Monday, October 28, 2019

Trump's economists will be missed

When the day comes (year 2029?) that a "progressive" Democrat occupies the White House, we can look with nostalgia on the good old days 2017ff when White House economists literally followed the textbook.

Surely the economists working for that new President will be no smarter than UC Berkeley's Emmanuel Saez.  In his primary defense of Medicare for All, Mr. Saez now writes that payments to private health insurance are "just like taxes."

Saez understands that those brainwashed by old school economics will be thinking "health insurance premiums [cannot be] a tax [because] people have some choice."  Their mistake, he says, is that unlike "spending on food and clothes," premiums for employer HI are "mandatory." (The equivalence of premium and tax is also a central premise of their new book, especially Chapter 5).

Mr. Saez is showing his ignorance about American law, and that he is too lazy to take even a cursory look at the data.

Regarding the law, no one is required to purchase health insurance.  Yes the Affordable Care Act requires either purchasing or paying a penalty, but the PENALTY IS ZERO and furthermore there are many loopholes built into the law.

As an empirical matter, more than half of American workers are NOT having health insurance taken out of their paycheck.  Even the Saez article admits that cash wages are higher compared to having HI taken taking out.  So those workers who pay health insurance through their paycheck have chosen not to have one of those tens of millions of jobs with higher cash pay but no health benefit.

Let's put this another way: Would Candidate Warren promise that American workers can have the same alternatives to paying payroll and income taxes that they currently have for having HI premiums taken out of their paychecks?  I didn't think so.

[There are many other problems with Saez' assertion, e.g., how a payroll tax as compared with HI premiums would vary with employment, income, hours, etc., but the above is enough to show how he is wrong on his own terms.]

Friday, October 25, 2019

Tragic consequences of cheap "meth": more meth consumption and more meth overdoses

The illegal drug meth has been getting a lot cheaper, due to technological "progress" in manufacturing.  I have been telling people this for a while and that the tragic consequence will be more overdoses, but most people are under the (false) impression that drug overdose reflect only deaths of despair rather than a movement along a stable meth-demand curve as a result of increased supply.

Now the evidence of additional meth-involved overdoses is coming in.

See also the 2019 CEA report on the role of prices in drug overdoses.

A Wealth of Reading about Wealth Taxes

courtesy of Torksten Slok.  See also Chapter 18 of Chicago Price Theory.

Wealth Taxation and Wealth Accumulation: Theory and Evidence from Denmark

Behavioral Responses to Wealth Taxes: Evidence from Sweden

Make your own Tax plan

How would a progressive wealth tax work? Evidence from the economics literature

Global Wealth Inequality

Progressive wealth taxation

Estimating the economic impact of a wealth tax

The Top 1 Percent in International and Historical Perspective

Should the Rich Be Taxed More? The Fiscal Inequality Coefficient

Ending Special Tax Treatment for the Very Wealthy

Wealth taxation: An introduction to net worth taxes and how one might work in the United States

Use It Or Lose It: Efficiency Gains from Wealth Taxation

Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality

U.S. Taxes are Progressive: Comment on “Progressive Wealth Taxation”

Distributional effects of public law

Wealth inequality in the United States since 1913: evidence from capitalized income tax data

The missing profits of Nations

Can Wealth Taxation Work in Developing Countries? Quasi-Experimental Evidence from Colombia

Tax Evasion and Inequality

Top Wealth in the United States: New Estimates and Implications for Taxing the Rich

The Other America: Inequality, Taxes, and the Very Rich

IMF: Tackling Tax Havens

Taxing Wealth and Capital Income

Rethinking capital and wealth taxation

The Elephant Curve of Global Inequality and Growth

Global inequality dynamics: new findings from

Exploding wealth inequality in the United States

Capital accumulation, private property and rising inequality

The evolution of wealth inequality over half a century: The role of taxes, transfers and technology

The Research Agenda Post-“Capital in the 21st Century”

Shifting tax burden to top income earners: what is the best way to reduce inequality?

Why Market Imperatives Invigorate Economic Inequality? Cobb-Douglas Utility Remodelled

Improving the Measure of the Distribution of Personal Income