Politics

[chicago51]

Medicaid is supposed to help the poor pay for medical treatment, but in reality it artificially drives demand for healthcare. People are going to the emergency room for the sniffles because Uncle Sam is footing the bill. Again, people don't "shop" with price in mind so insurance companies, doctors, and hospitals can charge whatever they want. (Just imagine what's going to happen now that you're MANDATED to buy insurance.)

You seem things like food, healthcare, and housing etc have an elastic demand that changes based on price. If people can't find to work to buy food they often will sort to criminal activity to get it but people got to eat regardless of the price.

Okay you may be an expert on taxes. If there is one thing I know it is healthcare considering I worked in a billing and collecting office for managed care insurance for 7 years prior to June 2013 and right now am in my last (class room I have a summer internship left) semester of physical therapy school. I'm actually supposed to me trying to finish this assignment instead I am BSing on IE. I admit I lack knowledge on the many complications of drug patent laws but for the most part I know healthcare pretty good.

First off the demand for healthcare doesn't follow perfect textbook suppy and demand laws. It does with some procedures but when you are sick you are sick. When the it comes life and depth procedures and even non life and death procedures that have major impacts on quality of life people are going to get those procedures done regardless of price unless the price unless it is literally impossibe to pay for it. Healthcare is an inelastic demand in alot of instances.

I can tell you government has raised healthcare cost but it is because of things like extensively long drug patent laws creating monopoly marketplaces. Not allowing Medicare to use it purchasing power to negoiate drug prices.

The Medicaid ER issue could easily be resolved by charging a small miniscule co-pay for ER visits. Even a small co-pay would deteriorate the really poor on Medicaid from going to the ER for unnecessary stuff. The real problem is most doctors won't take Medicaid patients.

If you eliminate Medicaid though you would still have people end up in the ER for more serious reason with no way to pay. Rules say you can't let people die and you have to stabalize them so with the uninsured hospitals right it off as a loss and have to jack up other people's prices.

Medicare reduces the cost for private insurance. When Medicare was being proposed most insurance companies at least intially where for it. A lot of them change their minds when they realized Medicare can easily be a single payer if the eligibility age is simply changed to 0. The reason though they where in favor of it is because it took the sickest individuals off their insurance rolles making the cost of private insurance cheeper. Premiums would go up the insurance companies had to ensure the oldest and sickest portion of our population.

Demand for healthcare is not higher in the US than it is in other coutries if anything thanks to large numbers of uninusred it is less. In basica supply and demand theory held true single payer countries or countries with mixed public and private plans should cost more because there is universal demand for healthcare. Yet healthcare cost have gone up and are higher in the United States because 30 cents of every dollar is not spent on health care but on administration cost, extra paper work, and bureaucracy . My job I referenced was for a whole department created to fight with insurance companies so the hospital can get their money. Nobody in our department (and it was a big department) administered any care yet our salaries came out of people's pocket's.

The other issue is that healthcare is not a competitive marketplace because doctors are the gait keepers to everything with HMOs and to a lesser extent with PPOs so the patients really can't control what services they want.

 

[chicago51]

I love the discussion of taxation, it's fascinating to me. I started learning about it when a visited Dartmouth in HS and my host gave me the FairTax Book. There is an awful lot of literature out there on taxation theory, and while there are competing points and no "right" answer, there are a couple obvious truths:
1. Our tax system is incredibly inefficient and poorly constructed.
2. The main issue with tax reform is that taxes are the ultimate political football.

When I get more time later I'll post some coherent thoughts, but I'm firmly convinced that some sort of seamlessly integrated VAT and/or sales tax combined with the elimination of most other taxes would do absolute wonders for the economy on a number of levels. You're talking billions and billions of dollars of waste/evasion/inefficiency that you'd get rid of.

PS. It's really interesting how you can tell someone's profession by their posting. Like it was beyond obvious that wizard was an accountant, and that GoIrish works for the Government or something para-Government.

The VAT works very well for Europe. Although many of the countries excempt things like food, and their healthcare is single payer or a public/private mix already so it avoids making it being too regressive.

The way the way Europe does their VAT exempting or crediting exports from the VAT and doubling down on imports helps with trade deficits without legally disregarding their trade treaties they have. Germany somehow runs a very large trade surplus despite paying wages comperable to American wages.

