World Politics

[Anonymous]

I'm suffocating. But, grazie, that's what I expected.

When you define "rich" for me I'll consider writing the novel that will be required to answer your questions.

While you are at it, I'd like to know what constitutes an "obscene profit".

 

[Anonymous]

(i am only quoting the last thing you wrote because it is convenient.)

scott, while you appear to be correct in the rise of tax revenue to the government (i haven't read alpe's link) there is one problem with your analysis.

i remember from econ in university my professor explaining the very situation that you brought up: revenues go up when taxes go down. however, he was also careful to explain the economic situations where lowering the tax rate would fail to produce this outcome. one such situation is the very conditions that are affecting the US now. when the economy is contracting and interests rates are low, lowering tax rates exacerbates the situation because money still remains unproductive. it has almost nowhere to go to become productive. banks are not willing to take on risk and nor are companies willing to risk cash on hand without concomitant demand. this does not necessarily mean that raising income or payroll taxes would be the answer, but raising capital gains taxes would be a relatively safe way to actually increase tax revenue without risking productivity.

the take home point is, there are no one-size-fits-all answers that work all of the time in a chaotic system like a large economy. raising taxes isn't always bad, nor is it never good.

This is all true but your econ professor left out the part about human behavior in reaction to the perception of confiscatory income tax rates.

 

[rhubroma]

When you define "rich" for me I'll consider writing the novel that will be required to answer your questions.

While you are at it, I'd like to know what constitutes an "obscene profit".

And I look forward to that novel that will be required to answer all my questions.

In any case I never presumed to define rich or "obscene profit." That's for you dear.

 

[Anonymous]

And I look forward to that novel that will be required to answer all my questions.

In any case I never presumed to define rich or "obscene profit." That's for you dear.

I suppose this means a stand-off then.

 

[Merckx index]

This is the interesting part. GDP tripled yet if growth slows down the whole economy is in trouble. So for the world to live in it's comfort zone the economy must grow indefinitely.

I may not be as good at math as some on this forum, but indefinite growth on a finite planet doesn't calculate. Something has to give, and my bet is that the planet goes first.

That is the elephant in the room that neither the elephants nor the donkeys want to acknowledge. The free market system has developed in an environment where two key parameters have always been taken for granted: a) population growth continues indefinitely; and b) the desires of individuals for more material goods increase indefinitely. At some point, both have to reach a limit, particularly population. The question is, can the economy grow in other, non-material ways?

It seems to me that sustainability is not necessarily incompatible with growth. There will always be a need for information, knowledge, services and other non-material benefits that can have minimal impact on physical resources. The world has already begun making a transition in this direction. The disturbing part, it seems to me, is that this transition has begun before everyone has reached minimum material standards. First things first.

So, all we have to do here is math. The most striking number is, during the Bush years, top marginal incomes were up (economy expansion... lots of things could explain this) BUT, and this is a BIG BUT, the total percentage of income paid in taxes was ALSO HIGHER WITH A LOWER TOP RATE. The average is more than 4% of their income paid in tax during the Bush years compared with Clinton's.

That speaks to behavior, not expansion. Meaning, there is a point where people will hire tax attorneys to find the gaps in the tax code. There is also a point where they will just pay their taxes.

I have two problems with this. First, while the rate is higher in the Bush years for equivalent percentiles, it is lower for equivalent incomes, which is the more meaningful comparison. For example, someone making $290K under Clinton paid 36+%, while someone making the same amount under Bush paid 34+%. So I think it’s misleading to say that under Bush the rich paid more. Those in a particular income percentile paid more, yes, but that is because that percentile represented far more income than under Clinton. You would expect them to pay more because their higher income pushes them into a higher tax bracket. Another example of how the rich vs. poor gap has been growing.

For example, in 2010, the 25% rate kicked in at about 70K for married couples, 28% at 140K, 33% at 210K, and 35% above about 375K. Suppose you lower each of those rates by 2%. So now the top rate is 33%, not 35%, and so on. But if the income for any particular percentile is higher, those lower rates will be nullified. So if someone in a particular percentile now makes 400K instead of 200K, he will pay about 33% on the extra $200K, in addition to the 26% he pays on the first $200K, for an overall average of 29.5% on the $400K. Under the old system, with the higher tax rates, he would have paid 28% on the $200K. So under the new, lower rates, yes, he pays a greater overall % of his taxes, but this can be explained by being in higher tax brackets.

These are only rough calculations and use current or near-current tax rates, but I think they illustrate the situation. The more you earn, the higher your maximum tax bracket, which raises your overall tax rate. This counteracts the effect of lowering the rate at each tax bracket. One of the main purposes of Reagan's 1981 tax reform was to stop this bracket "creep", because the high rate of inflation at the time meant people were paying more taxes on income that was not actually worth any more. But this is not an issue in the Bush years, where inflation was much lower.

