Public Assets Institute > Policy Areas > Health Care > How about trusting voters with health care?

How about trusting voters with health care?

Despite the national publicity Vermont received when Gov. Peter Shumlin signed the new Green Mountain Care bill into law, there is still a lot to be done if universal health care is to become a reality here. Funding is one of the biggest unknowns, and that won’t start to take shape for another 18 months or so. Nevertheless, critics already are making dire predictions about runaway taxes and warning about the dangers of “taxpayer-financed” health care.

But before we let our assumptions run wild, it’s worth reminding ourselves just how allergic elected officials are to raising taxes.

At the national level, taxes are at their lowest level in 50 years and cover only 60 cents of every $1 we spend. If ever there was a time to act responsibly and collect the money we need to cover the services being provided, it’s now. But neither the Republicans nor the Democrats in Washington can muster the courage to do the right thing. Ten years ago, the federal government was running annual surpluses and beginning to make real progress toward eliminating the public debt. But we cut taxes on the fantasy that it would stimulate the economy, and look where it got us—$14 trillion in the hole.

Here in Vermont, we underfunded our unemployment fund for years because the Legislature refused to increase the wage base on which unemployment taxes were paid. From 1983 until about a year ago, when we were forced to address the gaping hole in the unemployment trust fund, employers paid taxes on only the first $8,000 of an employee’s wages. Meanwhile, the average wage had risen from about $14,600 in 1983 to almost $39,500 in 2010.

A healthy unemployment fund is critical in recessions like the one we’ve just been through. It not only protects the families of those who have lost their jobs through no fault of their own; it also helps the businesses whose goods and services are purchased by those who receive unemployment compensation. We could have built up an adequate unemployment fund before this recession hit, but our tax aversion has grown so strong that it’s working against our own interests.

When our democratic system works the way it is supposed to, and people actually vote to raise their own taxes, they get scolded. Governor Douglas regularly berated the tens of thousands of Vermonters who decided each spring they’d rather pay higher taxes than undermine their children’s education. The governor, in effect, told them if they didn’t have the good sense to stop raising their own taxes, Montpelier might have to start dictating how much schools could spend.

As I said, it will be a while yet before we see proposals for financing Green Mountain Care. But as we develop the plan, we might want to consider a funding system that isn’t wholly dependent on the willingness of political leaders to raise taxes when needed. We saw what happened with the Bush tax cuts. Despite polls showing majority support for rolling back tax cuts for the wealthy, both Congress and the president ignored public opinion and extended the cuts for (at least) two more years.

Perhaps for health care we should follow Vermont’s education model and let voters decide. When the governor and the Legislature were cutting funding for education, local voters understood what they really couldn’t afford was to skimp on their children’s education. Given a similar say in health care funding, Vermonters just might conclude they can’t afford poor health, either.

Posted by Jack Hoffman on August 15, 2011 at 3:37 pm

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