The Downside of Obama Care

This is Marty Feldstein in yesterday's Washington Post:

Experience shows that raising the top income-tax rate from 35 percent today to more than 45 percent – the effect of adding the proposed health surcharge to the increase resulting from letting the Bush tax cuts expire for high-income taxpayers – would change the behavior of high-income individuals in ways that would shrink their taxable incomes and therefore produce less revenue. The result would be larger deficits and higher taxes on the middle class.

The White House Council of Economic Advisers claims that the government can cut the projected level of health spending by 15 percent over the next decade and by 30 percent over the next 20 years…We are told that this can be done without lowering the quality of care or diminishing our health. I don't believe it.

Comments (5)

Trackback URL | Comments RSS Feed

  1. Joe S. says:

    Bottom line: We pay more and get less.

  2. Ken says:

    Washington always overestimates the revenue from raising tax rates on the rich. The reason: high-income people have enormous discretion over how they receive their income and when they receive their income.

  3. Larry C. says:

    Gary Becker and then Martin Feldstein. Great thoughts at your blog today, John.

  4. Greg says:

    Problem is: Democrats in Congress don’t believe in incentives.

  5. Brian says:

    Problem is that with the present system we DO pay more and get less. In fact continuing the status quo will only insure that you will beg for today’s prices beacuse insurance will go up another 2-3 hundred percent while more people are dropped, coverage is less, and your choices are dictated to you by insurance.

    Cost CAN be lowered without hurting advances. The fact remains that 90-95% of ALL R&D in healthcare is paid for already, (by taxpayers in the form of grants), and that the cost to buisness is extremely low. You aren’t paying for R&D in your premiums or medicine costs beacuse buisness has no costs in this area, what you ARE paying for is the next luxury yacht for executives or a European vacation while you struggle to make ends meet and get quality healthcare.

    Cost will NEVER go down as long as insurance is holding the purse-strings and calculator. Until someone steps in and forces insurance to hold up their end of the buisness contract, (insurance IS a contract), and sets pricing guidelines, cost will never decline. Why should it? There is no incentive to lower costs for insurance. They won’t gop out of buisness because they hold a VITAL service which is required for a long and healthy-life.

    Today you can live without a tv or cell phone, video games or even transportation BUT you cannot live without healthcare. Insurance groups know this and that is why they raise prices regardless of the lowering of actual costs. They routinely pass costs to the consumer and keep the savings to themselves. Premiums have NEVER gone down, only up. EVEN when their cost of buisness went down they didn’t pass savings or increase coverage. They reduced coverage and raised rates in order to raise their profits. (450% profits).