 

[wizards8507]

It's exhausting picking you guys apart line by line.

The demand for a higher education is driven by the lack of opportunity for those without one, not by the availability of student loans.

Wrong. That mentality is the bullshit thinking that has driven trade labor out of this country. Nobody wants to weld or drill for oil because they all think they're going to be philosopher poets.

Diplomas vs. Dirty Jobs - Reason.com

"We are lending money that ostensibly we don't have to kids who have no hope of making it back in order to train them for jobs that clearly don't exist, I might suggest that we've gone around the bend a little bit."
-Mike Rowe

Student loans just equal the playing field slightly. The fact that graduating students can no longer find decent paying jobs after getting their degrees is a whole new problem facing this country.

See above. There's work to be done and training to be had without accumulating $50,000 in debt. Student loans cripple people before they even start.

People with the sniffles go to the emergency room for care because they don't have health insurance, can't afford private medical care, and the emergency room is one place that can't turn them away because of their inability to pay.

I have insurance. When I get the sniffles, I get the hell over it because I'm a grown man. I drink lots of water and get on with my day. You don't need insurance to have common sense. We're a country of hypochondriacs, regardless of who has insurance or not.

The vast majority of the poor go without medical care until their health has deteriorated into something painful or debilitating.

Then what the hell is the point of Medicaid? That was that last great program that was going to provide healthcare to the poor and it's a miserable failure full of fraud and abuse. If Medicaid had worked, we wouldn't have needed Obamacare, but we put blind faith that the same people who couldn't manage one program are going to miraculously figure out how to manage another.

Someone needs to get out into the real world, the world in which the poor actually live on a daily basis. I guess if one lives in a world where they don't have to see the poor, it is easy to make blanket statements that imply they are all lazy, dirty, and unmotivated.

Show me where I said anything like that. Go ahead, I'll wait.

After all, if we can deceive ourselves into believing the poor are singularly responsible for their present living conditions, we can avoid any moral responsibility to help them.

Internet tough guy knows me pretty well, huh?

 

[Whiskeyjack]

When I get more time later I'll post some coherent thoughts, but I'm firmly convinced that some sort of seamlessly integrated VAT and/or sales tax combined with the elimination of most other taxes would do absolute wonders for the economy on a number of levels. You're talking billions and billions of dollars of waste/evasion/inefficiency that you'd get rid of.

Professor Mayer's class on Federal Income Taxation was one of the best I experienced at NDLS. Day 1 opened with a discussion of various systems of taxation and their inherent costs/ benefits. You can tax wealth, income or consumption.

Wealth taxes are inherently progressive, and help to prevent families from accumulating democracy-threatening levels of power. But they're a nightmare to administer, since they require the government to keep track of each individual's total holdings and the current value of such. Thus, very few countries utilize them.

Consumption taxes are inherently regressive, since the poor spend a much higher % of their total income than the rich. As far as administration goes, they're much more practical than a wealth tax, but still more difficult than an income tax; under a consumption tax, virtually every transaction creates the possibility of tax evasion. It's very easy for a buyer and a seller to agree deal under the table and pocket the savings. Ultimately, the attractiveness of a Euro-style VAT usually depends on how consumption-driven one's economy is; then again, Americans probably could use the extra incentive to save.

Income taxes are a happy medium between the two. Not as inherently regressive as a VAT, and far easier to administer than either wealth or consumption taxes. For the vast majority of Americans, the IRS already knows exactly what you'll owe (or are owed in return) before you ever send in your 1040. They could send you a 1040 already completed with your projected tax debt/ credit, and save a tremendous amount of time and money in the process, but proposals to do so have been consistently ruined by Grover Norquist and the assholes behind TurboTax. As BGIF mentioned above, one man's waste is another man's soup bowl.

 

[wizards8507]

Consumption taxes are inherently regressive, since the poor spend a much higher % of their total income than the rich. As far as administration goes, they're much more practical than a wealth tax, but still more difficult than an income tax; under a consumption tax, virtually every transaction creates the possibility of tax evasion. It's very easy for a buyer and a seller to agree deal under the table and pocket the savings. Ultimately, the attractiveness of a Euro-style VAT usually depends on how consumption-driven one's economy is; then again, Americans probably could use the extra incentive to save.

