Should taxes be raised? No, seriously!!!!

Great Debates
41

Raising taxes can actually mena the government has less money to spend on programs.

Taxes drag on the economy. Too much tax, and the economy slows, revenues go down. Tax receipts drop.

It’s the old question: Would you rather have 50% of a ten dollar a day business or 10% of a $100 a day business?

Ideally, in determining taxation to maximize government revenue, we need to set the tax rate that gives us the highest 2nd order growth in tax revenue.

That’s a situation in which everybody wins. Any short term capital shortages within the government can be funded by the issuance of Treasurys with with maturities estimated to match the revenue increase.

A number such as this optimizes both economic growth and tax revenue, and produces more revenue over time, than overloading taxes.

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Yes, Scylla, we have all heard about the wonders of the Laffer curve and lower taxes giving higher revenues and all that groovy stuff. But, the problem is that saying it doesn’t make it true.

The two most obvious problems I have with the Laffer curve:

(1) Just drawing the curve doesn’t prove anything. The question is where are you on that curve. My guess, comparing with other countries that have considerably higher tax rates is that we are still at the point where the curve is going up, although admittedly not at the same slope it started with. But, I have never heard anyone even try to make a serious argument about where on the curve we lie. They seem to believe that just drawing the curve proves their point.

(2) One also has to remember that the Laffer curve is a vast oversimplification in that it collapses an essentially infinite-dimensional problem onto one dimension. Admittedly, there are probably some things taxed to the point that if we further raised taxes on them then we would indeed get less revenue now. (None jump out at me, but I am willing to believe they exist.) And, then there are other taxes that we haven’t even begun to exhaust the revenue-making capacities of.

So, I think that the only real contribution of the whole Laffer curve stuff to the economics debate is an awareness that taxation does change people’s habits and will most often tend to do so in a way that would yield less revenue than you would predict by the most naive estimate of just multiplying the tax by the current amount of income, buying of the product, or whatever you are talking about. (Although there are probably some exceptions to this too…Since some people have mentioned evidence that, for example, a less unequal distribution of wealth might lead to higher economic growth rates. I have to admit that I am not familiar with the data / evidence on that.) But, didn’t we already know that anyway (refering back to the stuff prior to my long parenthetical statement)?

And, finally, just to add a point about the whole social security thing: I think it is a bit disingenuous to talk about the 2% returns one is getting on SS and argue that one should be able to do better than that. Because, social security ain’t a pension plan…The monies that go in today are not being invested for the most part; most of it is being used to pay current pensioners. And, admittedly, those who got in at the beginning got a good deal of getting out a really good effective rate of return. Now, you might want to complain about this and say that this is not what you want. But then it is incumbent on you to say whose benefits you are going to reduce when you turn all or part of it into a privatized pension fund.

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jshore:

An excellent post. We’ve spoken on this before, you’ll recall. You’ll also notice that I didn’t say whether this meant that we should raise or lower taxes. I merely submitted it for consideration.

Comparing our level of taxation to other countries is not a valid determinant for choosing our tax-rate. Our tax-rate might be just right and everybody else high, or, we might all be high, or all low. What other countries do is a moot point.

Of course, other factors will determine the optimum tax rate as well. Things like interest rates and inflation will move you up or down the curve.

It’s something to think about when contemplating changing tax rates though, wouldn’t you agree?

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Thanks. I vaguely recall, although I don’t remember exactly where we went with it.

Yes, my point is merely that these other countries would probably have already discovered this problem that their taxation is crippling their economies and leading to less revenues if it were already the case that our right was on the down-side of the Laffer curve.

Yes, on this I will agree with you.

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Other ***ifs *** should stipulate ** if ** SS doesn’t collapse, ** if **SS doesn’t decrease benefits, and ** if ** SS does increase the retirement age. Sure, there are ifs and risks on both sides, there are no guarantees either way. The claiming that the average investor wouldn’t gain as much in privatization is wrong on at least two reasons. 1) Assumes that the average person couldn’t learn good investing habits or skills; 2) SS payments will not cover the entire cost of retirement so everybody must invest in 401K, Government Bonds, Mutual Funds, ect in order to fund fully their retirement unless they want to continue working; 3) Assumes that an average investor couldn’t do better than the 3% bonds in the Social Security Trust Fund; 4) Insinuates that it is bad for some people to earn more than others with retirement plans, that everybody should be on an equal base.

