tag:blogger.com,1999:blog-8241505550351823820.post9195724134492668141..comments2024-02-11T06:57:23.174-05:00Comments on SchansBlog: Obama flip-flops as a hypocrite-- into a tough political position-- but finds the best economic answer!Eric Schansberghttp://www.blogger.com/profile/16147388189415035752noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-8241505550351823820.post-59256204679227447372009-03-22T23:10:00.000-04:002009-03-22T23:10:00.000-04:00Shamgar, thanks for your thoughtful comments. A fe...Shamgar, thanks for your thoughtful comments. A few thoughts in reply...<BR/><BR/>First, I probably should have been more explicit. But a tax on health insurance (or other fringe benefits) would ideally imply lower taxes elsewhere. Of course, with Obama and the Dems, they're just looking to increase taxes. So, if they're going to increase taxes, this is preferred to other methods. <BR/><BR/>Second, to be clear: health insurance is currently being subsidized-- which creates as many (albeit different) inefficiencies as a tax. <BR/><BR/>So, what should we do about the current subsidy through the lack of taxation for that one type of compensation? A tax on that form of compensation would merely "even the tables"-- simply treating all forms of compensation equally in terms of taxes. Putting it another way: Why tax wages and not tax fringe benefits? <BR/><BR/>You raise a valid point about the manner in which the tax is imposed. If the tax is imposed on firms, some/much/all of the burden will be passed along to consumers and especially workers. Let's say that firms drop health insurance coverage. Then, they will have to offer something else-- most likely, higher wages-- to attract workers.<BR/><BR/>Most individuals would still choose "true" insurance. High co-pay, high deductible, minimum coverage-- i.e., coverage for rare, catastrophic events. Such coverage would resemble typical insurance (for, e.g., fire and auto) and be quite inexpensive compared to the status quo. <BR/><BR/>The market is limping that direction now; a tax on fringe benefits would rapidly accelerate the pace of that move.Eric Schansberghttps://www.blogger.com/profile/16147388189415035752noreply@blogger.comtag:blogger.com,1999:blog-8241505550351823820.post-82899774639302662952009-03-22T18:03:00.000-04:002009-03-22T18:03:00.000-04:00Some how I don't think you've really thought this ...Some how I don't think you've really <A HREF="http://www.ratemyeverything.net/image/1321/0/Boy_Sticking_Knife_in_Socket.ashx" REL="nofollow">thought this through</A>. <BR/><BR/>While I agree that subsidizing health insurance is not a great thing, there's some really serious downsides to this proposal.<BR/><BR/>While subsidizing creates incentives, taxation creates disincentives. So lets say this goes through as a tax that corporations pay, in order to try to hide the pain from workers. As you and I both know, that pain will be passed on in some way. And, if universal "health-care" is being provided and the economy continues to squeeze businesses, they will simply cancel their policies. Why pay for it when it's being provided for free?<BR/><BR/>Some of the best companies will continue to try to use it as an incentive, something not everyone is providing anymore, but as more and more people get the lowest-common-denominator coverage, they'll not want to bother with the hassle of it being connected to their workplace. Which means the only people attracted to that option will be those least desired by the insurance company, causing skyrocketing premiums and further hastening the demise of privately funded health-care.<BR/><BR/>Further, you have to pay for a portion of the health care in your check for most companies, so there's a disincentive there for most people as well, at least until they actually NEED health care, and would give up their own kidney to deal with an HMO let alone a GOOD insurance company.<BR/><BR/>If they pass it off to workers it's the same story just different actors and choices. If you're paying for part of it, and start getting taxed, and can get it for free if you just stop taking health-care as a benefit, what do you think people are going to do? We've already been driven to the point where the women in most of our families HAVE to work. Some families have to have their teenagers work just to make it. Now they're going to tax health-care benefits? They'll be looking for any way to cut costs they can.<BR/><BR/>Once this happens now what? Now what do they do to fund the health-care system? Where do they go to get the money when there's no longer any health benefits to tax?<BR/><BR/>Same problem as sin taxes. If you actually succeed in lowering the usage, suddenly you don't have the money for whatever bogus government program you were funding with it, and now you have to either raise the taxes more until it dies a thousand deaths or find some other place to tax people.<BR/><BR/>No - this is a bad idea. Get rid of the subsidy? Fine. Tax health care benefits, no way.Unknownhttps://www.blogger.com/profile/18343310535708699841noreply@blogger.comtag:blogger.com,1999:blog-8241505550351823820.post-226256701800496422009-03-21T21:53:00.000-04:002009-03-21T21:53:00.000-04:00Wow interesting material Mr. Schansberg, a good po...Wow interesting material Mr. Schansberg, a good post. Politicians say anything to get into Office...I was expecting this during the campaign in 2008.<BR/><BR/>Isn't Obama's budget around $634 billion?...estimated cost of Universal Health Care being around 1.5-1.7 trillion I believe. While I do hope Obama's presidency is a successful one, I don't agree because taxpayers will be making up for this!<BR/><A HREF="http://www.jclis.com" REL="nofollow">J.C. Lewis.com!</A>Jay225https://www.blogger.com/profile/16462084435641083439noreply@blogger.com