Imagine if a single piece of legislation could effectively eliminate all U.S. corporate taxes, subsidize hundreds of millions of dollars in new corporate investment, increase the take-home pay of most U.S. employees, ease state and local budgets, and reduce the U.S. trade deficit — all without increasing the federal budget. It sounds completely impossible, but it is not: All we have to do is put aside the moral and political debates about Obamacare and recognize our health care system for what it is: a burdensome and unnecessary tax on corporate America. Eliminating this tax by shifting all responsibility to the federal government under a single-payer system would create a massive economic stimulus, providing Democrats with the universal coverage they seek while offering corporate America a far greater stimulus than any proposed Republican tax cut.

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Imagine if a single piece of legislation could effectively eliminate all U.S. corporate taxes, subsidize hundreds of millions of dollars in new corporate investment, increase the take-home pay of most U.S. employees, ease state and local budgets, and reduce the U.S. trade deficit — all without increasing the federal budget.

It sounds completely impossible, but it is not: All we have to do is put aside the moral and political debates about Obamacare and recognize our health care system for what it is: a burdensome and unnecessary tax on corporate America.

U.S. companies pay $327 billion in income taxes, but they pay $1.1 trillion — more than three times as much — in health insurance costs. No other OECD country imposes anything close to such a heavy “health care tax” on its businesses. Eliminating this tax by shifting all responsibility to the federal government under a single-payer system would create a massive economic stimulus, providing Democrats with the universal coverage they seek while offering corporate America a far greater stimulus than any proposed Republican tax cut.

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After all, when the 2017 Tax Cuts and Jobs Act (TCJA) lowered corporate tax rates by 40%, saving corporations an estimated $950 billion over a decade, it created an immediate economic stimulus that bolstered corporate earnings and pushed the stock market to record heights. Eliminating the corporate health care tax would free up more than a trillion dollars of corporate earnings every single year, a stimulus 10 times more powerful than the TCJA.

Transferring all responsibility for health care to the federal government would not only offset 100% of what companies now pay in income taxes, it would provide an additional $773 billion a year in immediate bottom-line corporate profits that would be available for new investment. (Depending on how companies use these funds, they may end up paying tax on their increased profits, but even so, the net increase in after-tax income would substantially exceed their total taxes.)

The magnitude of this stimulus is hard to comprehend. It is comparable in scale to the $835 billion emergency Troubled Asset Relief Program (TARP) bill signed in 2008 that helped the United States recover from the worst economic crisis in our lifetime — but it would put that much money into the economy every single year. In fact, such a health care stimulus bill would dwarf any previous economic stimulus effort in modern times.

Wouldn’t shifting responsibility for health care to the government simply add a trillion dollars to the government budget? Not according to economic studies and the experience of other countries. Studies have shown that a single payer plan would save over $900 billion a year, eliminating more than 80% of the costs now borne by employers.

Much of this saving would come from reducing redundancy and inefficiency in seven areas: unnecessary services ($210 billion), inefficient delivery of care ($130 billion), excess administrative costs ($190 billion), inflated health care prices ($105 billion), costs from the failure to pay for preventive care ($55 billion), and fraud ($75 billion), and running Medicare and Medicaid as separate programs ($136 billion). Other studies have suggested that billing and insurance-related administrative costs would fall by 70% or more. After all, private insurance overhead averages 12.1%, compared to 2.1% for single-payer Medicare. Countries with single payer systems spend an average of 8.5% of GDP on health care vs. 18% by the United States. If administrative overhead were to drop to the level in Canada’s single-payer system, that alone would save $400 billion. Add to this the potential increase in tax revenue that would come from the growth in corporate earnings and wages, and the entire cost of eliminating the corporate health care tax could be fully offset.

Unlike the TCJA, which the Office of Management and Budget (OMB) estimates will add the full amount of corporate savings to the federal deficit, a health care stimulus bill would offer far greater corporate savings with no net impact on the federal budget. Such a stimulus plan would not only increase corporate profits but would also strengthen our economy in multiple ways.

