Fiscal Commission Co-Chair recommendations

[Arrian]

Hmm. I'm not sure I think zero cap gains tax is good public policy, but I see the logic. Thanks.

I'd like this plan to have more defense cuts in it. I also think they've got some magical thinking going on re: healthcare spending.

-Arrian

[Arrian]

Imran,

The rate cuts are only part of the story. It also takes an axe to various tax deductions.

-Arrian

[Arrian]

Question:

In a 0% cap gains tax environment, could a CEO (or any executive) receive stock grants as their compensation (salary $1 like Jobs) and thereby avoid income taxation entirely?

-Arrian

[KrazyHorse]

No, they should be taxed as regular income at their market price on granting, due at granting (or their mkt price at sale, due at sale)

[KrazyHorse]

BTW I am against cap gains treatment for carried interest

[Arrian]

No, they should be taxed as regular income at their market price on granting, due at granting (or their mkt price at sale, due at sale)

[Sava]

The best way to cut health care costs while improving quality of care is to eliminate the private health insurance industry. I don't understand why we need to pretend like this is a difficult equation or proposition. Perhaps ideology has confused some individuals.

Health care is both an industrial and care-driven system.

Profit disrupts efficiency of an industrial system by funneling revenue into a pyramid wage structure. Administrative costs are needlessly higher each respective level of management. The skill required of strategic planners at top management positions does not require excessive labor costs. This represents the greatest amount of waste in the private insurance industry.

Underwriting, sales, marketing and billing departments also represent large amounts of waste in labor costs in private systems. A single, public system does not have such costs associated with it's operations. I would also suspect legal costs would be lower since the public system does not need to hire lobbyists to argue for tort reform on its behalf.

One doesn't need to be an accountant to see that a public system is more efficient than a private system. It only benefits private health insurance companies to allow a private insurance health care system. They are designed to generate money for themselves at the expense of the consumers. Any partnership between the public or an individual consumer is in their interest.

Any fiscal conservative who is an advocate of saving taxpayer money should be an advocate of a single public health care system, devoid of any partnership with private insurance companies. Anyone who claims to be a fiscal conservative but does not support such a system is merely using the rhetoric to gain support among a certain constituency which such a message would resonate. Regardless of whether or not the government pays for health care, a private system would still represent an inefficiency in the market economy and a drain in consumer's budgets. Other industries suffer from lack of investment due to waste in labor costs that are spent in the private insurance industry. Money that consumers could spend, save or invest in other sectors is currently reserved in administrative costs that do little else but maintain it's own existence and decrease both the overall and individual quality of patient care.

Being inefficient as an industrial system should itself be reason enough to dismantle the private insurance system. But because health insurance is a care-drive system, it is important to discuss how the system is extremely inefficient in this function. The excessive wage costs of the private system make the quality of patient care inherently worse just by using more resources which could otherwise be devoted to what should be the primary purpose of health care. But the business practices of private health insurance companies reveal a much more sinister set of policies.

The idea of an efficiently run profitable system would make a purpose-built model obvious to any enterprising strategic business manager. To take in as much revenue as possible, you must keep policy holders that cost as little as possible and drop policy holders that represent the highest expense. When normally "efficient" policy holders require claims be paid to cover their expenses, delay payments, reduce payments, or set up structures that make claims difficult to process.

The models that maximize profit direct correlate to lower quality patient care.

There is no efficient private system. There is no private system that provides high quality patient care. No private system will lower our costs.

Private health insurance is the problem. A single public health insurance is the solution.

In our political system, you have to be more motivated, angrier and louder. Don't be shy. Don't be afraid. Yes, it helps to be right, but it doesn't matter. Shout down the opposition. Everyone who argues that there should be a private system is wrong. I don't care why they say what they do. I don't care if they are a lobbyist, a wall street exec, a misguided right wing forum troll, or a simple minded middle aged conservative who grew up believing competition is good because he saw Ronald Reagan say so in the 50's. Everyone needs to get it through their heads that they are wrong.

[Arrian]

Any fiscal conservative who is an advocate of saving taxpayer money should be an advocate of a single public health care system

Rationing! DEATH PANELS!



-Arrian

[Kuciwalker]

Getting rid of the mortgage and health insurance deductions would be so beautiful.

[Jon Miller]

Getting rid of the health insurance deduction would probably be the single best thing that could be done for US health care.

JM

[KrazyHorse]

Getting rid of the mortgage and health insurance deductions would be so beautiful.

Yeah, I get a stiffy for those too

[KrazyHorse]

This is a far better argument against the capital gains tax than anything I have heard on apolyton:

http://www.manhattan-institute.org/html/research_memorandum_7.htm

JM

The fact that you think so demonstrates how much you need to learn. The best arguments against capital gains are, in order:

1) It distorts at the savings/spending frontier unnecesarily; if you want to levy taxes on the rich, then levy them on the rich: those whose lifetime consumption is higher than others

2) Even inframarginally to the savings/spending frontier, it distorts work incentives more for savers than spenders; a fundamental principle of efficient taxation tells you that differential taxation between two groups is more distortionary than a uniform rate (the deadweight loss is approximately proportional to the square of the tax rate)

3) Taxes don't stay where you put them, and there is good reason to believe that in a world where capital is the most mobile, capital gains taxes fall on everybody other than the holders of capital

4) It distorts between various capital structures (e.g. dividends and interest-bearing instruments are the worst possible way of investing taxable money)

5) Nonsense arguments (like the one you posted)

[Darius871]

Getting rid of the mortgage and health insurance deductions would be so beautiful.

Yeah, I get a stiffy for those too

Just OOC, why stop there? What deductions or credits in your view (either of you) aren't mere social engineering disguised as tax policy?

[KrazyHorse]

The issue actually gets a bit more fuzzy when you start talking about child tax credits/deductions (there is a new person involved at the relevant frontier, and you need to make decisions about the effect on welfare of creating a new human being)

Certain other tax expenditures at least improve equality significantly (earned income tax credit), whereas the health insurance and home interest deductions benefit the relatively rich disproportionately.

[DriXnaK]

Why is it good to get rid of the mortgage deductions and insurance deductions? I'm actually asking a serious question. Economics doesn't really interest me too much but I'm curious why you guys think this is a good thing.