…is a single payer system actually any cheaper, once the deadweight costs of…taxes are taken into account?
More here, this man would warm the heart of Doug Gibbs. I recall learning that deadweight losses from taxation are about 20 percent of revenue raised, which is just about the size of overhead costs for the private insurance industry. Don’t ignore this sentence either:
The French system, the one that is generally rated as being number 1 globally, is neither single payer nor single provider.
Of course, the taxes and benefits of national health care together need not be distortionary, so long as the taxes’ effect on labor supply counters effect of the health care subsidies on labor supply…
For instance, the French system, like our Social Security, caps the tax rate as a miximum of salary. This regressivity may counterbalance labor supply effects of the national health care subsidy.
Coach,
I don’t get it either. How is shifting payment from one group of parties to another going to add 20% deadweight loss? 20%? It just doesn’t make any sense.
theCoah, mickslam:
All taxes create deadweight loss. When taxes increase, people stop doing some activities because they are no longer worthwhile. Deadweight loss is the loss to society of having forgone those productive activities. Wikipedia has a fair description of it, although the picture does not represent a tax increase.
Mickslam, I do not think you understand deadweight loss in the sense it is being used here. What Worstall is talking about is that for every $1 you raise through taxes, you cost the society $1.20. That would be a 20% loss. Glen Raphael gives a simple example. My understanding of what determines this loss is mostly the marginal tax rate. Increasing a low marginal tax rate incurs less deadweight loss than increasing a high marginal tax rate. Certainly whether it is an extra tax to pay for health care or interstate highways does not matter. Either way, the claim is that in the US right now, the loss is 20% for the total budget. The marginal rate may be higher. So the government can certainly pay those premiums for us, but for every $1 the government spends we lose $1.20. This means that to get the same coverage if the government can’t save 20% on the premiums it pays, we lose overall in the deal.
On the side, there may be some distortion present already due to the subsidization of current insurance premiums that a commentator on Worstall’s site brings up, but I can’t speak to that.
Consider the case where both labor supply and the demand for health insurance are perfectly inelastic. In that case, the normal need for health care acts just like a tax, and if you replace that tax with a labor income tax paid to the government to support the same health care, there is no distortion. The subsidy from government provided health care exactly offsets the effect of the tax (assuming that the government provides the same health insurance package that is demanded inelastically in the absence of government coverage). In practice, neither labor supply nor the demand for health insurance are perfectly inelastic, but both are quite a bit more inelastic than your average curve. The 20% figure, I suppose, is derived from a “typical† market (widgets?) and would not be a good estimate in this case. Depending on how the tax is implemented, it could affect the demand for human capital, but I doubt this effect would be large, and it could well offset existing distortions (e.g. signaling).
thanks knzn for explaining my point so very well. In this particular case, the deadweight loss will be far less than 20%.
Alex,
We’re not disputing the fact that there is deadweight loss with this thought experiment and that there will be a deadweight loss when this is implemented. We’re only disputing the the size of Tylers estimate. Even in your hypothetical example, the deadweight loss is not as large as it would be if there was a 100% tax and it was spent on things that you would not have purchased. In that case, the deadweight loss would be far larger than in the case you propose in your link. It’s this magnitude that is the debate, not the loss itself.
My claim: The deadweight loss from this tax will be far less than 20%.
Mickslam and knzn, I agree that we are debating the magnitude of this loss but what Tyler and Alex have claimed, and correctly in my opinion, is that this tax will create a deadweight loss just the same as any other income tax. Alex’s post on the 100% tax highlights the problem with the flaw in knzn’s reasoning: when you shift the funding of something from the private sector to the public sector, that is precisely when you incur the deadweight cost (in that case a total loss, of course).
Looking at knzn’s example in particular, it is precisely wrong to assume that the labor supply is inelastic. Right now, we work in order to pay for our own health care. But if the government were going to tax us to pay for it, then what happens? Well, I’ll get the same health care regardless of how much I work. So I’ll work less b/c I’m getting taxed at a higher rate and I’ll still get the same health care!
We can debate the absolute inelasticity of labor supply, but there is no sense in which the response of labor to this tax would be any different than to any other tax. And any thought experiment which does not take into account this elasticity will of course miss the deadweight loss occurred by any tax. But there is a reasonable amount of evidence on the issue of labor elasticity, which is where the 20 percent comes from. Its by no means super-accurate, but it is a good ballpark number.
I can’t read the papers, but they do not really seem to be addressing this directly – of course I have no idea what the 4 parameters are that would get us an answer from less then 10% to 300%.
Is the mechanism by which this would affect this only in disincentive to work? Because if it is, I find that to be a positive – or at least I find using the witholding of health care as a punishment for not working to be morally reprehesible in this day and age. I do not know enough to figure out the details, but I would think that work could be incentivized differently, but perhaps it forever skews the tradeoffs between work and vacation, something I would not consider bad either.
