A new study looking at potential health impacts of tax proposals suggests the current Republican proposal in Congress being backed by President Donald Trump is exactly the opposite of what is needed if lawmakers want a policy that can reduce the total number of Americans that die each year.
"The take-home message from this study is that policies that both substantially raise federal income tax rates and redistribute tax revenue appear needed if we want to see big reductions in the total numbers of Americans that die each year. Current tax proposals through the House and Senate fall well short of these top rates and do not include redistribution." —Prof. Daniel KimGiven GOP tax proposals making their way through Congress, professor Daniel Kim, who studies public health at both Northeastern University and Paris Descartes University in France, says that "it is critical that policymakers consider the potential public health implications of these tax reforms."
For the study, published Monday in the journal Preventive Medicine, Kim compared current law with tax proposals put forth by then-candidates for the 2016 presidential election Bernie Sanders and Donald Trump. He also looked at a modified Sanders plan that includes a higher marginal tax rate of 75 percent for those with incomes above $500,000—a rate that is "not without precedent," Kim writes, noting the time periods 1964 to 1981 and 1944 to 1963. He also looked at a modified Sanders plan that combined the higher tax rate with redistribution of revenue from the highest three tax brackets to households with after-tax incomes of less than $40,000.
"The take-home message from this study," said Kim, "is that policies that both substantially raise federal income tax rates and redistribute tax revenue appear needed if we want to see big reductions in the total numbers of Americans that die each year. Current tax proposals through the House and Senate fall well short of these top rates and do not include redistribution."
An important note, Kim writes, is that there appear to be "broad similarities" between candidate Trump's proposal and the current House and Senate versions.
Using tax records from the Internal Revenue Service and available research on income and inequality associations with mortality, Kim projected that the Trump plan would increase inequality and lead to an increase of 29,689 deaths per year from all causes. The Sanders plan, meanwhile, decreased inequality and was projected to decrease the number of deaths from all causes by 31,302 annually.
The two modified versions of Sanders' plan brought far greater decreases in the number of deaths per year. The plan modified with a higher top tax rate was projected to lead to a decrease of 68,919 deaths per year from all causes, while the plan that also included redistribution of resources would result in a decrease of 333,504 deaths per year from all causes, with 188,799 of those lives saved as a result of the lowering of income inequality and 144,705 as a result of the increase in absolute income.
"At this critical time of tax reform," noted Kim, "widening gaps between the rich and poor, and growing public support for higher taxes and redistribution to combat inequality, policymakers should consider joint federal tax and redistributive policies to reduce the burden of mortality among Americans."