Thinking Honestly about Health Care, Welfare, and Taxes

By Kevin D. Williamson

Tuesday, June 08, 2021

 

Forgive my plucking a comment from the obscurity of Twitter to make an example of, but it is a useful one. In an exchange about health-care policy, a professor of political science at a major American university asked a familiar question: Why is it that some Americans apparently believe that the United States is incapable of managing a single-payer health-care system like France’s?

 

You’ll see the problem there.

 

The fact is that nobody actually knows whether France or the United States is capable of managing a single-payer health-care system, because neither country has single-payer health care. Not many countries do.

 

France’s health-care system is different from the U.S. system in important ways, but it is in other ways quite similar: It is based on insurance. As in the Swiss system and the original version of the Affordable Care Act regime, that insurance is compulsory. Patients pay for their health care and then are reimbursed — but not for the full amount — by their insurers. The French generally have to consult with a general practitioner before being referred to a specialist, they must pay lab fees, etc. About a quarter of the hospitals are for-profit and the rest are either private nonprofits or public. There is an extensive system of subsidies and price controls. What the French do not have — and what almost none of the countries of Western Europe and few countries around the world have — is single-payer, a public-monopoly model of health care found in the United Kingdom, Canada, Norway, the United Arab Emirates, and a few other countries.

 

There is much to admire in European governance and much that Americans — conservative and progressive both — could learn from the successes of Western Europe and the Nordic countries in particular. It also is the case, I’m afraid, that a great deal of American thinking about European governance is based on the experiences of tourists and business travelers. If all you ever saw of Europe was the nice parts of Amsterdam, the nice part of Zurich (which, in fairness, is called “Zurich”), the Louvre, Kensington, etc., then you might indeed share Thomas Friedman’s view of the world, that when it comes to cities and infrastructure, we are the Flintstones compared with the Jetsons abroad. Friedman originally made that observation after flying from Hong Kong to JFK — but you get much the same sensation flying from Schiphol or Geneva or, in spite of the Italian reputation for organizational dysfunction, Leonardo da Vinci–Fiumicino. But journey out into the exurbs of Amsterdam or Rome and you’ll see a very different world. There are many Americans who would be happy to trade our problems for those of the Netherlands or Sweden, and many who would not. The more you know, the less obvious it is: Silicon Valley tech types with impeccably progressive credentials bemoan the persistently dirigiste model of business in Western Europe.

 

Which is to say, in order to learn from European practice, it is necessary to understand what it is the European actually do — and, of course, there is no “European” model of health care: Sweden and Switzerland have very different systems. But American progressives, and a surprising number of conservatives, believe that Europeans can simply go to the doctor and receive free treatment with no copays, cost-sharing, or medical bills, simply because their governments aren’t dominated by mean meanies like Mitch McConnell or the memory of Paul Ryan. (I really do wish that Paul Ryan had had the lasting effect on American governance that his progressive critics attribute to him — the country would be better for it.) There are many European systems, but most of them look more like Obamacare than they do the National Health Service in the United Kingdom. Even Norway has an annual deductible.

 

That isn’t an argument against single-payer in and of itself. It’s an argument against lazy thinking and mindless tropes.

 

Another perennial favorite is the idea that the Europeans can afford their relatively generous welfare states because they freeload on the American military presence in Europe, that NATO is a subsidy for European social programs. That isn’t really true, either: France, which is Europe’s biggest social-welfare spender, is also its biggest military spender. Sweden, famous for its comprehensive welfare state, announced in December that it will increase its military spending by 40 percent in the near future. The United Kingdom and Australia manage to fund their single-payer health-care systems even as they spend a larger share of GDP on defense than does China. While it is the case that most of our NATO allies fall short of the 2 percent benchmark for military spending, the European countries aren’t really the outliers when it comes to defense. The United States is at the high end, along with Russia, Israel, and Saudi Arabia, while pacifistic Japan brings up the rear. Of course, it matters what you choose to count: Defense as share of GDP gives one measure, defense as share of government spending gives another: Thrifty Singapore has a relatively small public sector, but it dedicates about a third of its spending to the military, while the United States earmarks far less of its budget for the military, choosing instead to fund entitlements such as Social Security and Medicare.

 

But you’d be surprised how very little worldly people know about the world, and how much of our political discourse consists of “I went to Copenhagen once and it was really nice so let’s have socialism.” It is bananas. When I was covering Bernie Sanders’s bad-granddad presidential campaign in Iowa, an enthusiastic Sanders supporter told me that she was hoping to move with her husband to a socialist country. I asked her which one. She said: Germany — the place where Porsches come from, a thoroughly capitalistic, trade-oriented country that has been governed by its conservative party since Billie Eilish was in preschool.

 

The big difference between the United States and most of the wealthy European countries isn’t defense spending, and it isn’t single-payer health care — it’s taxes. Sweden can afford a magnificent welfare state because middle-class Swedes pay much higher taxes than do middle-class Americans. That’s the most remarkable difference between American and European practice. In both contexts, the poor are taxed relatively lightly while businesses and high-income people are taxed at comparable rates — the top individual tax rate in France is 45 percent vs. 37 percent in the United States. (N.B.: There is much more to a tax system than statutory rates.) But in the United States, the bottom half of all earners pay almost no federal income tax, while the broad middle is very lightly taxed by world standards. The share of taxes paid by the top 10 percent of income earners in the United States is nearly twice what it is in France. And that’s not because we tax the rich more, but because we tax the middle class less.

 

And that is one of the reasons why there is such a market for cultivated ignorance among those who would prefer to have a much larger welfare state. I have never encountered a single Democratic politician of any consequence who is willing to forthrightly admit that paying for a European-style welfare state will necessitate European-style taxes on the middle class. Even Bernie Sanders, who comes as close to admitting this as anyone on the national stage I’ve seen, mostly pretends that it isn’t the case and that we can pay for everything by jacking up taxes on Jeff Bezos, a couple of Wall Street guys nobody likes, and the members of the “allah-garchy” he is always honking about.

 

We can’t have a useful debate about the real choices in front of us unless we are willing to be honest about what those choices are. And it’s a damned rare specimen in Washington who is willing to face those facts — even in private.