Essay by Felix Veritas*….
Sen. Mitch McConnell and Congress continue their ObamaCare repeal-and-replace floundering, highlighting the GOP’s lack of preparation for this debate.
However, that opens the door for new ideas outside the government-run healthcare box. One of these — which I mentioned previously — is Surplus Tax Incentives.
It’s simple, really. The government uses the tax code to not only raise revenue, but also encourage/discourage corporate activities. Want a company to do less of something? Increase taxes on said activity. Likewise, tax breaks encourage companies (and individuals) to do things more often.
If we want corporations donating more to charity and indigent hospitals — by all accounts, a noble and beneficial goal — use the tax code to encourage it. It’s not a hard concept.
As I wrote back in March, if ExxonMobil donated $50 million to a charity hospital designated as a targeted Surplus Charitable Recipient (at least 40 percent Medicare/Medicaid patients), Exxon would receive a 107 percent tax deduction, or $53.5 million instead of $50 million. The charity hospital could use the funds for capital expenditures, or for operational costs associated with uninsured or indigent patients.
Surplus Tax Incentives encourage hospitals to take Medicare, Medicaid, uninsured and indigent patients, countering the current hospital trend of minimizing low and non-paying patients. STIs also make it…well…profitable for corporations to give those qualifying hospitals money.
Per an article in ZeroHedge, ExxonMobil’s 2014 income tax bill was about $18 billion. Imagine if — instead of paying all that to Uncle Sam — they donated $10 billion in Surplus Charitable Donations and got the 7 percent additional deduction. ExxonMobil saves $700 million.
Think their board and shareholders are interested in that?
How many charity hospitals could we fund with $10 billion ($200 million per state)? How much money would it raise if ALL corporations made a 7 percent annual return on charitable donations?
I haven’t seen recent studies on the percentage of each tax dollar government bureaucracy swipes from the ultimate program recipients. However, it’s safe to say bureaucratic waste is higher than 7 percent. Clearly this plan increases efficiency as well as donations. More money going directly to beneficiaries and bypassing sticky-fingered bureaucrats is always a good thing, and Surplus Tax Incentives accomplish that.
So please, Mitch…please allow Common Sense an uncommon seat at the legislative table and consider Surplus Tax Incentives for the new healthcare bill. It’s a win for everyone, and those aren’t don’t come along very often in DC.
*”Felix Veritas” is the pen name for a resident of Mobile with an interest in policy and a gift for accessible prose. He and I are absolutely not the same person, and sometimes we disagree. I think it helps to have a few different voices here at this site. — Quin