I’m only going to address two of the objections listed above:

On (3). I think an average investor could do better than 3% and do better than SS payments. Just for the sake of argument, let us assume that is a complete privatization option is the norm. John Doe is 18 and graduates from high school; he is not all the bright, but he is an okay worker and gets a job at Home Depot. He works there 47 years without getting a promotion, then retires. To make things simple, let us assume inflation and cost of living stay the same, so we’ll skip over them in our calculations, and his yearly salary is $17,680.00 or $8.50 an hour. At retirement, assume SS would pay him half of his yearly pay, or $8,840.00. New let us assume he privately invested the 12.4% combined SS tax at 3%. After 47 years he would have $226,671.00 in the bank and earn $6,800.00 in interest. John will not touch his principle because he wants to leave an inheritance. Not quite as good as an SS payment, but almost and his kids get a big chuck of change when he dies. Now let us assume a 3.5% return: $261,699.00 in the bank and $9,159.00. Better than SS payments! At 4% return: $303,072.00 in the bank and $9,159.00 in interest. Okay, now well use the save rate of return most investment guides say is realistic 7%: $772,176.00 in the bank and $54,052 in interest; poor John Doe earns three times the income in retirement than he did working; poor, poor John. Now for a rate of return a little short of what Pyrrhonist and Mrs. Pyrrhonist earn 10%: $2,102,505.00 in the bank and $210,250.00 in interest.

Alas, John Doe doesn’t have the option of private investments on the 12.4% combined tax. He is stuck with SS.

(Calculations by Pyrrhonist and Excel.)

Okay, you’re gonna say these are very rosy numbers. That I’ve simplified the complexity by not figuring in inflation, promotions, lay offs, et al. Maybe so, but maybe not entirely so. The potential to earn vastly more in privatization exists for even the average investor in less than rosiest circumstances.

On (4): SS has a very Rawlsian-like approach, believing that everybody would be willing to take potentially less than privatization because some people may earn less and nobody wants less, so SS guarantees a middle ground as the “fairest” scheme. Well, John Rawls and his Theory of Justice is a bunch of hooey and SS ain’t any better. I think is fair that some people may gain more than others with the privatization of SS. A few people may be worse off, but they would probably be the kind to be in a bad straight no matter what they did.

First of all, I have no objection to the GI bill. The men and women who serve in this country’s armed forces have earned this scholarship. I think scholarship might be a bad word is describe the GI bill, perhaps benefit would be better. It is definitely quid pro quo.

General scholarships, as the ones you suggest, would not be quid pro quo. The program would flood the market with college degrees and make them nearly as common as a high school diploma. Once, three or four decades ago, students may have learned valuable skills and knowledge in college, but today they earn degrees. Some of this may have been the influx from the GI bill, but I have no evidence to support it. Although I never graduated from college, I’ve been to three different Universities. The first two times I studied English Literature, but I didn’t learn much in the classroom, I learned much more reading Literature on my own for pleasure. The third time I went back to school I studied Network Engineering, but the teachers were mostly bumbling and inept and I learned that you can’t learn about networks in the classroom. Sure, I could have gotten a degree in Network Engineering but I wouldn’t have known what to do in a real environment. Your general scholarship plan assumes that the student will somehow be improved by the degree and not simply have a degree to please the high muckamucks in Human Resources.

I base my information on an article I read in 1996 or 1997 in Time, Newsweek, or the Washington Post. I can’t remember the exact source. It described the efforts of the French Government to increase the slumping birth rate by offering a generous “baby bonus” to women, then wondering why the birth rate was still going down. Was it really a negative birth rate? Maybe, or maybe not. I read it a long time ago and I could misremember that detail. At the time I talked about the article with Mrs. Pyrrhonist and we concluded that the French citizens must not be all that happy as the French Government would want them to be. Personally, I’m in favor of lowering birth rates in this country and every country, but the French Government saw the decline in births as disastrous.

