taxes – R&R – Reachout and Rebuild

US Healthcare: no Bang for the Buck

David Posnett — Sat, 19 May 2018 22:36:07 +0000

Health care in the US is more expensive, by far, than anywhere else on this planet. It represents greater than 17.9% of the US GDP. Health spending is projected to grow 1.0 percentage point faster than Gross Domestic Product (GDP) per year over the 2017-26 period; as a result, the health share of GDP is expected to rise from 17.9 percent in 2016 to 19.7 percent by 2026. Other comparable developed countries pay much less:

The question is why are we so wasteful and what do we get for all this money. If you look at longevity as the overall measure of success for healthcare, we are not doing very well, as described in a recent article in the NY Times:

The above graph shows life expectancy over time compared to similar developed nations.

This shows life expectancy as a function of health spending per person.

So what are the proposed causes for this dramatic inefficiency? The authors propose many factors to explain the sudden up tick in health care spending around 1980. For example:

“suppliers marketed very costly technological innovations with gusto,”and they “found ready customers in hospitals, medical practices and other entities eager to keep up with rivals in the medical arms race.” The last third of the 20th century or so, was a fertile time for expensive health care innovation: Coronary artery bypass grafting, innovative drug treatments for H.I.V. for cancer and expensive NICU care for premature babies.

But innovation does not necessarily translate in to better outcomes. Almost no matter how it’s measured, longevity in the United States has not kept pace with that of other nations.

Another study, published in JAMA, found that even accounting for motor vehicle traffic crashes, firearm-related injuries and drug poisonings, the United States has higher mortality rates than comparably wealthy countries.

So here is the presumed bottom line.

“The lack of universal health coverage and less safety net support for low-income populations could have something to do with it. The most efficient way to improve population health is to focus on those at the bottom,” says Ms Glied from Columbia Univ. “But we don’t do as much for them as other countries.”

The effectiveness of focusing on low-income populations is evident from large expansions of public health insurance for pregnant women and children in the 1980s. There were large reductions in child mortality associated with these expansions. “Those reductions were much larger for poor children than for richer children,” Ms. Currie said.

In 1980 the United States spent 11 percent of its G.D.P. on social programs, excluding health care, while members of the European Union spent an average of about 15 percent. In 2011 the gap had widened to 16 percent versus 22 percent.

Slow income growth could play a role because poorer health is associated with lower incomes. “It’s notable that, apart from the richest Americans, income growth stagnated starting in the late 1970s,” Cutler said. “Social underfunding probably has more long-term implications than underinvestment in medical care.”

Read more here about how social programs can lead to increased longevity: Are better health outcomes related to social expenditure?

It has been known for some time that low income/wealth is associated with much decreased longevity:

as the income gap increases in the US, so does the disparity in life spans between rich and poor as reported in the NY Times
in the U.S., the richest 1 percent of men lives 14.6 years longer on average than the poorest 1 percent of men, while among women in those wealth percentiles, the difference is 10.1 years on average.
This eye-opening gap is also growing rapidly: Over roughly the last 15 years, life expectancy increased by 2.34 years for men and 2.91 years for women who are among the top 5 percent of income earners in America, but by just 0.32 and 0.04 years for men and women in the bottom 5 percent of the income tables.
U.S. tax and spending policy does relatively little, compared with its peers in the developed world, to reduce inequality and with the new tax policies enacted by our current government this will worsen.

In the NY Times (2014) Leonhardt and Quealy note that “The American Middle Class Is No Longer the World’s Richest”. The following interactive graph shows who many developped countries like Norway, Canada, Germany, Sweden, Netherlands are making gains for the lower 20th percentile of wage earners surpassing American incomes for this bracket. American incomes are losing their edge, except at the top:

It is this same bracket (the lower 20th percentile) that have such poor life expectancy dragging down the overall life expectancy for the entire country.