Consumption taxes could offset much of their regressive nature by exempting certain items that skew towards lower-income folks. Food, clothing, shelter, and medicine come to mind. If an individual's income were sufficiently low that he only purchased "needs" and not "wants," then the consumption tax would pass him by entirely.

 

[chicago51]

It's exhausting picking you guys apart line by line.


Wrong. That mentality is the bullshit thinking that has driven trade labor out of this country. Nobody wants to weld or drill for oil because they all think they're going to be philosopher poets.

Diplomas vs. Dirty Jobs - Reason.com


Then what the hell is the point of Medicaid? That was that last great program that was going to provide healthcare to the poor and it's a miserable failure full of fraud and abuse. If Medicaid had worked, we wouldn't have needed Obamacare, but we put blind faith that the same people who couldn't manage one program are going to miraculously figure out how to manage another.


Internet tough guy knows me pretty well, huh?

Quit campaigning for the tough guy award.

Seriously good points about college major choices. Although I this idea people are not willing to do manual work like welding is a talking point. Manufacturing is becoming done more efficency thanks to machines or is being done overseas because cheep labor and trade policies. The factory jobs available right of high school just don't exist any more.

You make a fair point about the demand for college going up, it has. That is because you need a highly skilled job to make a decent living as alot of factory jobs that used to do that are gone to either China or machines.

This idea of large spread fraud in Medicaid is a falicy. Not saying there is 0 fraud but there has been any evidence showing significant fraud with Medicaid and this is mostly a talking point.

Consumption taxes could offset much of their regressive nature by exempting certain items that skew towards lower-income folks. Food, clothing, shelter, and medicine come to mind. If an individual's income were sufficiently low that he only purchased "needs" and not "wants," then the consumption tax would pass him by entirely.

For once we totally agree on a post.

 

[wizards8507]

Seriously good points about college major choices. Although I this idea people are not willing to do manual work like welding is a talking point. Manufacturing is becoming done more efficency thanks to machines or is being done overseas because cheep labor and trade policies. The factory jobs available right of high school just don't exist any more.

I don't have any statistics, but I can share a personal example. My father works overnight shifts 8:00 PM to 8:00 AM two days on, two days off. With the built-in overtime, he makes over $60,000 a year, which is damn good considering he has no college degree and isn't trained in any trade like welding or electrical. He makes that money because it's a "dirty" job. People don't want twelve-hour overnight shifts, so the people that do are compensated accordingly. His coworkers are largely 20-somethings and most of them get fired after a few months because they come to work hung over or can't stop texting/tweeting from the factory floor.

You make a fair point about the demand for college going up, it has. That is because you need a highly skilled job to make a decent living as alot of factory jobs that used to do that are gone to either China or machines.

"Highly skilled" doesn't necessarily mean "four year degree." An electrician who apprentices for two years is much more marketable than a C+ history major from Southeastern Arizona Tech.

This idea of large spread fraud in Medicaid is a falicy. Not saying there is 0 fraud but there has been any evidence showing significant fraud with Medicaid and this is mostly a talking point.

I'll equate Medicare and Medicaid for these purposes because there's a lot more data out there on Medicare.

Politifact is supposedly non-partisan but they tend to skew slightly left-of-center and even they acknowledge that Medicare fraud is big dollars. The problem is incentive. A private insurance CEO seeks and eliminates fraud because it eats into his profits. Do you trust a Meidcare manager to have the same enthusiasm to seek out and eliminate fraud because it "harms the taxpayer"?

Medicare fraud rate is 8 to 10 percent, says Roskam of Illinois | PolitiFact

 

[Emcee77]

I just read a review of Thomas Piketty's Capital in the Twenty-First Century which touches on some of these issues:

Man that's fascinating stuff.

(I waited till I took my lunch break to finish reading it. Thanks for the guilt trip, BGIF.)

wizards typed this earlier:

Chicago thinks that the only way Person A can have more than Person B is by screwing Person B. The CEO is a plantation owner and the workers are his wage slaves. In the Progressive mind, redistribution isn't taking Person A's money to give to Person B, it was Person B's money all along.