My second problem concerns your conclusion that when tax rates are lower, the rich pay the rates, instead of paying a tax lawyer to find loopholes. The implication is that the tax prepareer costs more—on the order of $10,000 or more—than the money saved by using the loopholes.

I have already pointed out that we don't need to invoke this explanation. But let's assume that this might make some contribution to the higher overall tax rates. If that is the case, then tax lawyers must have suffered a very severe downturn in business under Bush. Indeed, it would seem that all the increased revenue not due to economic expansion resulted from, in effect, taking the money from the tax lawyers and other preparers.

I don’t know if that’s the case. As of early 2009, 80% of the income tax returns filed used the help of a preparer, or software, so it doesn’t sound as though business tanked. But if it did, then all those tax preparers must have reported much lower incomes, which would mean they were paying lower taxes. I really can’t believe that the rich—that anyone who understands taxes at all—would willingly pay more just because it was a little easier. They paid more because they calculated in effect they were paying less, and that less is less income, and less income taxes, for others.

So not only did people with a certain income not pay more taxes under Bush than under Clinton, but it is not clear that the increased taxes paid by someone in a given percentile resulted in increased tax revenues. To the extent your interpretation is correct, it sounds as though the net effect was to transfer money from the less well off—tax preparers, though many I’m sure are not exactly poor—to the very well off. Whatever investments the fat cats might have made with their newfound wealth, they definitely did not stimulate the tax preparation industry.

 

[Cobblestones]

This is the interesting part. GDP tripled yet if growth slows down the whole economy is in trouble. So for the world to live in it's comfort zone the economy must grow indefinitely.

I may not be as good at math as some on this forum, but indefinite growth on a finite planet doesn't calculate. Something has to give, and my bet is that the planet goes first.

Growth doesn't have to happen for the sake of it. The situation is more difficult, let me explain:

First of all, productivity is steadily growing. Only increased productivity will keep you ahead of your competitor. Growing productivity, on the other hand, means that (i) either you rake in more profit, or (ii) you sell at a lower price, putting some of the productivity gains in the pockets of your customers. Either way, you have now liberated resources to create something new, which leads to a growing economy.

Let's think that to the end: what happens when productivity grows to a point that whatever good is produced, is produced mostly with the help of machines or robots, which need hardly any maintenance and the goods you produce become also more and more versatile, increasing the productivity of the customer in turn.


Where do all the gains of productivity go?

What is pretty obvious is that unskilled labor (and even skilled labor) loses out eventually. Instead of having hundreds of workers assembling a product, you have hundreds of robots. The only job left is maintenance etc. which requires fairly high technical skills. So, the profit, which before had to be shared (however reluctantly) with hundreds of workers, now falls almost entirely to the owner of the production capital and the handful of highly skilled employees.


Where do the employees go?

Well, for once, the 'liberated' workers can go and produce other stuff instead, meaning the economy grows, more is produced and consumed. Also, for a long term, the service sector was expanding greatly which could absorb the 'liberated' workers. However, in the end, our resources on this planet are finite. Energy and raw materials will be harder and harder to come by, and will eventually be consumed. Also, the service sector cannot expand forever and absorb labor. But productivity will still increase! In consequence this leads to a massive loss of manufacturing jobs, without replacement to be found in the service sector.


From where should today's middle class receive their future income?

One way is for one highly skilled worker to support more and more dependents which is pretty much happening right now where people still in the work force have to support their children far beyond what was typical only one decade ago. Often, that person would also have to shoulder medical expenses for their parent generation as health care for the elderly increases in cost. This is squeezing those fortunate enough to still have a paying job. On top of that we have real wages have stagnating or declining.

In a longer perspective, I can't see any way out of this without better redistribution of the productivity gains. Some of that used to go into consumer pockets. Now, however, productivity gains have to be used to offset challenges of globalization and the increasing price of raw materials.

In the end, will we have industrial parks filled with robots producing day and night but devoid of any human life? Who then should consume the fruits of ever increasing productivity? Where will those industrial parks be? The place which asks for the lowest taxes? The place with the most lax environmental regulations which probably comes hand in hand with the cheapest source of energy and raw materials? Or will it be the place with the lowest minimum wage for those few human beings which still have work in maintaining those industrial parks? This is the problem ahead of us, and clearly, it is at the heart of the Occupy Wall Street protests.

 

[redtreviso]

In the end, will we have industrial parks filled with robots producing day and night but devoid of any human life? Who then should consume the fruits of ever increasing productivity? Where will those industrial parks be? The place which asks for the lowest taxes? The place with the most lax environmental regulations which probably comes hand in hand with the cheapest source of energy and raw materials? Or will it be the place with the lowest minimum wage for those few human beings which still have work in maintaining those industrial parks? This is the problem ahead of us, and clearly, it is at the heart of the Occupy Wall Street protests.

