All corporations and individuals, except for those making less than $20,000 a year, pay 10% tax on gross income (whether it is from salaries, wages or investments). All corporations and individuals who make more than a million dollars pay a 2% tax on gross income above a million dollars. If you get caught cheating you pay 30% for 3 years. Defense spending is pegged to GDP and you aren’t allowed to spend more than 25% on it.
Health care costs get split into two systems: one public, one private. Creating these systems is easy. The hospitals that the government already owns (including through state universities) are the public ones. Public health care has some costs that are fixed. Everybody that works at a public hospital makes between 50 and 250 thousand dollars. Everyone who makes less than $20,000 gets free health care. Everyone else can enroll in a government sponsored high deductible plan. Government subsidies for health care can’t exceed 20% of GDP. High cost end of life care and high cost lifestyle care (treatment for your cancer if you smoked etc.) are the first things that gets rationed in the public system.
Update: disregard everything in this post and read this: http://www.thepeoplesview.net/2011/08/paul-krugman-is-political-rookie-or-how.html