Is that quite it? I'm no intellectual but I thought the theory is that Person A, who controls the means of production, didn't and won't pay Person B what his labor is worth. Rather, Person A inevitably will squeeze all the value he can out of Person B's labor and pass back to Person B as little of that value, in the form of compensation, as he can. The excess value created by Person B's labor but retained by Person A is profit, which gets added to capital. That's why capital prospers and labor struggles. The left is going to look at Whiskey's book and just see further evidence of it.

 

[wizards8507]

Is that quite it? I'm no intellectual but I thought the theory is that Person A, who controls the means of production, didn't and won't pay Person B what his labor is worth. Rather, Person A inevitably will squeeze all the value he can out of Person B's labor and pass back to Person B as little of that value, in the form of compensation, as he can. The excess value created by Person B's labor but retained by Person A is profit, which gets added to capital. That's why capital prospers and labor struggles. The left is going to look at Whiskey's book and just see further evidence of it.

More or less what I was saying, my main point being that the only way the capitalist obtains and grows wealth is by screwing over the laborer.

One problem with this theory is that it's all centered around an arbitrary definition of "worth." Assuming Person B agreed to perform X hours of labor for Y dollars per hour, then Y dollars per hour is exactly what' his labor is worth. The model ignores the fact that Person B could decline to work for Person A if the offered level of compensation is below B's perceived value of his own labor, especially in a thriving economy where Person C is another capitalist. Both Person A and Person C need labor and each one wants the best laborer possible. Persons A and C now need to bid over B's labor.

Another problem is that "capital" versus "labor" is a false dichotomy. A "CEO" would probably be thrown into the "capital" side of this duality, when in reality he earns a paycheck from the owners of his company just like the factory worker. Likewise, the factory worker might have a nice nest egg saved up in his 401(k) that owns mutual funds made up of shares of all kinds of different companies.

 

[GoIrish41]

Once again, you're joining your buddy chicago51 with your failure to understand the most BASIC economic principles. People bear the burden of taxation, regardless of whether it's nominally at the individual or corporate level. Taxation on corporations is equivalent to taxation on individuals, it just gets masked because it's one step removed. Corporate taxes mean lower wages, higher prices, and less profit (i.e. retarded 401(k) and pension growth). The people hurt most by corporate taxation are the "little people" (employees and consumers) that you care the most about.

Ironically, raising corporate income taxes would also lead to increased compensation for top executives. Compensation is an expense that reduces taxable income, so by increasing executive compensation, companies are able to lower their taxable income and reduce their tax liability.

The percentage of taxes paid on behalf of corporations by real people, is lower than it was in the 1940s. The percentage of taxes paid by real individuals has risen in that time period, even though some of those individuals work for or invest in corporations. Your "economic principle" has nothing to do with the point I was making.

 

[wizards8507]

The percentage of taxes paid on behalf of corporations by real people, is lower than it was in the 1940s. The percentage of taxes paid by real individuals has risen in that time period, even though some of those individuals work for or invest in corporations. Your "economic principle" has nothing to do with the point I was making.

Your point is moot because it's the same exact thing. If I pay $1,000 in taxes or $1,000 more for groceries because the corporations that make my food are being taxed, or earn $1,000 less in wages because my employer is being taxed, I'm still out $1,000.

 

[GoIrish41]

I love the discussion of taxation, it's fascinating to me. I started learning about it when a visited Dartmouth in HS and my host gave me the FairTax Book. There is an awful lot of literature out there on taxation theory, and while there are competing points and no "right" answer, there are a couple obvious truths:
1. Our tax system is incredibly inefficient and poorly constructed.
2. The main issue with tax reform is that taxes are the ultimate political football.

When I get more time later I'll post some coherent thoughts, but I'm firmly convinced that some sort of seamlessly integrated VAT and/or sales tax combined with the elimination of most other taxes would do absolute wonders for the economy on a number of levels. You're talking billions and billions of dollars of waste/evasion/inefficiency that you'd get rid of.

PS. It's really interesting how you can tell someone's profession by their posting. Like it was beyond obvious that wizard was an accountant, and that GoIrish works for the Government or something para-Government.

It is amazing how you could pick that out from our posts ... especially since you already knew what both of us did for a living before we even typed those posts. your powers of observation and extrapolation are incredible!!!!!!

 

[Emcee77]

More or less what I was saying, my main point being that the only way the capitalist obtains and grows wealth is by screwing over the laborer.