Wage growth. The economic recovery has not translated into wage gains for the average American worker. Worker productivity grew 72% in the 1973-2014 period while median pay rose only 9%. In real dollars, the median income of middle-class households declined from 2000 to 2014 by 4%. Although there has been modest improvement in recent years, one of the largest drags on wage growth has been the increase in health care costs, which have taken an ever-larger bite out of workers’ take-home pay. Ninety percent of CFOs polled agreed that reducing health care costs would enable them to increase wages. Shifting the entire cost of health care to the federal government would eliminate the employee contribution to employer health care plans and would immediately raise the take-home pay of 156 million U.S. employees by an average of $1,443 per year.

Consumer demand. The stimulus effect of a broadly distributed increase in take-home pay would be far greater than the effect of the TCJA. It is estimated that 60% of the benefit of the TCJA went to stockholders rather than to employees or new capital investment. This increase in wealth went overwhelmingly to the top quintile of households that own 92% of all stocks. Studies show that wealthier households tend to save or invest the extra money that comes their way, dampening its impact on the overall economy.

A broad-based increase in wages for the average worker, however, immediately translates into increased consumption that has a much greater stimulating effect on the economy. The Congressional Budget Office estimates that a onetime increase of a dollar in income would result in 84 cents of increased consumption by those in the bottom third of income distribution and 57 cents by the middle third compared to only 30 cents of increased consumption by the upper third.

Balance of trade. The United States has recently imposed massive tariffs on foreign goods in an attempt to reduce the trade deficit. The health care tax, however, puts U.S. companies at an even greater global competitive disadvantage. For example, U.S. automobile manufacturers General Motors, Chrysler, and Ford estimate that health care costs add between $1,100 and $1,500 to the sticker price of every car sold. By contrast, Toyota’s financial statements indicate that health care is not a material cost that is even worth reporting.

Corporate leaders know this well: 93% of CFOs, in a recent survey, agreed that the high cost of health care in America gives foreign companies a competitive advantage. Harold McGraw III, CEO of the McGraw-Hill Companies and chairman of Business Roundtable, declared that “health care costs are one of the top cost pressures… hurting America’s ability to compete in global markets.” Add to that the impact of poor health on productivity for employees that do not have coverage. And, unlike the tariffs that hurt U.S. farmers and many domestic industries and also lead to retaliatory tariffs from our trading partners, eliminating the health care tax would simply level the global playing field without any negative consequences.

Easing state and local government budgets. State and local governments have been increasingly squeezed by growing health care costs. A Pew study found that state and local governments were spending 31% of their revenues on health care by 2012. And a “baseline” projection by the Brookings Institution found that, by 2034, the increased health care burden on state and local governments “is more than the entire amount that states and localities spend on police and prisons annually. And it is almost as large as spending by states and localities on highways and the judicial system combined.”

Without the federal government’s luxury of deficit spending, state and local governments have had to compensate for increasing health care costs by cutting spending in other critical areas. In many states, teacher salaries, school budgets, hiring and wages for police and fire departments, and numerous other essential services have already suffered, and the ability to continue, let alone expand, these services is in jeopardy. Relieving state and local governments of their health care burden would immediately free up billions of dollars that could be used for better schools, safer streets, and emergency services.

Universal single-payer healthcare would also save lives and reduce suffering for millions of people, a massive benefit not to be overlooked. And the idea of federal government providing single-payer universal coverage is already gaining popular support with a majority of Americans. But leaving aside issues of humanitarian concern or political popularity, the economic case alone justifies Congressional action. Repealing the corporate health care tax would be a massive economic stimulus that singlehandedly addresses many of the nation’s toughest economic challenges. It might well be the only economic stimulus that could satisfy both parties, boosting the stock market and corporate earnings while providing meaningful economic and health benefits at every income level across America.

If Congress moves to act on this idea, we can expect health care insurers and providers to lobby hard to protect their profits, since much of that $900 billion in savings will come out of their revenues. But there is no reason the health care sector, representing 18% of our economy, should be entitled to impose a tax on the other 82%, especially when that tax undermines our global competitiveness, undercuts wages, inflates our deficit, and compromises essential public services.

As the midterm elections draw closer and the economy tries to sustain the longest bull market in our history, politicians know well that an economic decline is the surest omen of a change in political power. Republican leaders have proposed a second round of tax cuts in an effort to further stimulate the economy, while progressive Democratic candidates are promoting the radical idea of “Medicare for all.” Each side is deeply entrenched in its own political ideology and utterly rejects the views of the opposing party. But there is a single solution that fulfills both parties’ most deeply held goals: repeal the corporate health care tax.