Those robots won't get up and go buy a Schlotzsky's

 

[Cobblestones]

If your interpretation is correct, it sounds as though the net effect was to transfer money from the less well off—tax preparers, though many I’m sure are not exactly poor—to the very well off. Whatever investments the fat cats might have made with their newfound wealth, they definitely did not stimulate the tax preparation industry.

I think your comment says it all. It is simply ridiculous to claim that a presumed increase in tax revenue under Bush for the top 1% (a factoid which you nicely refute) was entirely shouldered by the tax-preparer industry. I must have missed all the business news reporting on the decline of the tax preparer industry. But come to think of Herman Cain's tax plan, maybe the GOP does have the tax preparers in their crosshairs?

 

[blutto]

Growth doesn't have to happen for the sake of it.

....unfortunately if capitalism is to survive it has to expand...and my reading of economic theory, while it is fairly broad (though certainly not that of a specialist ) seems to show that this is a theme that has held constant in theory since Marx ( he was an economist primarily ) introduced it in his early writings....of course one could argue this is relevant only if one still believes that our present day economic system could in the broad sense be considered capitalist...

...so yeah growth is a integral part of the capitalist package...and yeah it exhibits a growth pattern with has many of the traits usually attributed to the class of diseases we collectively call cancer....and unless very carefully managed its just as dangerous because its always lethal...

Cheers

blutto

 

[Amsterhammer]

Ok, well either you are not aware of how healthcare in the USA works or you don't know what a free market is.

My head is still spinning from the ongoing tax discussion.....but I really can't let you get away with this nonsense. And yes, I am open to persuasion by a reasonable argument that can convince me that I'm seeing something wrong. But, I am not open to being told that I don't know what a free market is (I can read Wiki too,) or that I am wrong in asserting that one of the principal factors that has brought the US health system to its current state is precisely that free market, the one you deny exists.

I was the one you wanted to define 'obscene profit' - how does 600% grab you? Obscene enough? We'll get to that shortly. First, a recap, since this discussion has been spread out over God knows how many pages.

I listed a few things off the top of my head.....

Oh, so the free market has nothing to do with the fact that you can't watch tv for 10 minutes without having to endure several drug commercials ("ask your doctor")?

The free market has nothing to do with the fact that "asking your doctor" costs money?

The free market has nothing to do with the fact that drug companies are allowed, and even encouraged, to make obscene profits?

The free market has nothing to do with the fact that US doctors have been socialized into believing that the practice of medicine affords them a God-given right to become millionaires?

The free market has nothing to do with the fact that many (or even most) ordinary working people cannot afford health insurance because premiums are so obscenely high?

...to which you replied with the first quote at the top here.

Ok, well either you are not aware of how healthcare in the USA works or you don't know what a free market is.

I then asked you -

Seriously, please enlighten me in my ignorance. Explain to me how the inequities of the US 'health system' (and the current state of society in general) have nothing to do with the largely unregulated working of free market forces (as per the widely accepted definition of what 'free market' means).

You then replied -

Okay. A Free Market defined (wiki is as good as any I suppose);

and

Here is a Forbes article that is a pretty good place to start;

http://www.forbes.com/2009/07/28/health-care-reform-obama-opinions-columnists-shikha-dalmia.html

Remember, the comment was the US heathcare system was far from a free market.

Image my surprise, Scott, when your evidence to back up your claim that the free market was not to blame turns out to be an article from a woman working for The Reason Foundation, one of these wonderful 'think tanks' whose values, according to their site are, "the values of individual freedom and choice, limited government, and market-friendly policies."

Imagine my jaw dropping further since this article was posted on Forbes, "Home Page for the World's Business Leaders".

This was your evidence to support your contention that the US health industry is "far from" a free market? You cannot be serious?

To return to my original contention, that the part/semi/non-regulated, free market, free-for-all way in which the US health industry is forced to exist, is responsible for most, if not all, of the misery.

My girlfriend has worked in the health industry for over 35 years. She can cite endless examples of (criminal) waste of money and resources because of suppliers and doctors charging/billing what the market will bear. This is quite apart from the so-called 'gray market', an abomination that legally is allowed to charge obscene mark-ups for urgently needed drugs - a situation created in part by drug companies simply deciding to stop producing drugs that are no longer profitable enough. You'll be as unimpressed by me citing the Daily Kos as I was with your Forbes, but just look at the actual facts mentioned here -

Mon Oct 17, 2011 at 06:18 PM PDT
Hoarding Cancer Drugs for Profit

NBC Nightly News had a story tonight about pure, unmitigated, heartless greed. There is an unprecedented critical shortage of some life saving cancer drugs, including those that fight childhood cancers. That alone is enough to cause despair for anyone fighting this fight and for their loved ones. Some families are traveling to different states to find hospitals with enough supply for their child to get the treatment they need. A shortage is bad enough, but a recent congressional investigation found that there are companies in the "grey market" that are buying up supplies then reselling them at an average of 650% mark-up in order to capitalize on the shortage.

