But even that doesn't include the real sting on the tail of US medicine. You pay a fairly high health insurance premium, but if you actually need health services you then pay again through the nose even with insurance "discounts."
For example my under one year old needed to go to the emergency room due to a high fever for several hours, we paid over $300 on top of paying over a thousand in combined employer/employee premiums each month. That's with insurance picking up at least that much.
If you need emergency care then sure, there isn't time. The vast majority of interactions with the medical system aren't that type of emergency though. People have time to choose the better of two options. They can't decide on better if they don't know the price.
In many developing nations insurance is the exception, rather than the rule. This changes two big things. The first is that you're expected to pay for things that would have more than a negligible cost before these procedures are done. If you don't like the cost - you go somewhere else. Emergency care, like the US, is an exception - and nobody can be turned away, so you are billed afterwards.
But the really big thing this changes is that costs are such that people can actually pay them. For instance in one procedure I had a consultation, x-ray, and medicine. Total cost was about $20, and that's not government subsidized in any way - the hospital is making profit on that cost. And this is not a "hospital" with "doctors". Most of the medical staff are educated in the west and then come back home to work afterwards. As an aside, it also means they generally have great English. It's why developing nations are increasingly a destination for medical care - 'medical tourism'.
For those insured, it depended on the insurance you had but they would give you a rough estimate based on the plan you had (mostly because they can’t be 100% certain what the insurance will cover down to the exact dollar amount.
In my experience the estimate is often off but close enough that I am not worried I’d owe an insane amount afterwards.
I have no illusions, a person without a degree in accounting probably won't be able to decipher these prices, but that could be a step in a proper direction.
IMHO, it is because folks are overly deferential to medical doctors.
While a lot of the problems are actually caused by the insurance industry (a constantly changing billing code system) rather than the doctors themselves, I think folks are growing tired of being yanked around by the system.
This deference is decreasing based on my limited experience (i.e., just talking to people about their medical experiences), and it may drop precipitously soon. My guess is that most/all of the good doctors going to "concierge" will be the breaking point.
Because the American medical system is perhaps the finest example in the world of regulatory capture, ironically masquerading as an example of pure capitalism, while decrying the "socialism" in other countries.
This is not a probleam of health-care as much as it is of insurnace. If you paid doctors cash you will get straight up pricing.
Thing is the market is like 95% insurance.
I believe this will change in the near future. High-deductible plans and DPC's will bring back some sane price sensitivty into the system. But while patients with great PPO plans pay 20 bucks for a 300 dollar visit, its not going to get fixed itself by "posting prices somewhere"
But the mere fact that you can go get a surgery, and not only will you not know what it will cost, you don't even know who you're doing business with: you're going to get bills from the doctor, from the hospitals, from the nurses, from the anesthetist, and god know what else from, for the next 6 months. You don't even know if you're done paying all your bills or not!
Its completely absurd.
Just like when you buy food! Or heating! Or water!
When the process is voodoo for the people who actually deal with insurance payments, normal people stand zero chance because it's unlikely you'll ever find a person to talk to who can find this information out.
The dental industry works the same as the medical, I have a half-useless insurance that covers too little, and out-of-pocket expenses are always higher than you expect. But if they can do estimates before a procedure, why the hell can't the medical industry do the same?
I recently learned that there are 2 different codes involved and that it's the combination that matters.
1. The diagnostic code - the reason why you need that test
2. The procedure code - what the test is
My insurance tells me that their coverage (as in whether they cover a service or do not) is different for the same procedure code with a different diagnostic code. I'm not sure if that implies that their coverage price for the same procedure code also varies by the diagnostic code.
Your doctor can give you both codes for the test they're prescribing. In theory, your insurance company can tell you what they'll pay for the combination, and then you can contact each lab / hospital / service provider to get an estimate for what they'd bill. It's unclear how much recourse you have if the bill turns out to be significantly different than the estimate… that is once the bill actually arrives, sometimes 30–60 days later. I'm not sure if the service provider's bill varies for the same procedure code with a different diagnostic code.
Admittedly this is all a huge pain and with my insurance company at least, cannot be done online, you must call and wait. It's all such a time sink that I usually just get the service done upfront and hope. Sometimes the end consumer cost is practically free, sometimes it's hundreds of dollars or more.
It should be more feasible for us to know a rough estimate for a procedure across providers upfront.
