In doing a little research into our health care situation or should I call it the disaster it is, I wondered how it was that all other industrialized nations on the planet were able to provide health care to their entire populations without them worrying about grandma getting capped. It seems years ago long before any economic bubbles and bursts countries took it upon themselves to come up with a slightly different tax system. The VAT or value added tax was put in place to pay for things like health care and education. Simply put when a supplier of a part or material sells it to the manufacturer of a good sold to a consumer each step of the process gets taxed as it's value increases. The odd thing as I see it is that as that tax gets passed along the manufacturing chain and the next in line gets a credit against the tax that was added. So in the end each piece in the chain is paying a little bit to the government in taxes. This VAT is in addition to the state or provincial sales tax on an item. Food and medical items are exempt. This VAT on goods runs between 5% to as high as 25% for everyone in the industrialized world. There are exceptions and reductions for certain items. This would be much like write offs for business and mortgage deductions in our income tax code.
The only thing I don't like about this system is that it would require business to do extensive accounting of all the products they produce. It would become a nightmare for a company producing thousands of products like a small parts manufacturer. But the concept of adding some type of tax to pay for healthcare would sure solve a bunch of problems. Now you might be thinking just what we need more taxes. But consider it this way. If we get the insurance monkey that's getting bigger by the year off corporate Americas' back and ours as well by spreading the costs over a broader area it would work as it has in so many other countries.
At a 5% rate it would cost the average wage earner around $400 per year. Those making less than $20,000 could get a rebate or exemption. Then there's the inequities when our companies export to countries with a VAT. U.S. companies must pay that VAT to a foreign government while most foreign governments have exemptions for exports by their companies. But don't have too much sympathy for our companies as they have been hiding corporate profits by avoiding paying their fair share of taxes with off shore dummy companies. A receptionist in a small office in the Cayman Islands does not count as an over seas division of a company. Once we can work out some of these little details can all the hidden money come out to fund health care.