Next up, tax reform
After eight months of more big talk than big accomplishments, including failure to produce a cogent alternative to ObamaCare after seven years of bellyaching, the inept Congress and squabbling Trump administration are gearing up to debate tax reform.
I had lunch last week with an old friend who said she was unable to get necessary medical treatment. Still two years away from being Medicare-eligible, she could no longer afford her $450 monthly bill for insulin to manage her blood sugar. For people in her situation, or worse, you'd think that our politicians and policy professionals by now would have developed a workable, equitable and efficient U.S. health-care system.
For starters, the politicians, rather than reinventing the wheel, could look at how any number of countries succeeded in providing universal health care: France, Germany, Italy, Austria, Netherlands, Denmark, Sweden, Finland, Greece, Malta, Croatia, Romania, Luxembourg, Moldova, Portugal, Ukraine, Czech Republic, Great Britain, Russia, Serbia, Portugal, Iceland and Ireland.
On health-care quality and availability and their populations' overall health, the Legatum Institute, a London-based research organization, ranked the 16 countries with the best health-care systems in its annual global Prosperity Index released in November 2016. The institute ranked how healthy a country's people are, as measured by basic mental and physical health, health-care infrastructure and availability of preventative care.
The Legatum ranking of the 16 best health-care systems, in descending order: Luxembourg, Singapore, Switzerland, Japan, Netherlands, Sweden, Hong Kong, Australia, Israel, Germany, Belgium, New Zealand, Norway, France, Qatar, Canada. Great Britain, whose National Health Service, launched in 1948, globally pioneered free — i.e., tax-paid — health care at the point of delivery missed out on being included among the 16 best, finishing 20th. The United States placed 32nd.
With tax reform now on the agenda, the politicians in D.C. could again benefit by looking at what has worked — this time in our own country, as developed and enacted by both Democrat and Republican administrations.
Inaugurated in January 1961, President John F. Kennedy faced a sluggish and declining economy. He proposed cutting the top marginal income tax rate to 65 percent, down from 91 percent, and a corporate tax reduction to 47 percent, down from 52 percent. Adhering closely to his proposal, Congress passed the Revenue Act of 1964, dropping the top marginal income-tax rate from 91 to 70 percent and the corporate tax rate from 52 to 48 percent.
The GDP's annual growth rate, hemmed in at a modest 2.6 percent in 1960, more than doubled after Kennedy's tax proposal was enacted, rising to 5.8, 6.5 and 6.6 percent, respectively, in 1964, 1965 and 1966, while unemployment dropped from 6.6 percent in 1961 to a “full employment” rate of 3.8 percent in 1966.
The Reagan tax cuts of 1981 and subsequent economic improvements were nearly a mirror image of Kennedy's tax cuts and economic turnaround.
Ralph R. Reiland is associate professor of economics emeritus at Robert Morris University and a local restaurateur (email@example.com).