FAIR TAX PLAN KEY TO HEALTH REFORM THAT PROTECTS STRUGGLING NEW YORK FAMILIES

FAIR TAX PLAN KEY TO HEALTH REFORM THAT PROTECTS STRUGGLING NEW YORK FAMILIES

New Twin Studies Show that Tax Increase on High Income People Needed to Prevent Health Care Reform from Becoming Unaffordable for New Yorkers

Saratoga Springs, NY – As, Congress continues to debate how to pay for health care reform, Citizen Action today praised a proposed “surcharge” on the income of couples making over $350,000 annually, saying that a fair tax plan is the only reasonable means to achieve health care for all, because it would make reform affordable for struggling New Yorkers. Citizen Action released two studies today that together show that health care is becoming increasing unaffordable in New York, but that the surcharge proposal would address the issue of affordability without raising taxes on average New Yorkers.

“We need to lower health care costs and improve coverage for the majority of Americans who have health insurance, while expanding coverage to the tens of millions of Americans that are uninsured,” said Chris Scoville. “There’s no two ways about it: providing the necessary subsidies for low and middle income people to purchase affordable health insurance is going to require large expenditures by the federal government. In order to make reform sustainable in the long-term, we’ve got to ask the wealthiest Americans — those who benefitted from the Bush tax cuts — to pay their fair share.”

“The affordability study we’re releasing today finds that New York had almost an 8 percent unemployment rate as of April, and over 45,000 non-business bankruptcies in 2008,” said Al Ormsby. “Given the weak New York State economy, it would be totally unacceptable to increase out-of-pocket costs for low and moderate income people. We must fund health care reform by asking the wealthy to contribute a bit more to provide economic and health security for all New Yorkers.”

The affordability study, prepared by Health Care for America Now (HCAN), finds that health insurance premiums for New York working families have gone up 81% between 2000 and 2007, a period in which New Yorkers’ median earnings went up only 11%. The HCAN report finds that health care will become increasingly unaffordable without reform: while the full cost of employer-sponsored insurance now equals 25 percent of median family income in New York that number will grow to 47 percent by 2016 if meaningful health reform doesn’t pass, pricing more and more New Yorkers out of the health care market. (The report is available at: hcanny.org)

Citizen Action also released a second report today by Citizens for Tax Justice (CTJ) finding that a proposal pending in the House to impose an income tax surcharge on married couples with an adjusted gross income of $350,000 ($280 million for single taxpayers) would affect only 1.8% of New Yorkers. Nationally, the surcharge would raise $540 to $550 billion to fund health care for all with a public health insurance option. (Copies of all 50 state reports, including the New York report, are available at: http://www.ctj.org/payingforhealthcare/ny.pdf.)

“The House income tax surcharge proposal essentially asks the richest one percent of Americans to give back some of the tax cuts they received in the Bush years to help fund our most critical domestic priority in a generation: providing all Americans with quality health care,” said Scoville. “The richest one percent of Americans will have received $700 billion from the Bush tax cuts by the end of 2010. These wealthy Americans can obviously afford to contribute a little bit more to ensure that all Americans have access to quality health care coverage.”

The CTJ study also recommends that the Congress consider two other progressive revenue proposals. First, in a proposal also endorsed by HCAN, the Medicare payroll tax, which is presently levied at a flat rate of 2.9% on wages alone, would be made more equitable by extending the individual portion of the tax (e.g. the 1.45% currently paid by employees) to cover capital gains and other investment income, and introducing a higher rate of 2.5% on annual income above $250,000 for married couples ($200,000 for single individuals), raising $500 billion over a decade. About 72% of the increase in taxes for New York taxpayers would be paid by the richest 1% of the state’s taxpayers, the study finds. Second, in a proposal by the President that would impact on only 1.2% of New York taxpayers, the value of itemized deductions by high-income taxpayers would be limited to 28%. This would raise $260 billion over a decade for health care reform and other critical national priorities, while increasing the fairness of the tax code by reducing the present disparity between the amount that can be deducted by between middle and high income taxpayers.

Citizen Action of New York is a membership organization that advocates for social, racial, economic and environmental justice with affiliates in 7 locations statewide. In New York State, it coordinates Health Care for American Now, the nation’s largest health care reform campaign.