Bobby Jindal’s Attack on Scott Walker’s Health Plan Is Off-Base
By John R. Graham • Monday August 24, 2015 9:40 AM PST •
Yesterday, I wrote a column at Forbes addressed Governor Scott Walker’s health plan in largely positive terms. Governor Bobby Jindal, a competing Republican presidential contender, has launched a broadside against Walker’s plan, describing it as a “new federal entitlement.”
The charge is way off-base. Governor Jindal proposed a health reform back in 2014, via his America Next policy shop. The point of contention is that Governor Jindal’s proposal would not offer everyone a refundable tax credit. Instead, it would eliminate the exclusion of employer-based health benefits from taxable income and replace it with a standard deduction.
I discussed the proposal when it was issued. True, it is an easier switch than a refundable tax credit. On the other hand, a deduction does nothing for low-income households – which means the welfare state continues to exist. Governor Jindal himself proposed throwing $100 million more at states to fund their medical safety nets.
You can say (and I might agree with you) that the federal government should get out of the safety-net business. Nevertheless, the federal government is an income-tax devouring and debt-generating machine. As long as it remains so, states and citizens will call upon it fund welfare programs.
The tax treatment of health benefits must follow the tax code. It cannot lead it. Governor Jindal has not proposed a massive overhaul of federal taxation. Even Senator Rand Paul’s proposal to rip up the IRS and start again would give us a 14.5 percent flat tax on household incomes above $50,000 (for a family of four). The federal government would remain the dominant tax collector and still fund welfare programs.
My view is that the federal government should fund a tax credit for every household. For those who cannot or will not use it to pay for their own health care, the government can use it to fund Medicaid. (See John C. Goodman, A Better Choice, especially p. 58.)
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For the pivotal alternative to Obamacare, please see A Better Choice: Healthcare Solutions for America by John C. Goodman (Independent Institute, 2015).