- taking a kid to the ER costs nothing
- taking a kid to a GP or a pediatrician costs nothing
- staying a night at the hospital costs around 15€
- getting a prescription from the pharmacy costs 5€
Personally, I avoid the very high deductible plans, mostly because I have the option, but also because I don't want to deal with hospital billing. I've got an HMO (kaiser) and they charge me almost nothing at point of service, and I get to consume all the medical care my doctor thinks I need.
Unfortunately, my employer has a really juicy high deductible plan that a lot of my co-workers use. Like they actually give you money to put in your HSA that covers most of your high deductible. It's a good plan. But I don't like it because it means my co-workers get to keep extra money for not going to the doctor when they are sick, and instead they come into the open plan office and cough all over the place.
I mean, I do okay, and I'd be happy to kick in a little extra money if it meant my co-workers were more likely to go to the doctor when they are sick rather than sharing the love with the office.
When you are sick, don't go to work. If there is any question of if the doctor can help, talk to the doctor. (Via phone or video chat, if necessary)
The US is much cheaper for all health insurances, except if your poor. Obama tried to fix that, but made it worse and more expensive for everyone (socialism).
If you're "poor", insurance is actually cheap, because that's when you get public insurance. However, if you're just middle income, health care is a non-trivial portion of your income. One major health incident will bankrupt you and you're likely to become poor. But once you're poor, hey, you can get cheap health insurance.
The critical problem is that obtaining reasonable health insurance requires you to be employed full time at a large company. This must stop. Obamacare was a first step toward cutting the employer out of the picture.
When I became a salaried employee in the Bay area I went to an urgent care recommended by Cigna and my allergy problems were resolved inside of 15 minutes with a $20 copay.
Obamacare is anything but cheap when you are poor.
As far as cost controls/etc, set by something like a dutch auction within a given metro area, and then some bean counter will get to figure out if it's cost effective to ship people that are outside of metro areas in to them to provide non-urgent care.
I would love to pay $400 a month for health care for my entire family all inclusive in the US! Can you please state the name of your insurance company and your specific policy so I can get this too? My rate is over $20,000 a year right now so that would be a tremendous savings. Thank you so much!
My health alone is $2,100/month for a family of four. I suspect your employer is paying a large portion of your premiums as a benefit.
This is quite common in the US, and a significant portion of the problem, as people think they're getting great insurance "cheap". They're not - it's just being paid in a way that's not visible. As a result, any discussion of "it'd be cheap to implement national healthcare, it'd only cost $X" is met with "but I pay peanuts for mine now!"
In my case I do know. My employer pays $930 some a month. My rent used to be $860/month.
The other thing the happens is just because you have insurance doesn't mean that healthcare providers aren't trying to jack more money out of you. Any procedure/service will be up coded to increase your out of pocket share.
Did my taxes and my family of four was well past the $30k mark for insurance, copays, dental, and optical this year.
Not only do employers pay for a portion of employee healthcare costs, they also get better coverage for less.
Why should I trust your figures over the article? Are you including the "employer contribution" toward your taxes and health care premiums?
I imagine you can still pay $1000+ out of pocket to have a baby in a US hospital, even if you have great insurance.
Also, the article talks "average", while I imagine US health costs are highly variable depending on whether you are young, old, smoker, non-smoker, fat, skinny, pre-existing conditions, etc...
Some people pay $1500 per month in health care. And some, $400.
I just got that bill, in fact, and we have about the lowest deductible insurance you can buy, at a cost of about $1500/month. It was still $6500.
> In Denmark, only health is covered, so for eye and dental many go out-of-country to get it cheap.
That kinda sucks for Denmark. In Austria, everything is included in the 7.5% that health insurance costs.
Health insurance typically only covers the minimum at the dentist, and almost nothing of what is considered "cosmetic" or would be good in the long-run (e.g. oral hygiene, braces).
It gets expensive quite fast.
Depends on if the individual's state accepted Medicaid expansion funds from the federal government (states like Texas and Florida haven't) and whether the individual makes less than ~$16.5k/yr.
I wouldn't call either $0k/yr in North Carolina, or $17k/yr in New York, lower middle class. Neither of those incomes in those places would give an individual access to Medicaid.
Good luck finding a Medicaid provider.
Or that socialism is a bad thing?
correction - wow! the first ever audit has finally happened https://www.defensenews.com/pentagon/2018/11/15/heres-what-t... :
"But department officials were quick to note that was no expectation that the audit would be clean, given the size and scope of the project."
Next up: Venezuela.
