The health care bill presented by the House leadership this week pays for the health insurance of the 20 percent of the people who cannot afford it with a surtax on the richest 1 percent.

Nothing like this has ever emerged from the leadership of a U.S. Congress.

At best, throughout American history, Congress has, under pressure from labor and the peoples’ movements, closed various tax loopholes for the rich, given tax credits to workers or created programs like Medicaid for the poor. The programs for the poor were paid for with funds raised from a progressive income tax system that everyone pays into, and never by any type of transfer of wealth from the rich to those in poverty.

It is a testimony to the power of the massive labor-led coalition that has been battling for health care reform that the House is saying, for the first time ever, that those in society who can afford it should pay for the health insurance of those who cannot.

While the right wing is doing everything and anything, including coughing up blood, in its effort to kill the proposal, the labor movement is out there telling everyone how fair it really is.

“The wealthiest 1 percent of American households take home 20 percent of all income in the country – the highest percentage since the time just before the crash that started the Great Depression,” said the AFL-CIO in a statement it released after the Senate health committee approved its version of a health care reform bill a day later.

The federation noted that, unlike the House bill, the Senate’s health committee bill “does not address financing.” Labor is calling upon the Senate to adopt a bill that includes the House’s funding strategy.

“Instead of taxing working families’ health care benefits, as some senators propose, the House bill lands on the side of fairness. In most cases, all or a large part of the surcharge (on the rich) is offset by the savings they will realize from comprehensive health care reform,” says the AFL-CIO.

That point is well taken because many of the lawmakers most opposed to taxing the rich have been leaders on the bandwagon calling for taxes on workers who currently have employer provided health insurance.

The AFL-CIO points out that no one making less than $192 (yes, that’s one hundred and ninety two) an hour would be affected by the surcharge.

The right wingers in the Senate say the House funding mechanism is a deal breaker they can never support because it means more taxes for the very people who supposedly invest, innovate, hire and thereby keep the economy humming along. The result, they claim, will be to hurt everyone, including the working people and poor who the plan means to help.

Robert Reich, Secretary of Labor during the Clinton administration, countered that argument today when he said, “There’s no reason to suppose that taking a tiny sliver of the incomes of the top 1 percent will reduce all that much of their ardor to invest, innovate and hire in the future. Yet if this tiny sliver means affordable health care for a far larger number of Americans, who will be able to get regular checkups and stay healthy and productive, the positive effect on the American economy is likely to be far greater.”

Another major argument conservatives are making against the House funding mechanism is that it will hurt small businesses.

The facts are that less than 5 percent of small business owners would be paying any surcharge.

Only the profits of a small business would be taxed. A couple whose income comes entirely from a small business would have to earn more than $350,000 in business profits, after paying all their expenses, including salaries, before the surcharge would affect them at all.

Still not willing to cede the point, right wingers say, “even so, it will be a job killer because it will reduce the incentive small businesses have for expanding and hiring more workers.”

This argument also is false because those add-on workers are paid out of pre-tax income.

Purchasing of new equipment by small businesses would also not be discouraged because most small businesses can write off up to $250,000 of the costs of such equipment.

The AFL-CIO summed it up this way: “A small surtax on the wealthiest 1 percent buys health care reform for America. That’s not much to finally get a handle on costs that are dragging down the entire economy. Even the wealthy will get a big chunk of their money back in savings. Their premiums won’t go up as fast, and no one will have to pay the hidden $1000 insurance premium add-on to cover costs for uncompensated care. The House health care surtax is a fiscally responsible investment. It will pay steady returns every year.”

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