According to an investigation by the Committee on Oversight and Government Reform, one company is selling a leukemia drug that usually goes for $12 per vial for $990 per vial. Rep. Elijah Cummings (D-MD,) ranking member of the House Committee on Oversight and Government Reform, initiated the investigation after receiving a letter from a concerned mom whose child would have died without a drug that is now in short supply. The investigation has so far found several companies profiteering with all kinds of drugs, from cancer treatments to prenatal anti-seizure meds. Any parent would do anything in their power to get their child life-saving treatment, so parents of dying kids are perfect targets for exploitation. These companies know that people will pay this extortion and they will make a fantastic profit. They simply don't care that this practice is actually killing people.
(more at http://www.dailykos.com/story/2011/10/17/1027459/-Hoarding-Cancer-Drugs-for-Profit )

.....and has 'wasted' God knows how much money too. Now, please have a look at
this story from the NYT (I know, it's a lefty, liberal paper)

http://www.nytimes.com/2011/08/07/opinion/sunday/ezekiel-emanuel-cancer-patients.html

...and then please take the time to watch this PBS film -

http://www.pbs.org/newshour/bb/health/july-dec11/drugshortage_08-29.html

If you're still not convinced that the US's historical free market approach has a direct and negative effect on health care in its totality, maybe this article from the Washington Post (another lefty organ) will get you thinking.

Weil and Guterman: Mayo Clinic's Model

By Henry Weil and Stuart Guterman
Tuesday, September 29, 2009; 4:10 PM

A recent Post article asked whether the Mayo Clinic's better patient-care outcomes and lower costs provide a model for the rest of the health-care system, or if it's a "a mirage."

Mayo's performance is no mirage. In fact, there are multiple examples of health systems -- the president and other policy makers also have cited Geisinger, Cleveland Clinic, Bassett, Kaiser Permanente and others as models for health-care reform -- that consistently and reliably achieve similar results: providing good care at low cost, with high patient satisfaction.

What these systems have in common is that they are integrated systems that employ their physicians, emphasizing patient-centered care, better outcomes, and prudent stewardship of health-care resources, with accountability for results. A group of these systems met in Washington earlier this month to discuss how the elements of their success could be adopted more broadly in the context of health-care reform. They concluded that comprehensive care, collaboration, integration, and measurement and accountability, as well as strong corporate leadership, were key to their success and could provide an example for other systems.

These systems exist and succeed in the current environment, but that success is made more challenging by the payment system. Nothing in the current setup encourages collaboration among providers, and those who attempt to provide care more effectively and efficiently often are penalized by a loss in revenues. The challenge to policy makers is to provide an environment in which better practices are rewarded rather than punished.

Several recent developments offer promise of movement in the right direction, including the stimulus funding to support comparative effectiveness research and health information technology. Critically, most of the health reform legislation includes provisions to test different organizational models for providing better care at lower cost.

The benefits could be substantial. It has been estimated by researchers at the Rand Corporation and the Dartmouth Medical School that 30 percent of current U.S. healthcare expenditures -- 30 percent of $2.5 trillion, or $750 billion a year -- is spent inefficiently, on care that is not supported by clinical evidence. While the precise numbers may be debated, these figures provide some indication of the potential savings to be had from more effective, more efficient health care: Eliminating just 15 percent of the estimated inefficiency in the health-care system would yield savings of more than $100 billion per year, or more than $1 trillion over the next ten years -- essentially funding currently proposed reforms.

The promise of savings of this magnitude should be attractive to everyone, regardless of political or ideological orientation.
(end)

(my bold added)

Now why wouldn't everyone want to adapt the system to cost less, be more efficient, and lead to greater patient satisfaction? Could it be vested free market interests?

 

[blutto]

Growth doesn't have to happen for the sake of it.

....unfortunately if capitalism is to survive it has to expand...and my reading of economic theory, while it is fairly broad (though certainly not that of a specialist ) seems to show that this is a theme that has held constant in theory since Marx ( he was an economist primarily ) introduced it in his early writings....of course one could argue this is relevant only if one still believes that our present day economic system could in the broad sense be considered capitalist...

...so yeah growth is a integral part of the capitalist package...and yeah it exhibits a growth pattern with has many of the traits usually attributed to the class of diseases we collectively call cancer....and unless very carefully managed its just as dangerous because its always lethal...

Cheers

blutto

...the other issue that Marx introduced and that has stood the test of time is the idea that the only real wealth generated within a capitalist system is the excess capital generated by labour...so in healthy capitalist systems that wealth is distributed thru the system in such a way that the symbiotic relationship between labour and Galts can be maintained in a way that is fairly beneficial to both parties ( both parts of the equation enjoy the fruits of their labour that are produced within the system )...