Yes, it's not Ivy League, but it does the job.
EDIT: There is also the case where you may live in a state with insufficient opportunities for higher education. For example, neither of North Dakota's two public research universities (U of ND, ND State) rank inside the US News top 200, and both of those schools will still charge you around $20,000 per year. Germans or Brits will be able to receive subsidized educations at any university in their countries.
You'd probably have access to a better education at U of M in Minneapolis. But it's going to be quite a bit more expensive and I'm not sure it would have that large effect on your career.
I didn’t have the grades, legacy or extracurricular activities to get into the Ivy League. I could get into good engineering schools, but couldn’t imagine the debt or bankrupting my parents. So I went to a SUNY school, and everything worked out fine.
Doh! Just checked the cost of undergrad in some of those nations.
I guess if I were a German or French guy, I'd likely find tuition levels in the US a bit outrageous.
This is very much aligned with the direct cost and services provided. Attending German universities is virtually free, and under certain conditions, the country will give you very cheap loans to pay for your living expenses. My spouse had a single digit number of thousands of Euros to pay back after graduating.
PhD students are often underpaid employees and are treated that way (for better or worse) instead of being considered as and treated like students. This doesn't imply one is preferable to another, just that it is a continuation of treating them with and expecting a higher degree of maturity and independence.
An upshot for me was that when I applied to my first industry job, the time as a PhD student was treated as work experience.
So yeah, I think you're spot on in that many folks from continental Europe would find the amenities bewildering. :)
If you miss it the first round then there is a massive incentive to transfer or find an easier program, otherwise you face the prospect of being forced to go abroad to complete a degree.
I'm not sure if they account for inflation or have any fixed interest on the loans. 30 years without any would be pretty crazy.
It's basically inflation + 3% if you're earning more than £45k/yr+.
For example, tuition fees at Scottish universities are "free" (i.e. paid for by the Scottish Government) for Scottish residents and people from other EU countries (but not the rest of the UK).
I forgot the fees on top of our insurance in the US (it being >16 years ago) but it was pretty steep.
After moving to the US I have earned more money in 10 years then I could have earned in my entire life in Canada. My medical is outstanding and my taxes in TX are a pittance.
It seems where you live in the US might make a difference.
That's mostly not true if you have an HMO plan, but your employer may not offer HMO plans if it offers insurance, the HMO may not be a good one if it is available, or it may not cover good providers in your area.
I think you meant that tongue in cheek, but essentially that means it's true for a significant number of people whose circumstances meet any of those criteria.
The problem, as always, is what do you do with all the redundant bullshit jobs that are eliminated in the process.
 “after premiums” is roughly the same as “after taxes”, right?
In the US, I've already payed thousands in after-premium medical expenses for my very healthy young children, just in copays and ER visit fees for normal accidents that kids get into, and that after having what in the US is considered amazing health insurance, so I'm a very lucky person.
I had to go to the ER in the UK as a tourist recently. They refused to take payment since I wasn't admitted to the hospital.
>  “after premiums” is roughly the same as “after taxes”, right?
For the purposes of comparison between the US and other OECD countries, yes.
My wife and I have never paid four figures for a doctor visit, despite having two surgeries (one oral), a calf strain, and a dislocated shoulder (with ER visit) between us. The state of medical care in the US is bad enough as it is; you don't need to make up hyperbolic bullshit to make it seem worse.
My son had a laceration glued together (dermabond in lieu of one or two stitches) and that was either close to or slightly over four digits after totaling the hospital bill and doctor bill, both in network.
I'm fine with paying a premium for trained professionals, I'm fine with paying doctors a high wage. $120 is crazy for a doctor who already has an opening in their schedule taking less than 10 minutes to glance at a wound and slap some steri-strips on it.
> Maybe consider that your experience is the exceptional, not the people you call hyperbolic.
I'm not saying I'm typical. I'm saying that four-figure Mexican bills aren't. If they were, then I'm an extreme outlier, which I don't accept.
This is stupid. There is no real way to shop and bring down health insurance costs in the US. It's tied to your job, meaning you would need to get many job offers, and turn them down when you find out the actual insurance costs until you find one that's better, and ignoring other employment factors.
And then everything can change the next time open enrollment comes around. Don't like the deductible, time to start the job search again! Oh, and the deductibles are probably about the same at all the other companies, anyway.
It's just a stupid system from top to bottom, locked into place because our political representatives are completely uninterested in governing.