One problem with this theory is that it's all centered around an arbitrary definition of "worth." Assuming Person B agreed to perform X hours of labor for Y dollars per hour, then Y dollars per hour is exactly what' his labor is worth. The model ignores the fact that Person B could decline to work for Person A if the offered level of compensation is below B's perceived value of his own labor, especially in a thriving economy where Person C is another capitalist. Both Person A and Person C need labor and each one wants the best laborer possible. Persons A and C now need to bid over B's labor.

Another problem is that "capital" versus "labor" is a false dichotomy. A "CEO" would probably be thrown into the "capital" side of this duality, when in reality he earns a paycheck from the owners of his company just like the factory worker. Likewise, the factory worker might have a nice nest egg saved up in his 401(k) that owns mutual funds made up of shares of all kinds of different companies.

Well, it would serve no purpose to debate most of this, as where a person lands on this is just a matter of ideology ...

But I do think it's important to avoid mischaracterizations. I disagree that what I typed is "more or less what [you were] saying" earlier. You typed (I'll quote it again):

The CEO is a plantation owner and the workers are his wage slaves. In the Progressive mind, redistribution isn't taking Person A's money to give to Person B, it was Person B's money all along.

I see a big difference between seeking to be paid a wage that represents a more equitable proportion of the value created by one's labor and claiming that that value was always yours and that it's been stolen from you. No one can steal from you what hasn't been created yet. You've characterized "Progressives"' position in such a way as to make it appear illogical and come across as petulant whining ... which is why I've no interest in debating with you further.

 

[GoIrish41]

Your point is moot because it's the same exact thing. If I pay $1,000 in taxes or $1,000 more for groceries because the corporations that make my food are being taxed, or earn $1,000 less in wages because my employer is being taxed, I'm still out $1,000.

The cost of taxes, like every other expense, is passed on to consumers. Is that your point? It doesn't change the fact that corporations are paying a lower percentage of taxes than they did in 1940. Are you just makiing this observation so you can argue with someone? If you want to argue, here's a new topic ... you should never use "same" and "exact" side by side in a sentence because it is redundant.

 

[IrishLax]

It is amazing how you could pick that out from our posts ... especially since you already knew what both of us did for a living before we even typed those posts. your powers of observation and extrapolation are incredible!!!!!!

lol... smh... the point was not to tout powers of perception. It was to note that - in responding to wizard in a post where he said he was a CPA - how it was funny to retroactively look at previous posts and say "oh yeah, duh."

Hence the past tense was in it "was obvious." Not "it's obvious that you are an XYZ." The "PS" was definitely phrased poorly, so I guess we're even for your invent-a-word-and-misunderstand-another sentence earlier. Don't worry though, the meaning was not lost... we still get that you actually believe that Republicans hate everyone who isn't a rich white Christian male.

 

[IrishLax]

Professor Mayer's class on Federal Income Taxation was one of the best I experienced at NDLS. Day 1 opened with a discussion of various systems of taxation and their inherent costs/ benefits. You can tax wealth, income or consumption.

Wealth taxes are inherently progressive, and help to prevent families from accumulating democracy-threatening levels of power. But they're a nightmare to administer, since they require the government to keep track of each individual's total holdings and the current value of such. Thus, very few countries utilize them.

Consumption taxes are inherently regressive, since the poor spend a much higher % of their total income than the rich. As far as administration goes, they're much more practical than a wealth tax, but still more difficult than an income tax; under a consumption tax, virtually every transaction creates the possibility of tax evasion. It's very easy for a buyer and a seller to agree deal under the table and pocket the savings. Ultimately, the attractiveness of a Euro-style VAT usually depends on how consumption-driven one's economy is; then again, Americans probably could use the extra incentive to save.

Income taxes are a happy medium between the two. Not as inherently regressive as a VAT, and far easier to administer than either wealth or consumption taxes. For the vast majority of Americans, the IRS already knows exactly what you'll owe (or are owed in return) before you ever send in your 1040. They could send you a 1040 already completed with your projected tax debt/ credit, and save a tremendous amount of time and money in the process, but proposals to do so have been consistently ruined by Grover Norquist and the assholes behind TurboTax. As BGIF mentioned above, one man's waste is another man's soup bowl.