Do you want to discuss the high unemployment in France? The Government decided to strictly limit the work week to 32 or 35 hours. Nobody, not even the CEO, could work beyond the limit or take work home. The theory is that companies would have to hire more help to cover the deficit of hours not worked by limiting the work week. Sounds wonderful doesn’t it. I can’t remember the source.

Last month I bought a new telephone, but in broke down within two weeks. I didn’t fill out the warranty card, so the phone is going into the trash. It is a “bad” phone, it doesn’t work. If I had done my part and kept the store receipt or filled out the card, the phone could have been replaced or repaired, but it didn’t happen and I’m out the cost. The same goes for people. The people who can’t “pick up the shattered pieces and get on with life” are the one who dropped the ball somewhere along the way, the ones who tossed out their “life’s receipts” and didn’t fill out “life’s warranty cards.”

Take the tax deduction if it is legal. You’re not making a any meaningful point by letting the Government keep it or upholding any great moral by not claiming it. Charities are tax deductible for good reasons and nobody is a better person for letting the Government keep that slice of the pie IMHO. You can always donate that little refund to another charity. :slight_smile:

**

Where is your point of no return for the “unrescuable?” It seems to belay the point that every human life is “sacred” because it admits that some people must be allowed to sink. I would have thought you believed that every life is sacred, but maybe I was wrong. Maybe we are picking around the edges on who is and who is not worth saving. Or who is and who is not worth educating.

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(Thanks jshore! I was beginning to crack under the strain and could not have handled the Laffer curve as well. :))

Pyrrhonist: *The claiming that the average investor wouldn’t gain as much in privatization is wrong on at least two reasons. 1) Assumes that the average person couldn’t learn good investing habits or skills; 2) SS payments will not cover the entire cost of retirement so everybody must invest in 401K, Government Bonds, Mutual Funds, ect in order to fund fully their retirement unless they want to continue working; 3) Assumes that an average investor couldn’t do better than the 3% bonds in the Social Security Trust Fund; 4) Insinuates that it is bad for some people to earn more than others with retirement plans, that everybody should be on an equal base. *

Okeydokey, we obviously need to clear up some fundamental issues here.

First, as jshore pointed out, it’s not really fair to call SS a pension plan (though I’ve been guilty of blurring this distinction too). It’s more of a “social insurance” program that doesn’t manage your individual retirement investments, but rather collects “premiums” from workers and pays out benefits, not just to retired workers but to disabled workers and workers’ families. So if we’re going to compare the performance of SS to private investment and insurance, we have to take into account all its functions. Now for your points:

  1. Nobody’s saying that investors can’t learn investing skills. I’m just saying that to assume that all investors, or even the vast majority of investors, will be successful in funding their retirements solely by private investment is an extremely optimistic idea.

  2. Right. Social Security is not a pension plan, much less a comprehensive pension plan. It’s supplemented by private investment, which means that the combination of SS benefits and personal investments will give different people different levels of wealth in retirement.

  3. See point 1. Yes, SS is in many ways a bad risk if considered just as an investment, but that’s because it’s not an investment. If I (with no dependents) croak tomorrow, for example, my personal retirement savings will be inherited by my designated beneficiaries, but the money I’ve put into Social Security will be gone with the wind. Is that the way I expect a pension plan to work? No way. Is that the way I expect an insurance policy to work? Yes. For example, when I went to live in India, I purchased travel insurance (which covers emergencies like flying you home fast in case of severe sickness or shipping home your corpse in case of ultimate sickness), and many people who participate in adventure sports like rock climbing have to pay a sort of accident insurance premium before being allowed to use certain wilderness sites. Do we get our money back if we end up not needing the services? No; it goes into the pool that pays for benefits to people who do need the services. That’s what your Social Security payments are doing. They eventually help to pay you some benefits when you’re eligible for them (if you survive to that point), but they are not money that you invested for your own use later on.

