Marginal tax rates of 70% for the working poor

[drscott]

Greg Mankiw points to this back-of-the-envelope calculation that suggests the working poor will find 70% of their increased income taxed or clawed back under the proposed health insurance reform bills (but since the details remain to be settled, a complete appraisal is not yet possible.)

This means many poor families will discover there's almost no incentive to taking a better, higher-paying job.

This, along with the high hidden tax in the form of compulsory, higher-cost insurance premiums for healthy younger people, makes this proposal one of the largest transfers of wealth in history from young working stiffs to over-50 slobs with lifelong bad habits.

While the proposals do allow for rewards to company-insured people who maintain good habits, on the whole it removes any financial incentive to maintain good diet and exercise habits for almost everyone else.

Comments

[balanceinchaos.livejournal.com]

Uhm... okay... but I have to point out that for myself, and many of the people I know who either work very hard to eat well, live healthy, be fit... or to return to such a lifestyle... "insurance incentives" don't even show up as a blip on our play fields. I have to also say I've never heard a single client of mine come to me for exercise/fitness advice/training with a stated reason of "insurance costs".

I have NEVER received an incentive from my doctors or my insurance companies to do anything to improve my health... WHY?!? because they use outdated and farsical measurements of health (*cough* BMI *cough*) to rate whether or not I was healthy.

Honest and for true, the last time I got insurance on my own, I was 188lbs, 10% body fat, 6 pack abs, and 32" waist. The old-fat insurance agent looked me straight in the eye, asked my weight and height, looked at his chart and said I would have to pay $10 more a month for being "over weight"... to which I incredulously looked at him, stood up, lifted my shirt, and asked "WHERE?!?"

it didn't matter that it was quite obvious I was in peak physical health, I did not match "the charts" and therefore was an insurance risk... he just shrugged and said "that's how it is... lose weight" (I'm sure he left my house and hit dunkin donuts, fat bastard)

[dr-scott.livejournal.com]

Obviously the BMI is ridiculous. Getting insurance privately often involves a doctor visit, and there's no reason why cheap technology allowing on-the-spot lipid profiles and body fat measurements couldn't be used. The trend in many high-cost states to simply ban any discounts for being in better health is even stupider; I certainly don't pay much attention to discounts in my habits, but many people do respond, as is seen in those programs (like at Safeway) where employer-insurers reward better habits and end up cutting healthcare costs while having healthier employees. In community-rating states, insurers sneakily try to recruit the healthiest by advertising in health clubs, etc.

[balanceinchaos.livejournal.com]

damn it! don't put photos up like that when we're having a serious discussion! I miss your well constructed arguments wiping the drool off my keyboard!