I agree it is a stupid system though and I'll tell you why: People want something for nothing. They want coverage for everyone, they don't want a tax, but they don't want compulsion to purchase and they also want to force insurers to take people with pre-existing conditions. Insurance can't work that way, the money has to come from somewhere.
If there was a compulsion to purchase, the system could work, as it does in many other countries. That's probably unconstitutional though, so it probably wouldn't stand.
Lastly you have "Medicare for all" which would basically bankrupt hospitals if you extrapolate from what current Medicare does to them financially.
You honestly can't blame representatives for dealing with voters that understand nothing and want everything. They voted for Obamacare, then they voted for Trump to make Obamacare even worse. I don't even want to know what's next...
"If there was a compulsion to purchase, the system could work, as it does in many other countries."
Wasn't that one of the major points of Obamacare, to make strides in that direction? And it did pass Supreme Court scrutiny, who decided yes it is a tax, and yes the government is allowed to tax us.
"Lastly you have "Medicare for all" which would basically bankrupt hospitals if you extrapolate from what current Medicare does to them financially."
Across our economy, competition and technology drive higher quality at lower cost. Doctors and hospitals need to have an incentive structure that rewards keeping the most people healthy at the lowest cost. "Capitation" models are meant to provide these incentives, where you don't get paid for "doing things" to patients, like ordering tests or performing surgeries. You get paid a fixed sum per patient to keep them healthy, adjusted for the "risk" associated with the patient (for example, if they have a chronic condition that needs ongoing treatment).
So an intelligent "Medicare for All" system could be designed to incentivize innovation and cost cutting and overall patient health, if implemented intelligently.
Thanks. Very stylish.
It's also about what we paid for my wife's shoulder. Which, like I said, is bad enough on its own.
On the top of that, he didn't charge you for what it was, but for what it wasn't and confirming it.
Take for instance if that muscle spasm actually lead to something darn serious, the doctor ruled that out, that's why he sent you back after 10 mins. For some weird reason (or counter-intuitive economic reasoning which everyone has got), if you had a serious problem, and the doctor had identified it in that 10 mins, then you'd be ok with that billing.
See it this way, if you're tech security contractor and the CEO calls you urgently to come take a look at suspicious behavior on his computer which he thinks might be a hacker hacking his computer, but it turns out to be a quite known windows bug, that doesn't mean you shouldn't charge him your regular fee if it was an actual hacking attempt. You're getting paid for being on call.
Your mileage will vary depending on the bill collector, hospital system, staff etc., but keep in mind someone has to be paying the bills. American, work in tech, post on Hackernews? It’s probably going to be you.
Always worth a shot though. Worst case they’ll usually let you go on a 0% APR payment plan for years and years.
When I did ask, their response was basically a more nicely worded version of that.
Just because there wasn't anything wrong doesn't mean you don't have to pay a person for their services.
How much does an ER visit like that cost in a sane country? I mean the actual cost, not the “free” that the patient might see from a socialized system. It’s nowhere near that high.
I guess I shouldn’t have gotten injured on a federal holiday.
We have a friend whose hospital tried to charge them $15k for a delivery room they never used - never used because the doctors forgot about them and she delivered her own baby in the hallway. Talk about two major fuckups in a row.
With insurance we paid $800 for her to lay in the Er for 3 hours.
When I had back surgery I was with a public employer PPO. Total out of pocket was like $300 for about $500k of procedures. Half the people in my recovery PT were selling cars and emptying 401ks to make the mortgage.
I never said it doesn't happen, which seems to be the strawman most people are responding to. However, there is a huge gap between "it happens" and
> happy if your cost for seeing a doctor is less than 4 digits
which I indicates this is common and typical.
Socialized insurance rates in Germany are 15% of income. Unless your family doesn't earn any money, they have been paying far more than 50 Euros.
> In the US you can happy if your cost for seeing a doctor is less than 4 digits.
That isn't generally true. Every insurance plan is different. Cheap plans have a high deductible. It's similar to private insurance in Germany.
It's basically like this: If you're gonna be poor, go to Germany. Everyone else will pay for you. If you're going to earn well, leave Germany, otherwise you're going to be paying for everyone else.
