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December 12, 2006

« Long tails and tall spikes | Main | New Orleans immigrant baby boom »

I'm not saying the authors of this study don't have an ax to grind, but the empirical findings are quite a wake up call. The study released by the Canadian Centre for Policy Alternatives compares the social costs and benefits of taxation in low and high tax countries around the world.

"...Americans bear incredibly severe social costs for living in one of the lowest taxed countries in the world. For a strikingly large number of social indicators, the United States ranks not only near the bottom of the 19 industrialized countries, but it ranks as the most dysfunctional country by a considerable margin: Poverty is widespread. A greater percentage of Americans, and in particular children and the elderly, live in poverty in the United States than in any other industrialized country in the world.
• The income of vulnerable citizens, such as the elderly and those with disabilities, is much lower compared to others in the United States than almost all other industrialized countries.
• Living conditions are shockingly unequal. By any measure, income is distributed more unequally in the United States than in every other industrialized country. In 2004, America’s richest 1% held more of the nation’s wealth than the bottom 90% (34.7% versus 29.9%).
• Ordinary workers in the United States have less economic security than workers in any other industrialized country ."

The full report is here.

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Comments

Michael Bindner

It is a bigger country, so you will get more diversity. Also, being poor here is a cakewalk compared to being poor in Calcutta. It depends on the measure used to define poverty. Defining in government benefits and the number of poor is lower, although more scandalous, because than you get into the homeless family population whose existence is more like that of those in Calcutta.

How me measure wealth is also skewed. If Social Insurance entitlements and the market value of securities were counted as savings, we are a lot wealthier than it first appears.

Getting to the main topic, taxation, the thinking of the tax and spending avoiders always surprises me. By not paying for health care through the state, they are paying for it in their insurance and doctor bills, since these absorb the written off cost of health care for the uninsured and spread it to everyone. Would a state solution be less costly? Maybe, maybe not. The allocation problem would certainly be less, as at some point if all payments came through a governmental single payer that payer could no longer negotiate down prices so much (since they could not be dumped on someone else). Higher use might also raise demand, unless copayments were increased for those who could afford them.

Prisons, education and mental health also come to mind. If there weren't lockem up conservatives who also shortchanged education for minorities at every given opportunity you would have better schools and more diversion to educational and treatment programs, which saves on prison costs and on actual damage done by criminals (which is collected in insurance and health care costs as well as lost income - not to mention lost creativity by both victims and perps).

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