写å—楼
玻璃瓶
类风湿
风湿
嵌入å¼
嵌入å¼åŸ¹è®
嵌入å¼å¼€å‘
Embedded Linux
嵌入å¼Linux
æ¡ç 扫æ器
æ¡ç 打å°æœº
æ•°æ®é‡‡é›†å™¨
マンスリーマンション
TOEFL
巨乳
転è·
別れã•ã›å±‹
光盘å°åˆ·
光盘刻录
光盘制作
租房
求租
写å—楼出租
写å—楼租èµ
厨房设备
油烟净化器
风柜
æ¡ç 检测仪
æ¡ç 打å°æœº
æ¡ç 扫æ器
æ•°æ®é‡‡é›†å™¨
æ ‡ç¾æ‰“å°è½¯ä»¶
碳带
æ ‡ç¾
录音电è¯
录音系统
èšç¾§é…¸ç›å‡æ°´å‰‚
èšç¾§é…¸
èšç¾§é…¸é«˜æ•ˆå‡æ°´å‰‚
防é™ç”µåœ°æ¿
ä¼ å¥‡ç§æœ
防窜货
èŒåŠ¡çŠ¯ç½ª
æ— è´ŸåŽ‹
猎头
猎头公å¸
猎头顾问
广州猎头
上海猎头
å‘电机
å‘电机组
å‘电机出租
å‘电设备
å‘电机租èµ
租èµå‘电机
出租å‘电机
空气过滤器
北京婚庆
北京婚庆公å¸
进销å˜è½¯ä»¶
进销å˜
erp软件
生产管ç†è½¯ä»¶
瑜伽
北京瑜伽
瑜伽教练培è®
肚皮舞
肚皮舞培è®
ä¸å¤®ç©ºè°ƒ
家用ä¸å¤®ç©ºè°ƒ
æ ¼åŠ›ä¸å¤®ç©ºè°ƒ
ä¸å¤®å¸å°˜|商用ä¸å¤®å¸å°˜|家用ä¸å¤®å¸å°˜|工业ä¸å¤®å¸å°˜|别墅ä¸å¤®å¸å°˜
家用ä¸å¤®æ¸…扫系统|宾馆å¸å°˜|ä¸å¤®å¸å°˜ç³»ç»Ÿ|别墅å¸å°˜
拆除
拆除公å¸
建ç‘物拆除
鱼鳞病
ä¸é”ˆé’¢æ°´ç®±
防雷
防雷器
大å±å¹•
快速熔æ–器
高压熔æ–器
低压熔æ–器
熔æ–器
按钮
塔钟
法è¯
按钮开关
船型开关
微动开关
钥匙开关
旋转开关
法è¯åŸ¹è®
婚纱摄影
网站建设|网页设计|网站制作|网站推广
润滑油
连接器
山东助å¬å™¨ä¿¡æ¯ç½‘
上海助å¬å™¨æ€»æ±‡
北京助å¬å™¨ç½‘
æ–°å¼€ä¼ å¥‡ç§æœ
日光温室
节水
rohs认è¯
3C代ç†
强制认è¯
汽车进å£
æœ€æ–°ä¼ å¥‡ç§æœ
助å¬å™¨
贵州助å¬å™¨ä¿¡æ¯æ¸¯
åå“助å¬å™¨ï¼ˆå—京）直销店
广西助å¬å™¨éªŒé…网
æå·ž 助å¬å™¨éªŒé…ä¸å¿ƒ
广东 助å¬å™¨æ€»æ±‡
æµ·å‚
紫外线消毒器|æªç“·æ°´ç®±
è¿›å£è½´æ‰¿
轴承
è¿›å£è½´æ‰¿
玻璃钢水箱|æ— è´ŸåŽ‹
è¿›å£è½´æ‰¿
网站优化|google优化|google推广|google排å
北京网站建设|åŒçº¿ç©ºé—´
虚拟主机|åŒçº¿ç©ºé—´|asp空间|
éžæ²¹å“
ä¸çŸ³åŒ–
冬虫å¤è‰
生æ€é¤åŽ…
丰胸
婷美|婷美内衣
按摩椅
æˆäººç”¨å“
血糖仪
血压计
å‡è‚¥|瘦身
按摩椅
东方神
丽立美
足浴盆
高佰增高鞋
增高鞋
éšå½¢å¢žé«˜éž‹
è·‘æ¥æœº
纤诗婷
矫形内衣
如烟
气血循环机
爵士纯烟
背背佳
紫环
颈椎治疗仪
疯狂甩脂机
瘦身
甩脂机
å‡è‚¥
锅王
丽姿
婷美é”脂定型衣
婷美é”脂定型内衣
大长今
å–œæ¥å¥
å¥å°”马鼻炎仪
眼ä¿å§†
钻石炉
手机æ‹äºº
æ£å¤§ä¸è€
血压计
血糖仪
外国為替
ホスト
ヘアスタイル
カップリングパーティー
ジュエリー通販
渋谷サãƒãƒ³
ビューティーサãƒãƒ³
ã‚¢ãƒãƒžãƒžãƒƒã‚µãƒ¼ã‚¸
å…本木マッサージ
転è·
ペット　宿
水虫
除èŒ
賃貸
ä¾¡æ ¼æ¯”è¼ƒ
デリãƒãƒªãƒ¼ãƒ˜ãƒ«ã‚¹
外国為替
ホスト
ヘアスタイル
カップリングパーティー
ジュエリー通販
渋谷サãƒãƒ³
ビューティーサãƒãƒ³
ã‚¢ãƒãƒžãƒžãƒƒã‚µãƒ¼ã‚¸
å…本木マッサージ
転è·
ペット　宿
水虫
除èŒ
賃貸
ä¾¡æ ¼æ¯”è¼ƒ
デリãƒãƒªãƒ¼ãƒ˜ãƒ«ã‚¹
外国為替
ホスト
ヘアスタイル
カップリングパーティー
ジュエリー通販
渋谷サãƒãƒ³
ビューティーサãƒãƒ³
ã‚¢ãƒãƒžãƒžãƒƒã‚µãƒ¼ã‚¸
å…本木マッサージ
転è·
ペット　宿
水虫
除èŒ
賃貸
ä¾¡æ ¼æ¯”è¼ƒ
デリãƒãƒªãƒ¼ãƒ˜ãƒ«ã‚¹
Please come to cheap shadow of legend Gold, we will give you a great surprise.
Comments on this entry are closed.