...when too much profit is extracted from the system by the Galts the system starts to break down...among other things the labour end of things cannot maintain their health ( as in health-care becomes an issue ) and they cannot educate themselves to be able to deal efficiently with the issues of the present and the future ( access to education becomes an issue )...so that one could argue that when profit taking becomes so extreme that is compromises the health of the symbiotic relationship that allows capitalism to grow in a reasonable manner it becomes obscene...

...so the present economic situation where labour cannot stay healthy or educate itself and most importantly not perform its other primary function which is to consume is the result of profit taking that is obscene ( definition: repulsive by reason of crass disregard of moral or ethical principles..... or in this particular case sound economic principles ....)

Cheers

blutto

 

[gregod]

This is all true but your econ professor left out the part about human behavior in reaction to the perception of confiscatory income tax rates.

you don't know what he included or not. furthermore, the US is nowhere near "confiscatory income tax rates" with the lowest business and income tax rates in the G20.

 

[usedtobefast]

http://thinkprogress.org/politics/2011/10/20/348168/tea-party-group-businesses-hurt-obama/

 

[Anonymous]

I have two problems with this. First, while the rate is higher in the Bush years for equivalent percentiles, it is lower for equivalent incomes, which is the more meaningful comparison. For example, someone making $290K under Clinton paid 36+%, while someone making the same amount under Bush paid 34+%. So I think it’s misleading to say that under Bush the rich paid more. Those in a particular income percentile paid more, yes, but that is because that percentile represented far more income than under Clinton. You would expect them to pay more because their higher income pushes them into a higher tax bracket. Another example of how the rich vs. poor gap has been growing.

For example, in 2010, the 25% rate kicked in at about 70K for married couples, 28% at 140K, 33% at 210K, and 35% above about 375K. Suppose you lower each of those rates by 2%. So now the top rate is 33%, not 35%, and so on. But if the income for any particular percentile is higher, those lower rates will be nullified. So if someone in a particular percentile now makes 400K instead of 200K, he will pay about 33% on the extra $200K, in addition to the 26% he pays on the first $200K, for an overall average of 29.5% on the $400K. Under the old system, with the higher tax rates, he would have paid 28% on the $200K. So under the new, lower rates, yes, he pays a greater overall % of his taxes, but this can be explained by being in higher tax brackets.

These are only rough calculations and use current or near-current tax rates, but I think they illustrate the situation. The more you earn, the higher your maximum tax bracket, which raises your overall tax rate. This counteracts the effect of lowering the rate at each tax bracket. One of the main purposes of Reagan's 1981 tax reform was to stop this bracket "creep", because the high rate of inflation at the time meant people were paying more taxes on income that was not actually worth any more. But this is not an issue in the Bush years, where inflation was much lower.

My second problem concerns your conclusion that when tax rates are lower, the rich pay the rates, instead of paying a tax lawyer to find loopholes. The implication is that the tax prepareer costs more—on the order of $10,000 or more—than the money saved by using the loopholes.

I have already pointed out that we don't need to invoke this explanation. But let's assume that this might make some contribution to the higher overall tax rates. If that is the case, then tax lawyers must have suffered a very severe downturn in business under Bush. Indeed, it would seem that all the increased revenue not due to economic expansion resulted from, in effect, taking the money from the tax lawyers and other preparers.

I don’t know if that’s the case. As of early 2009, 80% of the income tax returns filed used the help of a preparer, or software, so it doesn’t sound as though business tanked. But if it did, then all those tax preparers must have reported much lower incomes, which would mean they were paying lower taxes. I really can’t believe that the rich—that anyone who understands taxes at all—would willingly pay more just because it was a little easier. They paid more because they calculated in effect they were paying less, and that less is less income, and less income taxes, for others.

So not only did people with a certain income not pay more taxes under Bush than under Clinton, but it is not clear that the increased taxes paid by someone in a given percentile resulted in increased tax revenues. To the extent your interpretation is correct, it sounds as though the net effect was to transfer money from the less well off—tax preparers, though many I’m sure are not exactly poor—to the very well off. Whatever investments the fat cats might have made with their newfound wealth, they definitely did not stimulate the tax preparation industry.

I have two problems with this. First, while the rate is higher in the Bush years for equivalent percentiles, it is lower for equivalent incomes, which is the more meaningful comparison. For example, someone making $290K under Clinton paid 36+%, while someone making the same amount under Bush paid 34+%. So I think it’s misleading to say that under Bush the rich paid more. Those in a particular income percentile paid more, yes, but that is because that percentile represented far more income than under Clinton. You would expect them to pay more because their higher income pushes them into a higher tax bracket. Another example of how the rich vs. poor gap has been growing.

The corresponding percentages represent amount of income as a percentage of the total. Under Bush the top 1% not only made more, they paid a higher total percentage of their income (not tax bracket, but percentage of income).

The only explaination I can think of is behavior. It's not that they use their CPA's less, it's that they become more aggressive... willing to push boundries and taking more audit risk.