  4. Of course there’s nothing wrong with some people having more money in retirement than others, and nobody’s insinuating that there is. See point 2.

First of all, I have no objection to the GI bill. The men and women who serve in this country’s armed forces have earned this scholarship.

No argument there, but let’s get our terms clear: the program I’m talking about is the Servicemen’s Readjustment Act of 1944, which gave free (oops pardon me, “free”) higher education to those who had served in WWII. This is not the same as current Armed Forces scholarships and education benefits.

*General scholarships, as the ones you suggest, would not be quid pro quo. The program would flood the market with college degrees and make them nearly as common as a high school diploma. *

Um, I don’t think you looked up my references about what the GI Bill actually entailed. It did indeed “flood the market” with college degrees: in 1947, veterans constituted half of US college enrollments, and the program helped to boost the number of college graduates from about 160,000 annually in the 1930’s to 500,000 annually in 1950. And this did not “devalue” a college diploma.

Also bear in mind that I have never been suggesting that the government should sponsor universal higher education. What I’ve been saying is that we could sponsor a lot more college education to increase the average knowledge and skills of the work force, which would provide a big economic and social boost, just as the G.I. bill did. (We could do it through a public-service program like VISTA or Teach for America, if you feel it is essential to mandate service to the country in return for education benefits.)

Once, three or four decades ago, students may have learned valuable skills and knowledge in college, but today they earn degrees.

Cite, please? I certainly learned some valuable skills and knowledge in college fifteen years ago, just as many of my students do today; and I would guess that most college graduates on this board feel the same way. I’m sorry that your own higher education experience was not rewarding, but what factual evidence do you have for thinking that most people’s experience was similar?

*At the time I talked about the article [on French birth rates] with Mrs. Pyrrhonist and we concluded that the French citizens must not be all that happy as the French Government would want them to be. *

So higher birth rates mean a country is happier? Then how do you explain the fact that the highest birth rates are in countries like Afghanistan (41.82 per thousand) and Chad (41.81)? I always understood that declining birth rates correlated with higher levels of education and prosperity and lower infant mortality, and I don’t understand what reasoning you’re using to draw the opposite conclusion. In any case, as I pointed out, the effective French birth rate is almost equal to the American one, especially when infant mortality is taken into account, so I don’t think this does much to support your argument for a superior quality of life in the US as compared to France.

Do you want to discuss the high unemployment in France?

Sure. (You know, just typing “France unemployment” or “France birth rate” into a search engine would provide you with a lot of the factual data that you are fuzzily remembering or misremembering from some previous reading, and it would save me all this research to get the facts straight. :)) I never said that high-tax, high-service economies can’t have problems, and I agree that persistent high unemployment is a real problem. But France has recently instituted tax cuts and various economic growth measures, and as a result is seeing its growth rate rise (to 2.9% in 1999) and unemployment fall (to 9.5% this past September), without throwing out its socialized programs. This is far from a complete solution of their economic problems, but it indicates that some progress is being made. So I can’t agree with you that France provides an illustration of the inability of a high-tax, high-service system to do well economically, though naturally I concur that it, like all other systems, will never be problem-free.

The people who can’t “pick up the shattered pieces and get on with life” are the one who dropped the ball somewhere along the way, the ones who tossed out their “life’s receipts” and didn’t fill out “life’s warranty cards.”

Which conveniently relieves you of any obligation to help them, since their problems are ultimately their own fault. You have a perfect right to feel this way, but I don’t happen to agree with you, especially since I think you are putting much more of the poor population into the “unsalvageable” category than I would.

I would have thought you believed that every life is sacred, but maybe I was wrong.

Well, I certainly feel that if I saw another person’s life in obvious immediate danger, I would have an obligation to try to save them without waiting to find out whether they were “good people” by your definition or whether they were just the useless scum who “didn’t fill out life’s warranty cards.” :rolleyes: But that does not mean that I believe that tax-funded social programs, whose resources will never be infinite, have an obligation to keep devoting very large sums to the assistance of people whose lives will always be self-destructive and non-productive.