Finally, this study shows an interesting shift: since about 2004 the lowest quintile income group in the US is spending much less on healthcare on a per capita basis, than the highest income quintile. One of the authors remarks that “co-payments and deductibles have bent the cost curve. But it’s come at the expense of poor people and middle-income people.”

My conclusions:

efforts by the GOP to slash medicare will make things worse
the new tax law will make things worse by aggravating income disparity
advances in medicine benefit the health care industry and affluent Americans who have access to the newest treatments, but on average the population does not benefit as measured by life expectancy, for example.
How you vote may be a matter of life or death.

Jobs? Where are they?

David Posnett — Wed, 02 May 2018 18:08:43 +0000

From: John Tepper Marlin, Ph.D., President, Boissevain Books LLC, Principal, CityEconomist
WHERE ARE THOSE GREAT NEW JOBS FOR LONG ISLAND THAT TRUMP AND ZELDIN PROMISED

These figures were released this morning by the Bureau of Labor Statistics. They are for Nassau and Suffolk Counties. March 2018 compared with March 2017 (the numbers are not seasonally adjusted, so you have to use year-over-year monthly comparisons).

Unemployment	4.2%	4.6%	Up .4 of a percentage point
Payroll Jobs	1,482,557	1,464,134	Down 18,423

YOU CAN BE SURE IF THE NUMBERS WERE GOOD, ZELDIN WOULD BE TRUMPETING THEM. BUT THEY ARE NOT GOOD.

NEWSDAY:

Long Island’s unemployment rate rose to 5.1 percent in February, from 4.8 percent in February 2017, state data released Tuesday show. It was the fifth consecutive year-over-year increase since October.

The rate rose in 10 months of 2017 and has been steadily moving away from what is considered full employment, which is 4 percent or below.

The number of employed residents fell by 9,500 last month, compared with a year earlier, to 1.39 million, the lowest for the month since 2015. The number of unemployed Long Islanders rose by 3,300 to 74,300, the Labor Department said. That was the highest for the month since 2015.

Southampton has the worst jobless rates for the entire island!

Trickle down economics = voodoo economics = fool me once, fool me twice…

Tax Cuts for Oligarchs

David Posnett — Fri, 29 Sep 2017 20:50:20 +0000

Letter to the East Hampton Star published Sep. 28, 2017

There is so much in the news today about oligarchs. Do most readers know who or what they are?

“Siri,” I asked into my iPhone, “what is the definition of oligarch?” Up popped the following screen:

1. a ruler in an oligarchy, and

2. (especially in Russia) a very rich businessman with a great deal of political influence.

Here in the U.S.A. we have our own oligarchs, such as the infamous Texas Koch brothers. And our oligarchs are not just businessmen, as the definition says, but women as well. Take Rebecca Mercer, who, with her extended Mercer family, contributes heavily to politicians, including our own congressman, Lee Zeldin.

How does it work here? To stay in their jobs, politicians have to spend an inordinate amount of time raising money — that’s our system. And what do these oligarchs get out of this; how do they rule? Well, for one, they get huge tax breaks.

I had to laugh when I got an email from Mr. Zeldin the other day, asking if I was in favor of tax reform. Who isn’t, but what kind? Giving tax breaks to the Mercers and their kind is not what I consider reform.

Has Mr. Zeldin been hoodwinked, or are we being hoodwinked? We need to pay taxes; the government can’t run on wind. And the rich should pay their fair share — period. The goodies that are supposed to trickle down from rich people’s tax savings are such a small trickle, if at all, that “trickle down” is a joke, a joke played on us.

I say no tax cuts for the rich, Mr. Zeldin; they are doing just fine. If you don’t believe me, ask Siri.