See the thing is, I disagree with the premise that a VAT or sales tax is inherently harder to enforce than income tax. That's always the chief complaint on those types of taxes... that they can be avoided and incentivize black markets. But there are states where when you combine the state + local sales tax it's already substantial... and you don't see a rash of black markets.

On the other hand, our income tax system is rife with fraud, miscalculation, loopholes, and general evasion. And that doesn't even touch the inherent costs associated with not only (inadequate) enforcement... but compliance by individuals. The amount of time + money spent on income tax returns is staggering, and it's all completely avoidable by a seamless tax.

 

[Irish Houstonian]

See the thing is, I disagree with the premise that a VAT or sales tax is inherently harder to enforce than income tax. That's always the chief complaint on those types of taxes... that they can be avoided and incentivize black markets. But there are states where when you combine the state + local sales tax it's already substantial... and you don't see a rash of black markets.

On the other hand, our income tax system is rife with fraud, miscalculation, loopholes, and general evasion. And that doesn't even touch the inherent costs associated with not only (inadequate) enforcement... but compliance by individuals. The amount of time + money spent on income tax returns is staggering, and it's all completely avoidable by a seamless tax.

+1. U.S taxpayer income is under-reported by over $2 trillion (about 20%). There's no way a VAT would be under-reported by that much. Most stores just comply with it.

 

[Whiskeyjack]

Consumption taxes could offset much of their regressive nature by exempting certain items that skew towards lower-income folks. Food, clothing, shelter, and medicine come to mind. If an individual's income were sufficiently low that he only purchased "needs" and not "wants," then the consumption tax would pass him by entirely.

Of course. It's just a much bigger administrative hassle to exempt a bunch of specific product classes from a VAT than it is to exempt everyone beneath a certain income threshold.

See the thing is, I disagree with the premise that a VAT or sales tax is inherently harder to enforce than income tax. That's always the chief complaint on those types of taxes... that they can be avoided and incentivize black markets. But there are states where when you combine the state + local sales tax it's already substantial... and you don't see a rash of black markets.

I don't think the administrative hassles of a VAT are unreasonable; but I do think it's inherently more difficult to administer than an income tax. And if you decided to make consumption taxes the primary vehicle for funding American government, they would suddenly become a lot more substantial, and the incentive to avoid them would increase proportionately.

Point being, they're not the silver bullet they're often made out to be. We'd still need an IRS; they'd just be focused on policing retailers instead of individuals.

On the other hand, our income tax system is rife with fraud, miscalculation, loopholes, and general evasion. And that doesn't even touch the inherent costs associated with not only (inadequate) enforcement... but compliance by individuals. The amount of time + money spent on income tax returns is staggering, and it's all completely avoidable by a seamless tax.

Absolutely, but none of that is inherent to an income tax. The loop-holes are largely the result of lobbyists buying preferential tax treatment, and the costs of compliance would drop tremendously if shitty private interests would stop lobbying against a return-free filing system.

 

[chicago51]

I'll equate Medicare and Medicaid for these purposes because there's a lot more data out there on Medicare.

Politifact is supposedly non-partisan but they tend to skew slightly left-of-center and even they acknowledge that Medicare fraud is big dollars. The problem is incentive. A private insurance CEO seeks and eliminates fraud because it eats into his profits. Do you trust a Meidcare manager to have the same enthusiasm to seek out and eliminate fraud because it "harms the taxpayer"?

Medicare fraud rate is 8 to 10 percent, says Roskam of Illinois | PolitiFact

The article didn't give a definite verdict but said it might be a worse case scenario.

I am interested what constitutes as Medicare fraud. I actually buy the numbers if the fraud concist of what I think of which is provider fraud.

I can see Medicaid fraud if people lie about there income and the IRS doesn't verify it. I can't imagine this being widespread.

I'm not sure how one commits Medicare fraud other than lie about his or her age. I assume they check for that.

Now the fraud that I know for a fact exists heavily because I've seen it is provider fraud and abuse. Which is involves pubic and private insurance.

The abuse consist of providers billing for services that are not medically necessary for that patient and not following medical practice acts. Not mention before we had offical practice acts we really went nuts.

