Equity in health care funding

By:

Jeyakumar Devaraj

Affiliations:

Parti Sosialis Malaysia / Peoples Health Forum

Policy Code:

3e Economic Justice

Problem Statement:

The competition among countries for investments has led to the decrease of corporate taxes. In Malaysia corporate tax has been reduced from 40% of profits in 1988 to its current 24%. The ASEAN countries are engaged in a race-to-the-bottom with regard to corporate taxes with Singapore at 18%.

The reduced income from corporate taxes has resulted in insufficient funds for expanding the social net in Malaysia and in other ASEAN countries. It has also led to repeated attempts to obtain finds from the general public via a special health tax or a mandatory health insurance.

The problem is that wages in Malaysia are low - only about 1/6 of the wages in Western countries. Many families are struggling to make ends meet. Putting an additional tax on working people would be unjust.

Value(s) and Belief(s):

The current distribution of wealth in Malaysia and in the world is unjust. Far too much is going to the top 1%
There is a need to stop tax evasion and the race-to-the-bottom in corporate tax rates.
There is a need to increase the "social wage" eg subsidised health care

Proposal of Solution:

Reject Health Financing Schemes that rely on contributions by the general public either through an EPF like mandatory contribution or a mandatory health insurance scheme.

The nation should focus more on how we can increase tax income from taxing corporations and the richest sections of society. This might have to be done in conjunction with other countries in international networks like ASEAN, Group of 77, UNCTAD and the UN.

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