Make everyone a small business person
I've been thinking about tax-based stimulus packages and the cost of health care, and it seems to me that the President has his economics all in a tangle. Rather than have the top five percent of Americans get a $1.35 trillion tax break, how about we all get to write off our health insurance and healthcare costs, just as businesses that provide benefits to employees do? It would result in a huge surge in disposable income (the government could mail out checks right away to make up for the monies sunk into health costs already this year) and would relieve small and medium-sized enterprises (SMEs) of one of the most costly and unpredictable aspects of operating their business. It is, after all, the SMEs that drive most economic growth. And the money spent in response to lowered healthcare costs would provide far more tax revenue through multiplier effects than the cost of the healthcare tax deduction.
It would also shift the burden of changing jobs dramatically, as Americans would no longer be tied to their current employment by the necessities of healthcare coverage. Increasing the fluidity of labor can only be good for the free market. So let's make the worker into, for all intents and purposes, a freelance small businessperson whose negotiations with an employer are based primarily on the merits of their work and not the cost of taking on one's own healthcare.
Finally, it would kickstart the lagging biotech industry, which has been plagued by the prospects of high development costs and potentially low revenues from the resulting products.
Rep. Richard Gephardt today proposed a plan for making healthcare costs more deductible for business, but I think this plan takes the next step, which is to decouple healthcare from employment, and that would be better both for the market and democracy.
Posted by Mitch Ratcliffe at April 23, 2003 12:34 PM | TrackBack