1. The 15% of income has a cap. It's something like after 60k EUR in wages you don't pay anymore. Also, only 7.5% comes out of your paycheck, the employer pays the other half. When I was there a few years ago I was self employed so I had to pay "both sides". It would've worked out to roughly 750EUR/month for health insurance which had _0 deductible_ and _0 coinsurance_ for doctors visits or ER care and would've covered my entire family no matter on my children I had. Compare that with a typical HDHP family plan offered in the US and you're looking at $400/mo in premiums, with a $3k deductible and max OOP of $6k. The final cost is comparable.
2. The 15% is only if you participate in the public system - the private is not tied to your income.
You might delude yourself that this "other half" is paid by the employer, but in reality your employer takes that cost into account when employing you, so they offer you lower gross salary because of that. In other words: it's still paid by you, just indirectly.
EDIT: more clear wording.
That distinction is imaginary. It all comes out of your total cost for employer, which either goes to you or to (possibly earmarked) taxes.
This doesn't mean the amount is not fair (it very well might be). But it's important to realize it all comes from your paycheck.
This just means that paychecks are 7.5% lower then they would otherwise be. It is a mistake to think that the employer paid benefits are "free". The market adjusts. You find that out right quick of you are self-employed (at least in the US).
But still, if you count everything together, for a 2keur net paycheck you have to charge your customers 4.8k in my country (slovenia), and the government takes 2.8k (social benefits, pension, health, income tax and VAT). Say what you want, but 4.8k->2k is a huge amount of taxes.
...at which point progressive income tax starts kicking in badly.
> Also, only 7.5% comes out of your paycheck, the employer pays the other half.
Guess what, the employer pays 100% of your paycheck, including your vacation, pension, healthcare and taxes. It doesn't really matter to the employer how the cost is labeled. That's why you get to charge more when self-employed.
> The final cost is comparable.
Comparable? It's almost double if you don't take any care. Also, what if you don't have children? It's apples and oranges.
> The 15% is only if you participate in the public system - the private is not tied to your income.
Caveat: You are forced to take part in the public system unless you earn well or you are self-employed.
You should add this to your algorithm for location choice: If you get a serious health problem and want to become poor, come to the US.
However, if I were to get seriously and chronically sick I would back to my home country. Not that i couldn’t get very good care in the US, but the system here is just a massive burden compared to countries with universal coverage.
If you already have a serious health problem, you'll be hard pressed to find any country to take you and just take care of it pro-bono, if you're uninsured.
German public insurance only covers the bare minimum. I know enough people who are poor because of serious health issues. Sure, their medical costs were covered, but they're now welfare cases. They can't afford many treatments that would make their lives better. They would've had to buy extra insurance, but they chose not to, or couldn't afford it.
Relating that to the US: Don't skimp on insurance. Don't get an insurance that is capped at a low number, otherwise you will go bankrupt if shit hits the fan.
But shit will not hit the fan for the overwhelming majority of people. There's no good reason for someone in their 20s (or 30s) with, no dependents, no history of medical problems and doesn't partake in a dangerous lifestyle to load up on coverage. Loading up on coverage in that situation might make you feel warm and fuzzy. It might win you internet points. It is not financially sound.
And that's kinda the point of the parents' post, I think. If I were paying 15% of my income for socialized health care, I would be pissed if I ever had to pay anything out of pocket for my own medical needs.
Comments like this always miss the larger point, which is that healthcare overall is cheaper in socialized systems because the government as a large entity negotiates on behalf of citizens and puts strong downward pressure on prices.
Salaries for doctors are the highest in the US. If we want to move to a single payer system they will have to take significant pay cuts.
What happens in socialized systems is that the government does price fixing, which makes healthcare worse and it limits supply. Try getting a specialist appointment with socialized healthcare in Germany, it can take several months. Get private insurance (or pay out of pocket) and suddenly appointments become available. Doctors are leaving the country in droves.
Some of the hospitals in Germany are in an abysmal state, MRSA rates are extremely high:
They negotiate prices based on the size of the pool. This is why if you are a small business the rates you will get will be worse than if you were a large enterprise.
With socialized healthcare, the pool is the entire citizenry, which is what gives the government substantial leverage when negotiating.
That's not to say the American system is good, but I can't stand all this talk about how socialized healthcare is so great. It isn't. A lot of what people are calling "socialized" systems are actually private systems with a compulsion to purchase insurance, for example Switzerland, Netherlands, Australia. Even Germany technically has a dual system (public and private) but only the top earners are allowed to go private.
Incorrect. In the public system, the fees are negotiated between the GKV Spitzenverband (federal association of public health insurers) and the KBV (federal association of public doctors).
Germany still is in the top group regarding quality of care indicators.