 

[Anonymous]

you don't know what he included or not. furthermore, the US is nowhere near "confiscatory income tax rates" with the lowest business and income tax rates in the G20.

Well, that may be your opinion, but the top 1% in the US likely don't know or care what people in other country's pay. I can't think of too many other explanations for the results.

 

[Anonymous]

My head is still spinning from the ongoing tax discussion.....but I really can't let you get away with this nonsense. And yes, I am open to persuasion by a reasonable argument that can convince me that I'm seeing something wrong. But, I am not open to being told that I don't know what a free market is (I can read Wiki too,) or that I am wrong in asserting that one of the principal factors that has brought the US health system to its current state is precisely that free market, the one you deny exists.

I was the one you wanted to define 'obscene profit' - how does 600% grab you? Obscene enough? We'll get to that shortly. First, a recap, since this discussion has been spread out over God knows how many pages.

I listed a few things off the top of my head.....



...to which you replied with the first quote at the top here.



I then asked you -



You then replied -



Image my surprise, Scott, when your evidence to back up your claim that the free market was not to blame turns out to be an article from a woman working for The Reason Foundation, one of these wonderful 'think tanks' whose values, according to their site are, "the values of individual freedom and choice, limited government, and market-friendly policies."

Imagine my jaw dropping further since this article was posted on Forbes, "Home Page for the World's Business Leaders".

This was your evidence to support your contention that the US health industry is "far from" a free market? You cannot be serious?

To return to my original contention, that the part/semi/non-regulated, free market, free-for-all way in which the US health industry is forced to exist, is responsible for most, if not all, of the misery.

My girlfriend has worked in the health industry for over 35 years. She can cite endless examples of (criminal) waste of money and resources because of suppliers and doctors charging/billing what the market will bear. This is quite apart from the so-called 'gray market', an abomination that legally is allowed to charge obscene mark-ups for urgently needed drugs - a situation created in part by drug companies simply deciding to stop producing drugs that are no longer profitable enough. You'll be as unimpressed by me citing the Daily Kos as I was with your Forbes, but just look at the actual facts mentioned here -

Cancer-Drugs-for-Profit[/url] )

.....and has 'wasted' God knows how much money too. Now, please have a look at
this story from the NYT (I know, it's a lefty, liberal paper)

http://www.nytimes.com/2011/08/07/opinion/sunday/ezekiel-emanuel-cancer-patients.html

...and then please take the time to watch this PBS film -

http://www.pbs.org/newshour/bb/health/july-dec11/drugshortage_08-29.html

If you're still not convinced that the US's historical free market approach has a direct and negative effect on health care in its totality, maybe this article from the Washington Post (another lefty organ) will get you thinking.

Weil and Guterman: Mayo Clinic's Model

By Henry Weil and Stuart Guterman
Tuesday, September 29, 2009; 4:10 PM

A recent Post article asked whether the Mayo Clinic's better patient-care outcomes and lower costs provide a model for the rest of the health-care system, or if it's a "a mirage."

Mayo's performance is no mirage. In fact, there are multiple examples of health systems -- the president and other policy makers also have cited Geisinger, Cleveland Clinic, Bassett, Kaiser Permanente and others as models for health-care reform -- that consistently and reliably achieve similar results: providing good care at low cost, with high patient satisfaction.

What these systems have in common is that they are integrated systems that employ their physicians, emphasizing patient-centered care, better outcomes, and prudent stewardship of health-care resources, with accountability for results. A group of these systems met in Washington earlier this month to discuss how the elements of their success could be adopted more broadly in the context of health-care reform. They concluded that comprehensive care, collaboration, integration, and measurement and accountability, as well as strong corporate leadership, were key to their success and could provide an example for other systems.

These systems exist and succeed in the current environment, but that success is made more challenging by the payment system. Nothing in the current setup encourages collaboration among providers, and those who attempt to provide care more effectively and efficiently often are penalized by a loss in revenues. The challenge to policy makers is to provide an environment in which better practices are rewarded rather than punished.

Several recent developments offer promise of movement in the right direction, including the stimulus funding to support comparative effectiveness research and health information technology. Critically, most of the health reform legislation includes provisions to test different organizational models for providing better care at lower cost.

The benefits could be substantial. It has been estimated by researchers at the Rand Corporation and the Dartmouth Medical School that 30 percent of current U.S. healthcare expenditures -- 30 percent of $2.5 trillion, or $750 billion a year -- is spent inefficiently, on care that is not supported by clinical evidence. While the precise numbers may be debated, these figures provide some indication of the potential savings to be had from more effective, more efficient health care: Eliminating just 15 percent of the estimated inefficiency in the health-care system would yield savings of more than $100 billion per year, or more than $1 trillion over the next ten years -- essentially funding currently proposed reforms.

The promise of savings of this magnitude should be attractive to everyone, regardless of political or ideological orientation.
(end)

(my bold added)

Now why wouldn't everyone want to adapt the system to cost less, be more efficient, and lead to greater patient satisfaction? Could it be vested free market interests?