PEGGY BACKMAN

Comment1 (D Posnett):

During the presidential campaign last year, we learned about Hillary Clinton’s income. Her $10,594,529 adjusted gross income (AGI) puts her in the top 1% of earners. Altogether, the top-earning 1% of taxpayers reported 20.6% of all AGI and paid 39.5% of total income taxes. Since President Trump never released his tax returns we dont know where he fits in. You can find out where you stack up on this site:

http://www.kiplinger.com/article/taxes/T056-C000-S001-where-you-rank-as-a-taxpayer.html

Comment2 (D Posnett):

Looking at overall wealth inequality is even more striking:

top 0.1% worth as much as the bottom 90%.

Not since the Great Depression has wealth inequality in the US been so acute. And the trend is growing! Unbelievable.

Welcoming refugees brings unexpected economic benefits

David Posnett — Wed, 20 Sep 2017 14:13:38 +0000

The Trump Administration continues to govern with a blind eye toward inconvenient facts and analyses.

Stephen Miller, Trump’s top white nationalist advisor in the White House, reportedly rejected a study proving refugees contribute significantly more to U.S. revenue than they cost. From The New York Times:

Trump administration officials, under pressure from the White House to provide a rationale for reducing the number of refugees allowed into the United States next year, rejected a study by the Department of Health and Human Services that found that refugees brought in $63 billion more in government revenues over the past decade than they cost.

The draft report, which was obtained by The New York Times, contradicts a central argument made by advocates of deep cuts in refugee totals as President Trump faces an Oct. 1 deadline to decide on an allowable number. The issue has sparked intense debate within his administration as opponents of the program, led by Mr. Trump’s chief policy adviser, Stephen Miller, assert that continuing to welcome refugees is too costly and raises concerns about terrorism.

The leaked study showed refugees hugely contribute to the U.S. economy:

The internal study, which was completed in late July but never publicly released, found that refugees “contributed an estimated $269.1 billion in revenues to all levels of government” between 2005 and 2014 through the payment of federal, state and local taxes. “Overall, this report estimated that the net fiscal impact of refugees was positive over the 10-year period, at $63 billion.”

The NYT reports it’s not clear who rejected the report, but it has Stephen Miller’s xenophobic, anti-immigrant, white nationalist fingerprints all over it:

It was not clear who in the administration decided to keep the information out of the final report. An internal email, dated Sept. 5 and sent among officials from government agencies involved in refugee issues, said that “senior leadership is questioning the assumptions used to produce the report.” A separate email said that Mr. Miller had requested a meeting to discuss the report. The Times was shown the emails on condition that the sender not be identified. Mr. Miller personally intervened in the discussions on the refugee cap to ensure that only the costs — not any fiscal benefit — of the program were considered, according to two people familiar with the talks.

Earlier this year, The Business Insider published data supporting the rejected administration report. A new working paper from the National Bureau of Economic Research shows refugees provide a net contribution to the economy through the taxes they pay over time, countering the notion that they are a drag on the economy due to a reliance on social benefits.

The report from Notre Dame economists William Evans and Daniel Fitzgerald finds that “over their first 20 years in the United States, refugees who arrived as adults aged 18-45 contributed more in taxes than they received in relocation benefits and other public assistance.” The Notre Dame study drew on State Department data to create a sample of 20,000 refugees who entered the country between 1990 and 2014.

The authors also find that “the younger the refugees were when they resettled in America, the more likely they were to catch up with their native-born peers educationally and economically.”

This chart captures their findings, showing that refugees on average cross the threshold from net beneficiaries to net contributors around the 9th year after migration.

NBER

The research also found that refugees who arrived before the age of 14 had, by ages 19-24, graduated from high school at the same rates as American youth. By ages 23-28, those refugees displayed the same college graduation rates as the US-born population.

“Refugees who arrived as children of any age have much higher school enrollment rates than U.S.-born respondents of the same age,” the research finds.

The US spends an average of $15,148 in relocation costs and $92,217 in social benefits over an adult refugee’s first 20 years here, the NBER said, citing the Notre Dame report. Over that period, the average adult refugee pays $128,689 in taxes — $21,324 more than the benefits received.