As a Canadian, I will say there are a lot of people dissatisfied with the Canadian system. Likely to a lesser degree than in the US, but the system is far from perfect.
I'm 40, and my Mom was telling me about how my brother cut his head as a child, and the local small town doctor came in after hours to stitch it up. Different era.
ER is open 24/7 and doesn't turn people away even if they don't accept their insurance plan.
In two years we were there with our baby two times. Not charged a penny. During this time, I went once, my wife went once. In all instances we were reassured that it was appropriate to visit the hospital instead of visiting the GP the next day.
My wife firmly believes the US healthcare system is a giant scam where insurance companies leech off people without actually providing any value.
Health insurance in the US is built around providing value to employers. Most employers are concerned about which network is going to upset the fewest key employees and cost the least amount of money for the employer, while fulfilling all legal obligations, without making the employees spend too much time dealing with the insurance company when they could be working. Nicer employers may want to cover more of the cost, or want to upset fewer employees, or have specific things they want covered that aren't legally obligated.
There's also the problem that different groups of people want totally different things from the system. I like integrated care, because it provides me with a single place to go, that handles everything, even though it may not always be the best care. Other people are more focused on getting the best care, and are ok with (or prefer) to pick the individuals who provide each service, even though it means visiting multiple locations. Nicer employers offer you a choice of providers, but it would probably be less expensive for them if everyone was on one plan, at the cost of upsetting more employees.
The fact that you would go without thought of the cost but in a similiar situation would avoid because of the direct costs shows why the Ontario system is a poor model. The costs are hidden so more services are used. If costs were direct paid for out of your Ontario fund (a yearly budget that if not used would be carried forwarded or removed from your taxes) than a better balance could be found.
> The fact that you would go without thought of the cost but in a similar situation would avoid because of the direct costs shows why the Ontario system is a poor model
The pricing is hidden from me regardless, except that in one case people get the care they need and go on with their lives, and in the other I hear stories of people getting a surprise 4-digit bill in the mail three weeks later, after already paying through the nose for insurance.
When you look at international rankings of standard of living, the Ontario system is considered a good model (along with other similar healthcare systems such as those in nordic countries). The US model is poorer on several fronts, from pricing opaqueness to availability for low income people, and let's not even go into medical bankruptcies...
Lol. I wish. For me it was 5 digits. Closer to 6 than 4. And I had a $1,800/month premium for a family of 4. Spent multiple hours per week for months on end playing phone tag for the hospital and insurance company until it got resolved. Hospital billing also told me to not worry because nothing ever gets paid until both sides start suing eachother.
Yeah, this is peak efficiency. I just love taking up "resolving medical bills" as an unpaid part time job for the better part of a year.
But many places don't have any kind of Urgent Care centers, much less one that is open 24 hours a day.
* Potentially life-threatening emergency: ER
* Something like a broken bone or fever that needs to be fixed asap, but not life-threatening: Urgent Care
* Everything else that can wait a bit: regular doctor appt
They don't want anyone to risk staying home with their child if there's a chance that they are in danger
This is in Australia and there is no cost for this
We have late-night general practitioner services here (at least in the city), which I have used for less-urgent stuff.
They didn't have urgent care back then, but I understand there were "clinics" that could give those shots.
And if you get seriously ill and lose your job you are pretty much ... done! oO
If you do you can disregard this message. I hate to see legitimate new users being turned away because they feel like they’re shouting into an anti-spam void.
In Sweden, until you hit ~$65,000 in yearly income, all of the taxes you pay on income (which is a relatively high rate) goes to your local government. Only after that point, your extra income goes to the federal government. 
This model cuts out the immensely large federal government which serves as a middle-man for distributing the income you contribute to your local community, while simultaneously sucking out so much of it— either siphoning it to federal causes, or people's salaries chipping away at it as it's sloshed around.
It's much more efficient when the majority of your income taxes support your local community directly. In the U.S. right now, these localities rely on property taxes, which is _much_ smaller of an income stream. People supporting the Scandinavian model should understand that this is necessary, and that's even more true when your country is larger.
 https://www.nordisketax.net/main.asp?url=files/sve/eng/i07.a... Heard this point from Swedish family and having trouble finding it online, but the typical municipality income tax is 29-34% and corresponds to equivalent tax deductions from federal taxation, which seems to effectively have the same (or near same) result.
