Debate: Would Biden's Proposed Payroll Tax Hike Protect Medicare's Solvency?
Byrnes: Higher income taxpayers don’t receive any additional Medicare benefits above and beyond what every other American receives. In fact, these taxpayers are likely to pay much more into the system because they often purchase “Medigap” plans to cover any excess expenses not covered by traditional Medicare — and, by definition, they are subject to the current Medicare rate on a higher amount of income than lower-income taxpayers. By these standards, high-income Americans are already paying more for the same benefits.
Bloink: By requiring the highest income taxpayers to pay an additional percentage on any income above $400,000, we can both protect the Medicare program’s solvency and ensure that the wealthiest Americans are paying their fair share for benefits they too receive. It’s important to remember that this tax would apply to both earned and unearned income — meaning it would also apply to dividends and other passive types of income that are often subject to lower tax rates.
Byrnes: Raising the tax rate for Medicare payroll taxes would be extremely inequitable given the nature of this so-called entitlement program — given that every American is eligible to receive only the same basic Medicare benefit regardless of their tax rate. Yet another tax hike earmarked toward the Medicare program is not the way to solve the program’s solvency issues.
Bloink: The bottom line is that wealthy Americans have the ability to skirt taxes like the Medicare payroll tax through the use of many different tax loopholes. To date, we’ve been unable to eliminate those loopholes to ensure all Americans are paying their fair share. Imposing this Medicare surtax on every type of income above $400,000 would serve to make sure that Americans are unable to avoid paying into this program that is crucial to all Americans.
Byrnes: Now is not the time to be increasing taxes. Our economic climate is extremely fragile right now. Businesses are nervous about market conditions, inflation and the possibility of entering a protracted recession. We should be focused on reining in the costs of health care and reducing the impact of inflation for all Americans. These tax hikes are unrealistic and will never actually become law.
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