Even if we do end up adopting a policy of universal material rights so that we never let anyone, however “useless”, die for mere lack of basic food and shelter and medical care (which I think would be a good policy), such people will always be needy and poor. And there really won’t be anything we can do to change that, because as pldennison pointed out, it’s not a question of their luck but of their choices; so no, I don’t see a social obligation to devote more than the barest minimum of assistance to people who have shown themselves to be beyond help. You know, just because I’m a liberal doesn’t mean I’m unrealistic or dumb.

Now on to talking tax turkey for manhattan and Wrath.

Wrath: *Income redistribution is the primary action of communism, is it not? *

snort Oooh, well spotted! And you know, communists use toilet paper too! I sincerely hope you’re not prone to any of these communist tendencies! C’mon, let’s keep our heads here: there is no society in the developed world (and probably none elsewhere) that doesn’t practice some amount of income redistribution in the form of mandated contributions by the haves to fund some benefits for the have-nots. This does not necessarily imply that they support classic communist or pseudocommunist social goals such as state ownership of all means of production or the abolition of private property or an exactly equal distribution of resources. Grown-up people should be able to discuss what the advantages and disadvantages are of different levels of income redistribution in a mixed socialist/capitalist or welfare-capitalist economy (a characterization that applies to our system as well as to European ones) without throwing around accusations of communism.

Let me start out by reassuring you that no, none of the revised systems that I thought sounded like good ideas would end up taking 80% or 90% of your money. I have been trying to find a detailed budgetary assessment of the proposed tax systems that I thought were most interesting, such as Robert Frank’s progressive consumption tax or Richard Gephardt’s proposal for tax simplification by broadening the tax base, lowering rates, and eliminating loopholes; but I didn’t come up with anything sufficiently quantitative in Web sources.

So since I said that universal health coverage was the service that I considered most immediately deserving of any new government revenues that might be going around, I’ll get behind (with some reservations) the financing proposal of Edie Rasell. See Table 3 in this link for more details on tax changes: but what it comes down to is that no new net funds are budgeted for the single-payer system (because of the reductions in administrative costs, among other factors), but the most regressive part of the funding stream (premiums and direct payments to providers by patients) would be replaced by progressive funding via increases in the personal income tax. This would involve adding 2% to the federal tax for the average (third quintile) household income. Given a current effective tax rate (defined by Rasell as “share of income actually paid in taxes, after deductions, exemptions, and other adjustments are made”) for this middle quintile of 5.6%, it would rise under this system to 7.6%. You, manny, are in the fourth quintile according to the feds (although Rasell’s weird system of ranking by share of poverty-level income—huh??—may not correspond exactly to that), so your effective rate would increase from 8.1% to 10.9%. Not all that communist, huh?

Whew, that was a lot of work. I’m outta here. You all have fun with this, and a very happy Hanukkah/solstice/Christmas/day off to all.

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Kimstu:

There are many ways of going to college without it being free. I worked up to 3 jobs and borrowed money from my future employer to pay for my tuition.

You are the type of person who just basically doesn’t want to work for anything. If your papa was a wealthy man, I suppose you’d just ask him for the money, after all it’s much easier than working for it. If this is a socialist country then it’d just be free too, paid for by other working people. Maybe it’s time for you to stop asking for “free” stuff and work for it yourself.

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Yup, that’s the kimstu I know and love…You pegged her, Major Feelgud!

Maybe you ought to try learning a bit about someone before you tell them what they are like. Me thinks your crystal ball is broke!

kimstu is suggesting that taxes be raised on people like her in order to fund education for others (since she already has a PhD, I kinda doubt she will have the opportunity to take advantage of it herself), whereas other people in this thread are whining about the tax rates on themselves…And she is the one who you are accusing of being lazy and wanting a handout?!? Boy, you libertarian types are something else!!!

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How’s that foot taste, schmuck?