There isn’t explicitly, and I know that’s part of what the federal top-down model tries to prevent, but is it really working? The United States’ affluent areas are night-and-day to the poor ones.
If we think about the per-capita income in poorer areas of the States, and what can be taxed off of that, it seems like it’s still enough for that community to function.
The current U.S. model seems to result in everyone getting a much smaller pie, even if the government manages to change the portions of who gets what.
I'm not encouraging underage binge drinking, but if you want to have a quick pint with your high school senior, that's absolutely legal.
I live in Indiana. Lets shut down the interstates for non-Indiana citizens. Yes, that means the I69, I65, I70, I90 corridors.
The feds would have came to a 'deal', in new speak.
Not really. States like California are net payers, but only just, because they have large diverse populations and end up getting back almost all of what they pay in.
It's true that a lot of the middle states are net recipients, but most of them are still below $4000 per capita.
And the bigger problem is that so much of the money is wasted. Each Congressman goes to Washington to bring back pork, and they do, but pork is inefficient. So they bring back $10,000 per capita in funding after paying in $6000, but only $5000 of the $10,000 is put to productive use. Does that really help the states compared to just keeping their original $6000 and using all of it productively because you don't have to negotiate with 49 other states for how to spend your own money?
Moreover, the military budget is where a sizable chunk of the pork lives.
And the problem isn't just pork, it's the general inefficiency of hoovering up your state's money and then sending it back with strings attached. Federal programs can require hot garbage like designated "affordable housing" (i.e. cordoning off a slum to concentrate poverty in) as a condition for housing grants, or "teach to the test" education programs like NCLB. It's not a stretch to claim that the states could be better off with less money but without the strings attached.
If you have to spend five hours a month to prove that you qualify for a program that pays $80/month when your labor is worth $10/hour, you're not receiving net $80/month, you're receiving net $30/month and then getting paid to labor for five hours, the second of which you could have done for any other employer using the same five hours, so the value of the program is $30/month even though it costs $80/month to the taxpayer. Plus whatever administrative costs exist on the government's side. And then whatever value the alternative employer would have derived from having a worker available to work those extra hours.
It's even possible for programs to have negative value. They can cost money and then destroy more value than that. A lot of housing and other subsides can do this, e.g. you give some people $500/month for housing, but that only causes local rents to increase by $150/month -- on everyone, including the people not eligible for the subsidy. So on paper you have a thousand people receiving $500/month and you think you've gained $500,000, but then you account for the five thousand people who now pay $150/month more, cost of $750,000, and you're net -$250,000. Meanwhile the taxpayer still had to pay $500,000 to make that happen.
But realistically how could Montana get an 80% increase in efficiency while providing similar services to the federal government?
And according to normal economics textbooks increasing market rent isn't destroying value. If more people move to a city which drives up demand and rent. Economists don't think of that as value destruction. In classic economics textbooks the value destruction caused by subsidized rent is that some people will spend $1000 on rent that they would never rent without the subsidy because they only get $800 of value from it + the dead weight loss of the taxes that funded that subsidy.
By removing all the strings. The problem with the existing federal programs is that they're numerous, complex and individually small, which is the recipe for inefficiency. That results in high administrative costs -- not only for the government but also for the recipients, and only the first cost is actually accounted for in the government budget, even though the second is much larger. Because government agencies do their tasks as a full time job but the recipients are novices who have to amortize the cost of learning and using the system over only their individual use of it. Again, suppose someone has to spend five hours a month to navigate a program that pays $80/month. Then if their labor is worth $10/hour, just their side of the transaction contains $50/month worth of inefficiency.
Even the fact that housing grants have to be spent on housing is inefficient, because it distorts the market for the thing being subsidized:
> And according to normal economics textbooks increasing market rent isn't destroying value. If more people move to a city which drives up demand and rent. Economists don't think of that as value destruction. In classic economics textbooks the value destruction caused by subsidized rent is that some people will spend $1000 on rent that they would never rent without the subsidy because they only get $800 of value from it + the dead weight loss of the taxes that funded that subsidy.
But this isn't caused by more people moving to the city, it's caused by the people who already live there getting a bunch of money they're only allowed to spend on rent. Then some of them would prefer to have fewer roommates or a bigger apartment, so they try to use the money for that, which requires the people who would otherwise live in those other apartments to have to outbid them, causing everyone to have to pay higher rents on the same apartments.
