You’re right. Many commentators take a simplistic view of taxation. The incomprehensible tax code leaves them defining “rich” effectively as “having the greatest taxable income” and for some reason exclude payroll tax, a parallel income-tax system levied against certain classes of income under a different name.
Health insurance isn’t a tax, but it is a valuable benefit and an important part of many compensation packages. You generally should include health-insurance benefits as income. Our bizarre income tax system usually considers health insurance intangible non-income for employees who receive it as an employment benefit unless they’re self-employed. This tax treatment of health benefits in addition to the ridiculous complexity of the tax system creates enormous barriers to entrepreneurship.
But defining the “rich” as those with great taxable income includes many Americans who aren’t rich at all because they incurred taxable income while suffering a foreclosure or repossession, depleting a retirement account to pay for food and medical care necessary for basic survival, or fell into another nasty tax trap. This definition of “rich” also excludes the extremely wealthy who easily flaunt various loopholes in the tax code to increase their wealth enormously without incurring taxable income or while incurring relatively much less taxable income. Certain offshore bank accounts, tax-free municipal bonds, and other investments fall into these categories.
These extremely wealthy people also often hire lobbyists and donate money to political campaigns; Distinguished Members of Congress then insert special obscure provisions in the tax code to exclude certain specific activities from taxation. The extremely wealthy benefactors and close relatives of Congressmen then receive an enormous payback in the form of reduced taxes or subsidies disguised as taxes, often hundreds or thousands of times what they spent on lobbying and political contributions. Ordinary Americans might consider such activity a form of bribery and corruption, but Congressmen view these activities as instruments of good public policy from which ordinary people will reap even more enormous benefits through some economic theory or some such.
A national retail sales tax sounds like a great idea but unfortunately will fall victim to such corrupt bargaining in very short order if enacted. We need ethical Congressmen, without that phrase representing the quintessential oxymoron. Or in default of that, we need some movement toward lower spending. Or in default of that, we need some automatic tie between spending and taxation. Whenever Congress decides to increase spending or creates a new tax loophole for a few rich donors or borrows/prints more money than the Treasury has, then he general decree expropriation rate should rise automatically to supply the lost revenue.
In theory, yes. I had my eyes opened during a recent hospital stay. My roommate was a construction worker who took has wages under the table. In official records he was an indigent. In actuality, he earned at least if not more than me as he kept all his earnings. So who payed for his medical care? His medical care was mandated by the state. He filled out paperwork for the state to pay (me). I won't be surprised if we someday learn that hospitals bury a portion of their overhead expenses into costs paid by insurance companies. The cost of my health insurance is so high, I suspect that it goes to pay for others. The really extraordinary thing about this episode is the construction worker made no attempt to hide this from me. He was confident that the authorities did not care. To me, his free care and my health insurance premium ($23K a year for a family of four) leads me to claim this is now a privately collected tax mandated in part by free healthcare for the indigent.