I may have profound philosophical differences with Kimstu, but never for a moment would I imagine that any of the qualities in the paragraph above describes her. Aside from the fact that I know she works hard in real life in a field that needs hardworking people, the quality of her research and cites her on the SDMB is unrivaled except perhaps by Polycarp and tomndebb. She gives a sizeable amount to charity every year and doesn’t even take the tax deduction because she doesn’t believe in weaseling out of taxes. She wants to pay her share, and then some.

Boy, oh boy. The mind just boggles.

50

jshore and pldennison, that was, like, the best Christmas present ever! Thank you: you guys are the greatest! (sniff, wiping eyes) Happy holidays to all,

Love,
Kimstu

51

First things first: Major Feelgood, our arguments against higher taxes would be helped immensely if so many of those agreeing with us did not display such willful ignorance. In the future, please at least do a cursory search of someone’s past posts before making such an on-it’s-face false accusation. Thank you.

OK. To Kimstu:

OK, this is exactly what I was looking for. An honest person saying exactly how much more I should have to pay for something that I don’t agree with. Thank you for that. That said, please allow me a brief moment to say “EEEEEEK!”

Look at Rasell’s paper again. Maybe I’m wrong here (that weird “share of poverty-level income” thing isn’t the only thing in the paper I don’t understand, and when I’m King of the World[sup]TM[/sup] I’m going to require econ majors to take a few more writing classes.) But here’s what I think I’m reading. First, I’m in the top quintile not the fourth, right? And the top quintile’s effective rate goes from 15.6% to 21% (lower than my rates, presumably because almost all folks in my bracket have mortgage deductions and most have at least some kids, whilst my rent is non-deductible and the judge said the DNA test proves I don’t have any kids :wink: ). So if one figures that my tax rate goes up by 5.4 percentage points, the State would get an extra $10,800 out of me. If instead top-bracket taxes ought to go up by 35% (double EEK!), Rasell proposes to hit me for another $24 grand or so.

And, the money my employer pays for my health care would go up from 1.7 percent of my income to 7%. I have to imagine that at least some of that would come out of my hide at some point, too. (Full disclosure: Next year the money my employer pays will be closer to 2.5%; we had a tough experience year, and our premiums went way up. I’m using the 2.5% figure for comparisons.)

Finally, add in the cost of any supplemental insurance I might choose to buy to eliminate the queuing that inevitably occurs under a single-payer system. (I’m assuming here that you do not propose that the single payer-system be the only way to get healthcare, and that those who choose could buy more/different coverage.)

So the total nut for me and my employer lies somewhere between ~$20,000 and ~$34,000 plus whatever my supplemental insurance costs are (which we can’t predict, since the product does not yet exist)?

Before we go further, am I missing something, or is this about right?

Welcome back, BTW, and I hope you had a nice holiday. Mine, I have to say, went a lot better than I feared.

P.S. If you would like, I can happily explain why both you and Pyrrhonist are both right and both wrong about social security. Alternatively, I can keep to one topic. Your call. :slight_smile:

P.P.S. pl, please don’t call people “schmuck” outside of the Pit. Thanks.

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Kimstu, you totally rock. I didn’t have time over the holidays to read this dauntingly lengthy thread. Reading it in its entirety was like watching a scene out of Gladiator. You are a progressive’s answer to Russell Crowe. (jshore: you also deserve kudos and are a progressive’s answer to, umm, Oliver Reed??)

Pyrrhonist: Although I tend to disagree with your political views, throughout most of this thread you came across as a humane and thinking person. It took me by surprise, therefore, when you likened unfortunate people, unable to pick up the pieces of their lives, to a broken telephone, which you threw in the trash.

Someone as generous as Kimstu might be content to say that you and I have an irreconcilable philosophical difference on this point. I am far less generous and am tempted to say that at this point you demonstrate your limits: that there is something both humanly and intellectually damaged in a person who can glibly liken a human being in need of help to a piece of trash. But rather than attack you, perhaps you’d like to reconsider that statement for yourself. Could it be that rather than a Pyrrhonist you are, rather,a Pyrrhus, determined to deny the human costs of poverty at any price?