I was the one you wanted to define 'obscene profit' - how does 600% grab you? Obscene enough? We'll get to that shortly. First, a recap, since this discussion has been spread out over God knows how many pages.

So 600% is the number?? Ok, then you better handcuff the CEO of Starbucks and throw away the key.

High margin, low volume business models exist everywhere and are necessary.

Image my surprise, Scott, when your evidence to back up your claim that the free market was not to blame turns out to be an article from a woman working for The Reason Foundation, one of these wonderful 'think tanks' whose values, according to their site are, "the values of individual freedom and choice, limited government, and market-friendly policies."

Imagine my jaw dropping further since this article was posted on Forbes, "Home Page for the World's Business Leaders".

This was your evidence to support your contention that the US health industry is "far from" a free market? You cannot be serious?

To return to my original contention, that the part/semi/non-regulated, free market, free-for-all way in which the US health industry is forced to exist, is responsible for most, if not all, of the misery.

Surely you can do better than attacking the source of the information.

Your original point was to say the free market version of healthcare in the US wasn't working (or something to that effect), to which I said that the healthcare system in the USA is as about as far from a free market as you can get.

The system in the USA is not "free market".

And as an aside, I find it mildly amusing that you bash my source of info and then post crap from the dailykos.

It has been estimated by researchers at the Rand Corporation and the Dartmouth Medical School that 30 percent of current U.S. healthcare expenditures -- 30 percent of $2.5 trillion, or $750 billion a year -- is spent inefficiently, on care that is not supported by clinical evidence.

I don't doubt this number one bit. In the USA most doctors practice defensive medicine, meaning the rule out any possibility no matter how remote when patients are presenting medical conditions. Why do they do this? Fear of medical malpractice legal action taken against them.

BTW, it's something Obamacare completely ignored in the recent legislation. Why? Political donations of course.

I snipped the hoarding article due to the 10,000 character limit.

Now why wouldn't everyone want to adapt the system to cost less, be more efficient, and lead to greater patient satisfaction?

Point to one. I'm all for it. But to be honest, I'm more interested what the patient outcomes are (you know, results) rather than how patients feel about the care they received.

 

[Alpe d'Huez]

I can't keep up on the tax or health care debate here, I don't know how you guys find the time, but did want to comment on Herman Cain.

It is a shame that to speak in a reasonable manner about something, and uphold the law, would be the kiss of death. Having said that, I'm really not surprised. With the charged atmosphere, and his outspoken personality it seemed inevitable that something came out to bite him in the rear.

Cain has also been the flavor of the month for the GOP, with the tea party and "oh no, not Romney" people clamoring to find someone, anyone else. First it was Palin, then Bachman, then Perry. Then they tried to get Christie to run. When those didn't work, it became Cain. But the one thing many aren't mentioning is that Romney seems to be the only GOP candidate that understands this is a marathon, not a sprint (Howard Dean anyone?). He's also the best candidate to go head-to-head with Obama, as he is capable of moving towards the center for the general election. I used to think Perry had a chance as he could take the south, but he's shown himself to be seemingly incapable of complete thoughts or realistic plans, and Romney takes him to the woodshed every single debate.

 

[blutto]

This is all true but your econ professor left out the part about human behavior in reaction to the perception of confiscatory income tax rates.

...would be nice if you could elaborate on the particular model of human behaviour you are referring to...

Cheers

blutto

 

[usedtobefast]

I can't keep up on the tax or health care debate here, I don't know how you guys find the time, but did want to comment on Herman Cain.

It is a shame that to speak in a reasonable manner about something, and uphold the law, would be the kiss of death. Having said that, I'm really not surprised. With the charged atmosphere, and his outspoken personality it seemed inevitable that something came out to bite him in the rear.

Cain has also been the flavor of the month for the GOP, with the tea party and "oh no, not Romney" people clamoring to find someone, anyone else. First it was Palin, then Bachman, then Perry. Then they tried to get Christie to run. When those didn't work, it became Cain. But the one thing many aren't mentioning is that Romney seems to be the only GOP candidate that understands this is a marathon, not a sprint (Howard Dean anyone?). He's also the best candidate to go head-to-head with Obama, as he is capable of moving towards the center for the general election. I used to think Perry had a chance as he could take the south, but he's shown himself to be seemingly incapable of complete thoughts or realistic plans, and Romney takes him to the woodshed every single debate.

well said. i thought/think Huntsman would have been a formidable Obama foe.
mostly the Republicans seem to be in a circular firing squad.
Cain's tax plan was a nonstarter from the get go,if you read and understood what it meant. and Romney,i hope not. as bad as Obama is for now,if he gets a second term,he could really accomplish something,imo. no reelection to worry about.