The fraud consist of providers billing for stuff they didn't do or manipulating what they did. For physical therapy we bill in units. Our units are categories like therapeutic exercise, neuromuscular, manual therapy, gait training, and manual therapy. I can tell you therapeutic exercise depending the insurance provider tends to pay the most. So one could lie about how much they spend on ther ex to get a bigger reimbursement. There are limits to the extent one can do this based the way the minutes have to be divided but this is one example for what happens. I don't want to rip on the doctors because a lot of them do great work but they got even more options to manipulate things.

This is a wide spread problem in healthcare not just Medicare perhaps private insurance is able to catch this more than Medicare but this is still a problem for them I assure you.

 

[IrishLax]

+1. U.S taxpayer income is under-reported by over $2 trillion (about 20%). There's no way a VAT would be under-reported by that much. Most stores just comply with it.

Exactly. And the thing is, all major corporations/retailers would comply with it because there is no conceivable way that one wouldn't. The only ones that would potentially "cook the books" would be your micro-businesses (e.g. an antique shop in rural somewhere, etc.) or your "cash" industries (i.e. a barber, etc.) who could probably use the leg up anyways.

There's really no tangible downside to it acting in the primary function of a tax, which is efficiently getting money from citizens to fund public endeavors. The issues arise on the secondary and tertiary levels (i.e. social and political impact). The sad thing is, as things stand right now our tax policy is inverted... politics comes first, social policy comes second, and the actual effectiveness of the tax code is the last priority. Nobody cares if it functions well as long as it is politically advantageous to them and pushes their agenda.

 

[Irish Houstonian]

...We'd still need an IRS; they'd just be focused on policing retailers instead of individuals...

But the IRS already does that. They'd just be focusing their efforts on thousands of companies rather than thousands of companies + millions of individuals.

 

[Whiskeyjack]

But the IRS already does that. They'd just be focusing their efforts on thousands of companies rather than thousands of companies + millions of individuals.

Not really. Sales taxes are primarily a state and municipal thing right now. Most local businesses are taxed as disregarded entities or partnerships, so everything ends up on an individual 1040 anyway. Switching from a national income tax to a national consumption tax would be a massive transition, and the latter would still have its own unique enforcement issues. I think the inherent efficiency benefits of a VAT over an income tax are frequently exaggerated.

 

[IrishLax]

The VAT works very well for Europe. Although many of the countries excempt things like food, and their healthcare is single payer or a public/private mix already so it avoids making it being too regressive.

The way the way Europe does their VAT exempting or crediting exports from the VAT and doubling down on imports helps with trade deficits without legally disregarding their trade treaties they have. Germany somehow runs a very large trade surplus despite paying wages comperable to American wages.

It really is crazy just how effective the German economic system is relative to their peers.

I really wish I was more well-read, and well-schooled in economics but I'm not. It's my uneducated opinion though that Germany is leaner and meaner than other "westernized" nations in large part because, relative to their peers, they are the country that most recently was torn down and got to start over at the foundation from a government/economic standpoint.

 

[Irish Houstonian]

Not really. Sales taxes are primarily a state and municipal thing right now. Most local businesses are taxed as disregarded entities, so everything ends up on an individual 1040 anyway. Switching from a national income tax to a national consumption tax would be a massive transition, and the latter would still have its own unique enforcement issues. I think the inherent efficiency benefits of a VAT over an income tax are frequently exaggerated.

That's not right -- maybe Wizards can chime in here, but if I recall the only entities that don't file returns are single-member LLC's, and a guarantee you that 90% of your purchases in the last year did not take place with a single-member LLC as the merchant.

And the fact that they're already collecting and report sales tax at the state level is an efficiency -- they're already doing that leg-work to begin with, they just have to keep doing it at the federal level now.

 

[Whiskeyjack]

That's not right -- maybe Wizards can chime in here, but if I recall the only entities that don't file returns are single-member LLC's, and a guarantee you that 90% of your purchases in the last year did not take place with a single-member LLC as the merchant.

That's correct. Single-member LLCs are disregarded entities, and multi-member LLCs are taxed as partnerships unless they specifically elect to be taxed as a C Corp. Either way, most everything's ending up on an individual 1040. And you're absolutely right that I did not do much business with LLCs last year, but that's not really dispositive of anything; this country is dominated by large national retailers. I made that comment because my firm is specifically geared towards small business people, and 99% of our new entity formations are LLCs, taxed either as disregarded entities or partnerships.

