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Leading policy-makers and scholars explain how market forces, deregulation, and consumer choice can work to improve health care for all Americans.

Commentary

No Silver Bullet
Grace-Marie Turner, Galen Institute Report, 12-10-04

Grace Marie-Turner, founder and president of the Galen Institute, writes that allowing individual tax deductions for all health care expenses, an idea recently floated on the editorial pages of The Wall Street Journal, is no silver bullet for America’s health care crisis.

“While reforming the tax treatment of health insurance is much needed, full tax deductibility would not produce fairness…since the progressive tax system automatically builds in unfairness.” In other words, affluent tax payers would get a much larger deduction for their health care spending than citizens in lower income tax brackets, who may not even have the initial resources to make health insurance purchases out-of-pocket.

Turner thinks that free market advocates can do better by providing “refundable tax credits to the uninsured. A tax credit of $1,000 is worth $1,000 to that person in the 15% tax bracket, giving him more resources and a bigger boost to purchase health insurance.” Tax deductions, on the other hand, do little for low-income Americans and might encourage “affluent Americans to push up health costs by heavily subsidizing every dollar they spend on health care and health insurance.”



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