For our baseline evaluation (with τ = $7, 758), we calculate that the counterfactual, equilibrium payroll tax t could be 11 %. That’s, switching to payroll tax financing would add an extra 11 % to present payroll and earnings tax charges.
That second sentence is wrong. Including an 11 % payroll tax wouldn’t add “11 % to present payroll and earnings tax charges.” It will add 11 proportion factors, a unique matter certainly.
Curiously, of their summary. Finkelstein et al word that with such a tax changing the present system, “non-college employment would have been almost 500,000 greater.” That is sensible. However wouldn’t faculty employment be decrease? Sure, it could. On web page 8 of their Appendix, they level out that faculty employment would fall by 371,593, non-college employment would rise by 457,288 and whole employment would rise by solely 85,696. However they don’t appear to assume that though a rise of almost 500,000 jobs for staff who are usually not faculty graduates is price mentioning within the summary, a lack of “almost 400,000 faculty jobs” isn’t.
Their evaluation is constructive, not normative. So one can’t essentially conclude that they’re advocating such a hefty payroll tax. My guess is that they’re, although. One cause I believe that’s that they quote, with out commenting, Emmanuel Saez and Gabriel Zucman’s assertion that the present system of employer/worker financing “is probably the most unfair sort of tax.”
They do level out how enormous a chew medical health insurance takes out of pay, particularly for staff with no faculty training:
Common insurance coverage premiums for employer-provided medical health insurance had been about $12,000 in 2019. This quantity is about 25 % of the common annual earnings for a full-time, full-year employee with no faculty training (about $50,000), and about 12 % of the common annual earnings for a full-time, full-year college-educated employee (about $100,000).
That 25 % quantity is stunning however true. After all it’s doable that the common employee will get massive worth from these expenditures. However the authors don’t tackle that.
Are there different methods of constructing medical health insurance cheaper by making well being care cheaper? There are. The federal and state governments may decontrol provide, permit extra immigration of docs, and eliminate the requirement that a physician be a intermediary for pharmaceuticals, as is finished in another international locations. Sadly, the authors take into account none of those methods.
The second-last sentence of their summary is attention-grabbing. Why point out decreasing well being care spending as % of GDP in the US (16.8 % in 2019) to the a lot decrease % in Canada (10.8 %), a discount of 37.5 %, except the authors are treating as a severe possibility the imposition of Canadian-style rationing?
Word: The Becker Friedman Institute is, after all, named after Gary Becker and Milton Friedman.
