Healthcare tax

Reader's View
Page 2 

Your spotlight on healthcare mentions that healthcare accounts for a rising proportion of GDP in most countries (Observer, No. 29, November 2001). No doubt ageing is one factor and it is easily measured, but it is by no means the only one. We all know that medication and medical treatments are becoming ever more sophisticated and as a result more costly, regardless of whether the patient is young or old.

Unfortunately, this factor is very difficult to measure accurately and is not often cited as a cause of the rising cost of the whole system. But there can be little doubt that good healthcare is very important to most people and a lot more important than many of the other projects financed out of taxes. Governments might ask themselves which activities might be reduced, so that the resulting savings could be allocated to healthcare. Such a move would probably prove popular.

Another possible way of making the cost of healthcare more acceptable would be a clearly designated “health tax”. Any health tax would have to be tailored to each country’s general tax system. In Canada, for instance, the cost of healthcare is divided between the federal and provincial governments and there are federal and provincial sales taxes, which are added to the price of whatever you buy. It should not be too difficult to make these taxes explicitly “health taxes” and channel them in that direction – provided, naturally, that you can get the federal and provincial governments to agree. Another option would be to dedicate taxes on unhealthy” items, such as alcohol, tobacco and possibly even gasoline, to healthcare. I rather think that a health tax would be more popular than the present taxes that people have to pay while they have no idea where the money goes.

O. Fisher, Ottawa, Canada

©OECD Observer No 230, January 2002 

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