 

[Alpe d'Huez]

Agree Huntsman would be a formidable candidate, and potentially make a good President. Shame he can't seem to get any traction. Not extreme enough during a volatile time. Your circular firing squad analogy was evident in the last debate, where I think Romney stood on his own, but may have hurt himself a little too. But I do think he will be a formidable candidate as well, and give him a 50/50 chance against Obama.

Still many months to go. Ask me again in a year.

 

[blutto]

Well, that may be your opinion, but the top 1% in the US likely don't know or care what people in other country's pay. I can't think of too many other explanations for the results.

...so you are trying to tell us that these rich folks who seem to know how to deal with money do not have a clue how a major cost compares across international boundaries...they most likely comparison shop for other goods and services but on this major expense they just don't bother...oh come on.

...and you can't think of another explanation?....as in there is no explanation whatsoever or there is no explanation that fits your pre-conceived idea of what an explanation should be...I strongly suspect its the latter...

Cheers

blutto

 

[ramjambunath]

Man on Death Row Immolates Himself

Happened on the 9th of August this year, a few hours before his scheduled time to be hanged.

Has this happened where any of you guys live or do you recall any similar incident?

 

[knewcleardaze]

Here in the U.S., suicide by cop is popular.
Man robs bank. Takes bank manager's SUV and flees.
Robber loses control of SUV while police are in pursuit.
Robber waves gun and threatens police.
Police shoot and kill robber.

 

[ramjambunath]

That's very common here (in a different form though ie not robbers but the underworld), it even has a name here- encounter killing.
Serious injuries during interrogation is also commonplace here but I never recollect a man, about to go to the gallows in a few hours, ever kill himself. He must have been swift and would have been ready for the specific moment.

 

[Merckx index]

The corresponding percentages represent amount of income as a percentage of the total. Under Bush the top 1% not only made more, they paid a higher total percentage of their income (not tax bracket, but percentage of income).

The only explaination I can think of is behavior. It's not that they use their CPA's less, it's that they become more aggressive... willing to push boundries and taking more audit risk.

You're missing it. It's not behavior, it's math. The top 1% paid a higher percentage of their income in taxes because a higher % of their income was in the highest tax brackets. As I said before, if you compare equivalent incomes, the Clinton incomes paid a higher % in taxes. Tax brackets are always designed around income levels, not percentile levels.

The data are just what one would expect. The higher the income, the higher the tax rate. If you look at just one side of your table at a time, maybe it's easier to appreciate. If you look at Clinton data on the right, the higher the income listed, the higher the % paid in taxes (with one small exception that can easily be accounted for). If you look at just the Bush data on the left, you again see that the higher the income level, the higher the rate of taxes.

This is because higher income means more income distributed in higher tax brackets. If your income is $300K, more of that income will be in, say, the 33% bracket than will be the case if the income is $200K. So the overall tax rate, or % of income paid in taxes, which is the average of each tax rate paid in the different brackets, will be greater.

Now if you compare one income level for Clinton with the same income level for Bush, such as the $290K, you see that under Clinton the % paid in taxes is higher. This is because the tax rates were higher under Clinton. But if you compare a higher level of income under Bush to a lower level of income under Clinton, two opposing factors are in play. One, the tax rates were lower under Bush; two, the % of income paid in taxes is always higher with higher income. When the difference in income levels is substantial, the latter factor more than overcomes the former factor, and the result is that a higher overall tax rate was paid under Bush.

If this still isn't clear, consider a hypothetical extreme example. You pay no tax on income up to $100K, then 50% tax on all income above that. So if you make $100K you pay no tax; if you make $200K, you pay $50K; if you make $300K you pay $100K. Now suppose the rate is lowered to 45%. You pay nothing on $100K as before; $45K on $200K; and $90K on $300K.

So in the first case, you pay 25% of your income in taxes if you make $200K (50/200), and 33% if you make $300K (100/300). In the second case, you pay 22.5% on $200K (45/200) and 30% on $300K (90/300). The first is like the Clinton rates, the latter like the Bush rates.

Now suppose that in our example, a larger % of individuals earned money at all the higher levels in the Bush years than in the Clinton years. A larger % earned $200K under Bush, a larger % earned $300K, and so on. So it turns out that, say, the top 1% under Bush earned $300K or more, the top 5% earned $200K or more,while under Clinton, the top 1% earned only $200K or more, while the top 5% earned $100K or more.

Thus the top 1% under Bush is people earning $300K or more, and their rate is 30%. The top 1% under Clinton is people earning $200K or more, and their rate is 25%. This is what the table is showing. When you compare percentiles, you are comparing different income levels, and thus you see a greater % of income paid in tax, even though the rates at each income bracket were lower under Bush.

If you want to argue that the reason the % levels were higher under Bush was because of greater economic growth, then discuss what caused that growth, that is another issue. But there is nothing in these data that show that lowering tax rates will result in someone paying a larger proportion of taxes on a particular level of income. That really would be voodoo economics.