Yes, we pay a lot for healthcare. That doesn’t make healthcare spending a tax, let alone a poll tax.
Yet that’s the argument put forward by two world-renowned economists in the Washington Post. They’re not alone in their thinking: University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman, the architect of Sen. Elizabeth Warren’s wealth tax proposal, have both made the same nonsense claim that healthcare costs are a “poll tax” in the past.
“They are surprised Americans aren’t revolting against these taxes,” the Washington Post reports. What Americans should really revolt against are Nobel Prize-winning economists not knowing that an expense is, by definition, not a tax if it’s not the government collecting it.
Next, we find out that “the U.S. healthcare system is the most expensive in the world, costing about $1 trillion more per year than the next-most-expensive system — Switzerland’s.” At 8.5 million inhabitants, Switzerland has a smaller population than New Jersey. We may not like the health outcomes we’d get if we tried to lower national healthcare spending levels to those of New Jersey — because that would entail cutting national healthcare spending by 98%.
But to their credit, the authors quickly add, “that means U.S. households pay an extra $8,000 per year, compared with what Swiss families pay.” That amount is roughly accurate if they, like too many people, use the terms “families” and “households” interchangeably. What is certainly not accurate is to describe such expenditure as a poll tax, of all things.
The history of poll taxes in the U.S. goes back to the Jim Crow era of segregation when they were levied on African Americans as a prerequisite for voter registration. The 15th Amendment outlawed such discrimination, but instead of doing away with poll taxes, certain states decided to impose them universally, thereby withholding political power from African Americans as well as women, other minorities, and the poor.
A universal, flat tax is what the two economists are accusing the U.S. healthcare system of imposing on all Americans, but this couldn’t be further from the truth. The burden of paying for healthcare isn’t evenly distributed across households — far from it.
A sixth of all U.S. healthcare spending comes from Medicaid, which is essentially financed by federal dollars. As of September 2019, over 71 million people were enrolled in Medicaid. Of those beneficiaries who work, many earn low wages, making their combined individual and employer Medicare contribution minimal — below $750 a year for a family of four earning federal poverty level wages. That’s a far cry from the alleged $8,000 toll tax these economists are claiming everyone is subjected to.
Our system also doesn’t prevent people from receiving care if they can’t pay for it. In fact, in 1986 Congress explicitly passed an act that forbids hospitals from turning away patients based on their ability to pay for care.
On the other hand, high earners pay a lot more than $8,000. An individual earning $200,000 will pay a total Medicare tax of $5,800 in addition to a family health insurance plan priced on average at $18,687, and they face a deductible well above $3,000. This means that such a household will spend nearly $25,000 on healthcare before having undergone a single medical procedure. But here again, despite the high figures, there is no proof for the existence of a uniform poll tax.
If anything, the penalties attached to the individual mandate were closer to a poll tax before they were eliminated in 2019. Still, those individuals and families covered by Medicaid hardly paid a dime toward healthcare.
To be sure, the government is a major reason why system-wide healthcare costs are so high. Mandated insurance benefits, government restrictions on the number of healthcare services provided in a given area, and burdensome licensing laws all contribute to keeping healthcare costs absurdly high. However, and this cannot be stressed enough, high costs aren’t a tax.
After the economists have lamented the supposed existence of a poll tax, they go on to accuse our system of the highest crime: it doesn’t even make people healthy. Life expectancy is lower in the U.S. than in most other similar developed countries, and that’s unjustifiable at our levels of healthcare spending, they say.
Sadly, the two economists forget that there’s a lot more that goes into life expectancy than just access to healthcare. We as a nation are the heaviest of our fellow developed countries, and almost half of us will be obese by 2030, according to a brand new Harvard study. We also have a slew of other problems: drug overdoses, suicide, and alcohol-related diseases. Even the best healthcare system can’t fix these societal and cultural issues.
Our system is far from perfect, and it does cost more per person than other systems in comparable countries. But calling these costs a “tax” gets us nowhere and is just plain wrong. We won’t find the right answer to the system’s problems with false claims and misleading headlines.
Elise Amez-Droz (@eliseamezdroz) is a healthcare policy associate in the Washington, D.C. metro area. She is a graduate of the Fuqua School of Business at Duke University.