On a very different note, here is a link that may be of some interest to you. The author is the economist Lester Thurow. I don’t actually agree with all that Thurow says here: but one point he does make quite convincingly, is that Europe’s superior investment in high-level training and research and development will eventually pay big returns. In other words, Vive la France.
http://www.theatlantic.com/issues/99jun/9906thurow.htm

Major Feelgud, Greetings. The last time I exchanged words with you, you were just about to start reading Emma Goldman, no? ;).

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manhattan: *Look at Rasell’s paper again. […] First, I’m in the top quintile not the fourth, right? *

Ummmm, I don’t think so, although this one rather threw me too. According to Uncle Sam, to get into the top of the five brackets (assuming married-filing-jointly) you need a household income of more than $283,150, and the figure you gave me was less than that. Now I think Rasell is in fact using the same quintiles of households, although she identifies them strangely (for instance, her so-called “average income” for the top quintile is less than Uncle Sam’s cutoff to get into the top bracket!). Otherwise, I simply do not see how she can claim that the tax rate increases she specifies for each quintile represent anything meaningful—unless she’s simply figuring the increase specifically on the amount of the “average income”?

And, the money my employer pays for my health care would go up from 1.7 percent of my income to 7%.

Mmm, I think what she’s recommending is that current employer spending on health care be replaced by a payroll tax on all employers of almost 7% of total payroll. Now, unless your employer is currently spending only 1.7% of total payroll on health care expenses (which sounds like an astonishingly good deal to me!), the current cost of coverage is higher than that figure would suggest. That is, it may cost only 1.7% of your income to give coverage to you, but the same coverage costs 8.5% of the income of your co-worker who makes only one-fifth what you do, and so forth. I’d need to know how much your employer pays for health coverage as a percentage of total payroll before I could tell how badly they’d be hurting under Rasell’s revised scheme. (Off the top of my head, it seems to me that the average employer who now provides health bennies should end up paying less under her scheme, since she’s trying to replace the health-care funding that that subset of employers is currently providing by means of a flat payroll tax on all employers, including those who currently pay nothing.)

*Finally, add in the cost of any supplemental insurance I might choose to buy to eliminate the queuing that inevitably occurs under a single-payer system. (I’m assuming here that you do not propose that the single payer-system be the only way to get healthcare, and that those who choose could buy more/different coverage.) *

Yes, I think that having private supplemental coverage would go far to reconcile many people to the change, and would ease loading on the rarer types of health care providers, as well as being more appropriate for things like cosmetic surgery. But we don’t know how much of such coverage you would actually end up wanting nor how much it would cost.

*Before we go further, am I missing something, or is this about right? *

Well, see what you think of my objections above. I agree that this would be a lot simpler if Rasell’s analysis were clearer, and if we could find a better financing plan to argue about I’d be happy to use that instead.

(As for Social Security, um, maybe we should start a new thread! :slight_smile: But I will happily listen to your comments on my arguments here if you care to give them.)

(And gosh, Mandelstam, thank you!!! “A progressive’s answer to Russell Crowe”?! Wow, I want that in my sig file—hell, I want that on my business cards! :))

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An aside on a national health plan: it may be hard to believe (and would certainly be hard to remember) but there was actually a lot of business support for a national health plan prior to the 1993 debacle. Even the AMA wrote a scorching editorial in JAMA in favor of national health insurance. The logic was precisely that most health-care costs for workers were being borne by a subset of employers, and that it would be fairer to spread the burden to all. Not to mention that a bad experience among a subset of workers in a given period would tend to raise premiums disproportionately for an employer, the argument I heard my employer at the time make, and which is what it sounds like is happening to you, Manhattan.
The same logic applies to Social Security, from an employer’s point of view: those who employ mostly low-salary workers get to pay a full 6.2% of their payroll into SS, whereas those employers with a cadre of high-salary workers pay considerably less of their payroll as a percentage into SS. A thing not often remarked upon, or even remarked upon at all, as far as I can tell.