The glory of great men should always be measured by
the means they have used to acquire it.
Francois de La Rochefoucauld
While the Private Sector Creates Lower-Price Goods,
Government Intervention Has Created a Healthcare Bubble
Mark Perry of Carpe Diem has recently posted a series of segments favorably comparing the number of man hours it takes for the average worker to acquire a higher quality counterpart today to consumer goods and services. in the 1950's. Chris Conover at Forbes extends the point to healthcare (my edits):
While time prices for other goods and services had shrunk to less than one quarter of their 1958 levels, time prices for health care had more than quadrupled! In 1958, per capita health expenditures were $134. This actually includes everything, inclusive of care paid for by government or private health insurers. A worker earning the average wage in 1958 ($1.98) would have had to work 118 hours—nearly 15 days–to cover this expense. By 2012, per capita health spending had climbed to $8,953. At the average wage, a typical worker would have to work 467 hours—about 58 days.Granted, some of that is a quality trade-off and an older population, but a lot of it has to do megalomaniac public policy that has perverted the concept of insurance, where economics illiterate politicians/demagogues run on perverse, unsustainable, negligently, even intentionally underfunded public policies: "free annual exams", "free birth control", filled doughnut holes, below-cost premiums, cost-shifting from the government to a shrinking private sector, subsidized "all-you-care-to-use" health services, convoluted cost accounting, and other socialized costs: special-interest benefit mandates (e.g., fertility treatments).
A Note on Taxes to the Economically Challenged
(i.e., Progressives)
I guess I had an epic rant in yesterday's post on talk soup because it got 4 times the normal number of hits: either a lot of people agreed with me, or I managed to annoy progressives or both.
Just a side note: if ABC This Week's panel has anyone whom annoys me more than Keynesian economist Paul Krugman [I recently contacted a George Mason economics professor I've cited asking why he hadn't responded to an absurd Krugman column waxing enthusiasm over 90-odd percent tax brackets during the 1950's, the economist tersely replied that he was very busy and just tracking Krugman's nonsense is a full-time job in itself], it's another overrated progressive commentator, Katrina vanden Heuvel, whom repackages all the same predictable tiresome polemical progressive spin she can deliver in one breath, sort of a pretentious Debbie Wasserman Schultz wannabe. Poor George Will is typically outnumbered; he likes to set up his point of view and has a less direct personal style. Quite often the round table is dominated by progressive groupthink; Stephanopoulos surprises me at times by keeping the discussion in check.
When I hear the progressives cheer Obama's "genius" in proposing a middle class only tax cut extension, they think he's boxed in the GOP, making the Dem the Party of Middle Class Cuts. No, I think Obama has proven his hypocrisy: his point is the cuts don't pay for themselves, but he offers no alternate spending cuts and/or revenues to pay for the these cuts, three-quarters the amount of the Bush tax cuts.
Obama is totally ignorant of Hauser's law: tax receipts since the Depression have typically leveled off at about 20% of GDP (naturally less during recessionary periods) despite widely changing upper-income rates. But another disingenuous piece of political spin is that the top earners aren't paying their "fair share" (as if somehow nearly half of earners pay NO federal income tax and many are net beneficiaries are pulling their own weight!), but let's jog Mr. Obama's memory:
Six decades of history have established one far-reaching fact that needs to be built into fiscal calculations: Increases in federal tax rates, particularly marginal rate increases targeted at higher income taxpayers, produce no additional revenue. For politicians this is truly an inconvenient truth. According to the Tax Foundation, the tax burden of the rich has been steadily growing. In 1987, the top 1 percent paid nearly 25 percent of the federal income tax burden; now they pay nearly 40 percent. Thus incomes for the wealthy have grown, but so has their share of federal income taxes. But suppose those earning $250,000 or more were taxed at a marginal rate of say, 80 percent. This would still be not be enough to close the gap on the federal government’s runaway spending.In fact, predicted revenues from class warfare tax hikes are typically overstated. Why?
The tax base is not something that the government can kick around at will. It represents a living economic system that makes its own collective choices. In a tax code of 70,000 pages there are innumerable ways for high-income earners to seek out and use ambiguities and loopholes. The more they are incentivized to make an effort to game the system, the less the federal government will collect. That would explain why, as Hauser has shown, conventional methods of forecasting tax receipts from increases in future tax rates are prone to over-predict revenueWhy then keep tax bracket rates low? Because high taxes impair economic growth.
French Court Rules Hollande's 75% Top Rate Unconstitutional
The decision was based on the alternate household distributions yielded different tax obligations.
Musical Interlude: Christmas Retrospective
Celtic Woman, "We Three Kings".The harmony is lustrous, and the bagpipes are awesome: my second favorite track to "Hark the Herald Angels Sing".