Meanwhile the rent increase goes to landlords who typically remove it from the local economy, either because the building isn't owned by a local to begin with, or because the owner is a wealthy person who then invests the money in index funds etc. which transfers ~98% of it out of the state. So the value isn't "destroyed" but it immediately leaves the state, which from the state's perspective is basically equivalent.
Of course that deduction is gone now, which just further solidifies government power.
It's a tough issue. From the Federal perspective is makes a lot of sense to get rid of the SALT deductions, and I suspect the next time the Dems are in charge they will "be unable" to restore the deduction for "reasons", since both parties want the extra revenue.
As an example, if your federal marginal rate were 25%, paying $4k in state taxes would only get you $1k off your federal taxes, not $4k.
New York City spends about $30k per homeless and you still cannot walk a block without seeing one.
It's not about the money...
That is a perspective from somebody living in a place with state income tax. Life is so much better when you are not paying state income taxes. Texas, Florida, and a few other places have no state income taxes.
If you ask people if they support the abstract idea of having a military so we're not invaded by foreign forces, or having a program to prevent the elderly from dying in the streets, they say yes.
But then you ask them whether social security should send a larger check to a retired Jeff Bezos than a retired firefighter on a fixed income, or the government should spend billions of dollars on equipment the military itself says it doesn't need but the Congressman from the district which is getting the contract to build it says that it does, and the public support for that falls off pretty fast.
And those "features" cause those programs to cost hundreds of billions of dollars more than they need to, which money could otherwise go to infrastructure and schools and tax cuts for the middle class, all of which are also immensely popular with voters of all kinds. But won't happen when the programs absorbing more than three quarters of the total budget are administered in a federal system where the Congressmen are rewarded for bringing home the pork and Florida is an important swing state full of retirees.
And the DoD and the VA are also considered separately, but let's not pretend they're unrelated. If you have twice as many soldiers today then you need twice the VA budget tomorrow.
Well, there's also Defense, and then service payments on the debt. Those are the big 3 without question. So "the wrong people" must be in there somewhere?
But the real reason we give more to the feds is because if we didn't it would be AWESOME for places like New York, Minnesota, Texas, Delaware, California etc, and TERRIBLE for places like Wisconsin, Alabama, South Carolina, and Florida.
Now, consider how the above is impacted in the wake of Citizens United where $1 == 1 vote, and Corporations are People Too.
The idea that the poor will mass migrate to California and the rich will mass migrate to South Dakota is pretty unrealistic. The poor can't afford to live in California even with social assistance, and the rich don't want to live in South Dakota no matter how low the taxes are.
Because money buys stuff taxpayers want. Middle class people want good schools and functioning transit and to know they're going to have a secure retirement. The premise of having the government do these things is that they can do them at least as well as the market. If they succeed they'll have no trouble attracting people to come there and pay taxes in exchange for receiving those services. If they fail and are then out-competed by other states that do better, whether by leaving things to the market or otherwise, isn't that a good thing? It requires the underperforming states to improve or lose population.
I might be off the mark here, but from my understanding wasn't unrestricted migration one of the big drivers behind Brexit? Or at least the idea that the "poor countries" were "taking advantage" of the "rich countries"?
The thing about rich people moving to places with lower taxes and poor people moving to places with more services is that it's the sort of thing that seems intuitively obvious until you actually think about it, and you realize it's like arguing that lakes are impossible because water evaporates.
It's not that water doesn't evaporate. It's not that poor people don't prefer more services and rich people don't prefer lower taxes. It's that everything is not one dimensional and there are other factors that outweigh that one by enough that the lake is still full of water.
It’s true for blue collar workers as well: try hiring a contractor to remodel your house and then watch them leave the job unfinished because they got a better paying gig in UK (that actually happened to a friend of mine)
Leaving the EU will mean more migrants from outside of the EU - so will actually cause the situation a lot of Leavers were worrying about to get a lot worse.
See Robert Peston's WTF? for details.
Are you serious?
Expand your timeline.
Those high earners will screw up the economy of their destination state accidentally gutting the lower middle class, institute social programs to deal with the all the problems this creates, realized they just created the same dystopia they fled and move again.
It's like a perverse form of rolling upgrades.
You can see this process in action in places like CO and the PNW states which are starting to flip from "rich people move here" to "poor people move here". TX will probably start flipping soon.
Major urban areas with lots of job opportunity seem vacuum up the wealthy regardless of the state wide trend (no matter how bad NY state gets upper middle class people in search of a lucrative career will be moving to NYC). I'm not sure how that plays into things.