By NextBestFitValue-added tax
A broad consumption tax dedicated to health.
Draft decision:RejectedConfidence: medium · not yet reviewed
Regressive without rebates; mix chosen.
Review ledgerHow this path connects
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Enact a VAT dedicated to health with per-person rebates
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
The question it answers
Replacing premiums with taxesA broad health consumption tax can raise substantial revenue at low rates and is hard to avoid, but is regressive unless paired with rebates.
What it fixes
None identified.
What it creates or worsens
- Adds paperwork, coordination, or complexity
Collecting a dedicated consumption tax requires a new collection system.
Who's affected
Who gains
None identified.
Who loses
None identified.
Other ways to soften the losses
- Per-person rebate
Where it has been tried
- Most OECD countries: VATs fund large shares of public spending.
- OECD countries: Across OECD countries that levy a value-added tax (all except the U.S.), VAT revenue accounted on average for almost 22% of total tax revenue in 2022, serving as a primary pillar of public finance.Sources: Tax Foundation (2024)