And the fact that they're already collecting and report sales tax at the state level is an efficiency -- they're already doing that leg-work to begin with, they just have to keep doing it at the federal level now.

So are we getting rid of federalism then, too?

 

[chicago51]

It really is crazy just how effective the German economic system is relative to their peers.

I really wish I was more well-read, and well-schooled in economics but I'm not. It's my uneducated opinion though that Germany is leaner and meaner than other "westernized" nations in large part because, relative to their peers, they are the country that most recently was torn down and got to start over at the foundation from a government/economic standpoint.

What they have done with solar energy despite being one of the cloudiest countries in Europe has been amazing as well. Much much better than the Obama and the Democrats failed policy of investing in green energy companies that often fail.

Awhile back they realized they where going to to be have to replace two nuclear power plants and the power companies where asking for help. What they decided to do instead was give basically interest free loans and let the German people solar panels for their homes. The catch was the power companies had to buy the power back from the people until the reached the cost level of 2 nuclear power plants. A lot of people took and advantage and actually made money on buying solar panels not to mention the savings on future cost.

Germany generates 8 -10 percent of their energy on solar and a lot more on a very good day. Plus having central power plants rather they be green, fossil fuel, nuclear, etc concentrates money and power. A localized power does takes away from the political power of big energy. Plus so much power is lost in the transfer through the lines, and through transformers we end up losing a lot of our energy from having centralized power supplies. Localized is also more resilient to disasters.

Having power from centralized power plants is inevitable but the more localized we can make the more efficient and resilient the grid becomes.

The big problem I have with Obama administration's green policy is that it is still one that pushes largely for centralized power supplies for green energy when the technology allows a much greater localization of energy. I assume this is because of the wealth and political power that comes with having centralized power is why both parties tend not push for localized power.

 

[Emcee77]

I just read a review of Thomas Piketty's Capital in the Twenty-First Century which touches on some of these issues:

Another piece on this very provocative book:

John Cassidy: Is Surging Inequality Endemic to Capitalism? : The New Yorker

 

[GoIrish41]

Another piece on this very provocative book:

John Cassidy: Is Surging Inequality Endemic to Capitalism? : The New Yorker

Great read. I was particularly struck by this paragraph, which we have discussed at length in this thread.:

In the nineteen-fifties, the average American chief executive was paid about twenty times as much as the typical employee of his firm. These days, at Fortune 500 companies, the pay ratio between the corner office and the shop floor is more than two hundred to one, and many C.E.O.s do even better. In 2011, Apple’s Tim Cook received three hundred and seventy-eight million dollars in salary, stock, and other benefits, which was sixty-two hundred and fifty-eight times the wage of an average Apple employee. A typical worker at Walmart earns less than twenty-five thousand dollars a year; Michael Duke, the retailer’s former chief executive, was paid more than twenty-three million dollars in 2012. The trend is evident everywhere. According to a recent report by Oxfam, the richest eighty-five people in the world—the likes of Bill Gates, Warren Buffett, and Carlos Slim—own more wealth than the roughly 3.5 billion people who make up the poorest half of the world’s population.

 

[connor_in]

<iframe width="560" height="315" src="//www.youtube.com/embed/JNdc2-_vS0Y" frameborder="0" allowfullscreen></iframe>

SMDH...LOL

MSNBC: Hate Forward | Washington Free Beacon

 

[Irish Houstonian]

Great read. I was particularly struck by this paragraph, which we have discussed at length in this thread.:

In the nineteen-fifties, the average American chief executive was paid about twenty times as much as the typical employee of his firm. These days, at Fortune 500 companies, the pay ratio between the corner office and the shop floor is more than two hundred to one, and many C.E.O.s do even better. In 2011, Apple’s Tim Cook received three hundred and seventy-eight million dollars in salary, stock, and other benefits, which was sixty-two hundred and fifty-eight times the wage of an average Apple employee...

It isn't really that striking when you account for how large companies are now, relative to the 1950's. Back in the 1950's the largest company was worth less than $20 billion. Today, it's $500 billion. That's an increase in value that even larger than the increase in the ratio of the so-called "corner office/shop floor" (20/1 to 200/1).

And Tim Cook actually makes .076% of the total market cap of Apple. Even though every decision he makes can help or hurt the company by many, many times this amount. Citing his take-home pay without context seems just like more greed and envy-mongering to me.