Eugene Steuerle on Medicare
Eugene Steuerle of Urban published an interesting piece on Medicare funding at http://taxpolicycenter.org/publications/url.cfm?ID=901397 . I will share my comments to him below:
This is one of those circumstances where fundamental tax reform is an advantage. If social services (health, education, welfare, child tax subsidies, housing tax and direct subsidies) were funded by a single, VAT like, employer income tax to replace the Corporate Income Tax, individual income tax filing of business and farm income, certain payroll taxes (dealing with OASI60+ separately) and low rate income taxes not otherwise shifted to a VAT (which would cover discretionary spending). If you build in tax benefits, like retaining the Health Insurance exclusion and the Child Tax Credit, the rate would be about 33%. It would certainly capture everything.
It is not entirely inappropriate to make workers pay this, rather than having it be a savings plan. In absence of any plan, parents would likely be covered under the policies of their grown children. There is no rational reason for children with dead parents or from large families to get an undeserved windfall or for single-children to be required to cover their parents (and if widowed from another single-child) their in-laws as well.
The advantage of using an indirect employer paid tax is that individuals don't have to see it in their pay (minimizing pressure to make spending pusilanimous) and because it can be used to facilitate privatization - with employers providing services instead of the government - either employee health or even retiree health (provided their is some form of beneficiary-market so that the last employer is not stuck with the costs of someone who worked most of their career for another employer).
On the local level, employers could cover charter schools or private schools rather than the public system - either at the option of the employees as donors or by funding tuition directly.
Younger employee training could be covered by the employer rather than the taxpayer and the parents (incentivizing childbirth so that no-one need limit family size because of feared college costs).
You could even have donation to non-public adult education providers for either employees, potential employees or to satisfy donor preference - and pay the trainees for their attendance - rather than having a TANF program.
All these offsets could reduce the business income tax levy to zero, but make sure services are provided - likely by a better provider with a less leaky bucket.
This is one of those circumstances where fundamental tax reform is an advantage. If social services (health, education, welfare, child tax subsidies, housing tax and direct subsidies) were funded by a single, VAT like, employer income tax to replace the Corporate Income Tax, individual income tax filing of business and farm income, certain payroll taxes (dealing with OASI60+ separately) and low rate income taxes not otherwise shifted to a VAT (which would cover discretionary spending). If you build in tax benefits, like retaining the Health Insurance exclusion and the Child Tax Credit, the rate would be about 33%. It would certainly capture everything.
It is not entirely inappropriate to make workers pay this, rather than having it be a savings plan. In absence of any plan, parents would likely be covered under the policies of their grown children. There is no rational reason for children with dead parents or from large families to get an undeserved windfall or for single-children to be required to cover their parents (and if widowed from another single-child) their in-laws as well.
The advantage of using an indirect employer paid tax is that individuals don't have to see it in their pay (minimizing pressure to make spending pusilanimous) and because it can be used to facilitate privatization - with employers providing services instead of the government - either employee health or even retiree health (provided their is some form of beneficiary-market so that the last employer is not stuck with the costs of someone who worked most of their career for another employer).
On the local level, employers could cover charter schools or private schools rather than the public system - either at the option of the employees as donors or by funding tuition directly.
Younger employee training could be covered by the employer rather than the taxpayer and the parents (incentivizing childbirth so that no-one need limit family size because of feared college costs).
You could even have donation to non-public adult education providers for either employees, potential employees or to satisfy donor preference - and pay the trainees for their attendance - rather than having a TANF program.
All these offsets could reduce the business income tax levy to zero, but make sure services are provided - likely by a better provider with a less leaky bucket.
posted by Michael Bindner at 11:03 AM
0 Comments:
Post a Comment
<< Home