On healthcare and taxes

The Health Policy Institute of Ohio has an excellent set of brief online pamphlets about the impacts of the (until recently certain to be implemented) policy of expanding medicaid coverage to cover the “hole” between existing medicaid coverage and the Obamacare subsidies. In a nutshell, this primarily assists the working poor (as 58 percent of the households assisted by the expansion have at least one full-time working member), and a good chunk of the rest of the families assisted are elderly retired couples. Calling this economic redistribution seems like a distraction from the real issue: there’s an entire class of people in the United States who aren’t paid wages that allow them to actually buy necessities like healthcare.

(Ohio had one of the largest populations that would benefit from such an expansion, from here.)

Having states or the federal government enter the picture and actually cover those people’s healthcare in part or full is an obvious good in that it addresses their immediate needs, but also indirectly. It frees up those people caught in the “hole” to use the small amounts of money they currently have saved up for the rare co-pays they allow themselves on consumer items – indirectly stimulating the economy through whatever purchases they make.

But the funds for that coverage have to come from somewhere, even if the state of Ohio hopes to earn some of it back in sales tax and pass along the majority of the costs to the federal government (as medicaid primarily receives funding from there, with various new spending guarantees because of Obamacare, actually). How are we going to jump start the economy and raise living standards without the necessary funds which most companies are now pocketing as “profits”?

(An image being circulated about the approximately $400 billion lost to tax evasion annually in the US, from here and figures from here.)

Ultimately, the issue of how our tax policies are structured and how we prevent tax dodging is not just about “equity” or a vision of fairness, it’s also about how we as a society amass the funds to better ourselves.

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