in the private sector. Our economy is not able to accommodate them in its current state. That is why economic revival is critical to the success of a universal health care plan and must precede its implementation.

As Bernie has not been shy about his desire to raise tax rates on the wealthy, I am not sure why he has opted for an additional tax on all employers instead of even steeper taxes on the wealthy, especially those at the very top.

I also believe we should eliminate the corporate income tax, which Bernie ignores.

In order to revitalize our economy, the owners of capital must reinvest in America. In order to do that I believe we must send them a message. That message is this:

You already pay a disproportionate amount of the tax burden, but you will pay even more if you do not control your unmitigated greed and broaden the tax base by reinvesting in American jobs. We’ll eliminate your corporate income tax, payroll taxes, relieve you of the burden of subsidizing employee health care, but it will not merely be a windfall. Create the jobs at home instead of China, etc. and your taxes will go back down.

It has become painfully obvious that they will not abandon the status quo (buying Congress for protection) voluntarily.

Editor's note: This article originally published on the blog 1 Concerned Citizen on January 18, 2016, and has been modified slightly for publication on IVN. 

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