By David Leonhardt
updated 8:05 a.m. ET March 24, 2010
For all the political and economic uncertainties about health reform, at least one thing seems clear: The bill that President Obama signed on Tuesday is the federal governments biggest attack on economic inequality since inequality began rising more than three decades ago.
Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rates have fallen more than rates for the middle class and poor.
Nearly every major aspect of the health bill pushes in the other direction. This fact helps explain why Mr. Obama was willing to spend so much political capital on the issue, even though it did not appear to be his top priority as a presidential candidate. Beyond the health reforms effect on the medical system, it is the centerpiece of his deliberate effort to end what historians have called the age of Reagan.
Speaking to an ebullient audience of Democratic legislators and White House aides at the bill-signing ceremony on Tuesday, Mr. Obama claimed that health reform would mark a new season in America. He added, We have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their health care.
Taxing the rich
The bill is the most sweeping piece of federal legislation since Medicare was passed in 1965. It aims to smooth out one of the roughest edges in American society the inability of many people to afford medical care after they lose a job or get sick. And it would do so in large measure by taxing the rich.
A big chunk of the money to pay for the bill comes from lifting payroll taxes on households making more than $250,000. On average, the annual tax bill for households making more than $1 million a year will rise by $46,000 in 2013, according to the Tax Policy Center, a Washington research group. Another major piece of financing would cut Medicare subsidies for private insurers, ultimately affecting their executives and shareholders.
updated 8:05 a.m. ET March 24, 2010
For all the political and economic uncertainties about health reform, at least one thing seems clear: The bill that President Obama signed on Tuesday is the federal governments biggest attack on economic inequality since inequality began rising more than three decades ago.
Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rates have fallen more than rates for the middle class and poor.
Nearly every major aspect of the health bill pushes in the other direction. This fact helps explain why Mr. Obama was willing to spend so much political capital on the issue, even though it did not appear to be his top priority as a presidential candidate. Beyond the health reforms effect on the medical system, it is the centerpiece of his deliberate effort to end what historians have called the age of Reagan.
Speaking to an ebullient audience of Democratic legislators and White House aides at the bill-signing ceremony on Tuesday, Mr. Obama claimed that health reform would mark a new season in America. He added, We have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their health care.
Taxing the rich
The bill is the most sweeping piece of federal legislation since Medicare was passed in 1965. It aims to smooth out one of the roughest edges in American society the inability of many people to afford medical care after they lose a job or get sick. And it would do so in large measure by taxing the rich.
A big chunk of the money to pay for the bill comes from lifting payroll taxes on households making more than $250,000. On average, the annual tax bill for households making more than $1 million a year will rise by $46,000 in 2013, according to the Tax Policy Center, a Washington research group. Another major piece of financing would cut Medicare subsidies for private insurers, ultimately affecting their executives and shareholders.
