In 2011, the first group of baby boomers will reach the age of 65. When the last of that generation retires in 2032, 77 million of them will have ceased working and paying taxes and will have begun receiving taxpayer-funded health care and pension benefits.
Consumers recently lost a money-saving opportunity when a Food and Drug Administration (FDA) advisory panel voted against over-the-counter (OTC) access to the cholesterol-reducer Mevacor. This is the third time the FDA has turned down a request to make cholesterol lowering drugs available without a prescription, thus denying consumers the power to control an important aspect of their medical care.
The concept of a minimum wage seems straightforward: If we believe the wages of some workers are too low, we should pass a law requiring those wages to be higher. What could be simpler? The problem is that increasing the minimum wage may make some people better off, but others will be harmed. Experience proves that the minimum wage hurts more people than it helps.
While the idealists among us still hope for a major overhaul of our health care system, there are some minor reforms lawmakers could enact that would pay big dividends. Here are 10 suggestions along with the Web addresses of NCPA publications that discuss them in greater detail.
Support is growing for a proposed solution to the rising number of uninsured Americans: a health insurance tax credit. If properly designed and implemented, a tax credit would allow uninsured, low income individuals and families to purchase affordable, quality health insurance.
As the year ends, hundreds of thousands of American workers are scrambling to spend down their flexible spending accounts (FSAs). Some buy designer eyeglasses. Others schedule a last minute appointment for teeth cleaning. Some plan a doctor visit or diagnostic test of questionable value. In almost all cases, this year-end spending goes for items and services that are probably worth less than their cost.
As the baby boomers near retirement, defects in the nation's private pension system are becoming obvious. Only about half of workers contribute to an employer-sponsored pension plan in any given year, and Individual Retirement Account (IRA) participation rates are substantially lower. Among workers with tax-preferred retirement saving plans, few make the maximum allowable contribution. And despite the many private savings incentives, many households approach retirement with meager funds.
Recent federal budget projections show much larger deficits over the next five years than were expected just a short while ago. However, these short-term projections convey almost no information about the true magnitude of our nation's financial problems. We need to adopt a comprehensive fiscal accounting system that communicates the size of unfunded future federal spending commitments under current policies.
On January 1, 2001, a 13 percent flat tax on personal income took effect in Russia. It replaced a three-tiered system with a 30 percent top rate on taxable income exceeding $5,000. The old system was complicated, and because of the high rates evasion was widespread. It also produced little revenue. The new flat tax has achieved greater compliance due to its simplicity and low rate. It is producing far more revenue than the former system.
U.S. corporate income taxes are among the highest in the world and – unlike most developed countries – the United States imposes them on income earned by corporate subsidiaries in foreign countries. In recent years, an increasing number of American companies have reincorporated abroad to avoid these U.S. taxes. Their actions have been under fire.
One of the cornerstones of the global warming "call to action" is the claim that average global temperatures over the last 1,000 years have remained rather stable, except for the significant warming during the last 100 years. This view is promoted by the United Nations Intergovernmental Panel on Climate Change (IPCC), which argues that recent warm years are mainly due to greenhouse gases emitted from the burning of fossil fuels.
Families USA publishes an annual report analyzing prices of the 50 top selling drugs used by seniors. The latest survey claims that these drugs' prices rose about 30 percent over the past five years – or 2.5 times the rise in the consumer price index.
The rising demand for more educated, experienced and technologically able workers has produced a more dispersed distribution of income. The increasing income gap between the highest and lowest paid workers is a concern if some groups of workers are fated to remain at the bottom of the economic ladder throughout their working lives.
Last month, the House of Representatives and its Ways & Means Committee Chairman Bill Thomas (R-Calif.) advanced legislation to create tax-preferred savings accounts for medical expenses that would reform private health care and retiree health care.
The No Child Left Behind Act, the new school accountability measure that became law in 2001, requires that all states develop and administer standards-based tests to students in grades 3 through 8 and report results by student subpopulation (race/ethnicity, gender, socioeconomic status and disability) for districts and campuses.
Some things never seem to die. The marriage penalty is one of them. The new tax law benefits most married couples somewhat, but it does not eliminate the so-called marriage penalty for lower- and upper-income couples. Even more important, the new law does not address other tax rules that financially penalize married couples and two-income couples
The Bush administration is proposing the most sweeping improvements in Medicare since the program's inception in 1965.
In just 15 years, workers' Social Security payroll taxes will fall short of what is needed to pay promised benefits, and the system will require increasing cash transfers from general revenues. One way to begin alleviating the shortfall is to allow workers to set.
The Congressional Budget Office (CBO) reported this month that while the number of chronically uninsured Americans is lower than commonly believed (between 21 million and 31 million, rather than 41 million), the number of Americans who go without health insurance for brief periods is around 60 million.
Rep. Richard Gephardt (D-Mo.) recently unveiled the centerpiece of his presidential campaign: a plan to encourage near-universal health coverage. The plan calls for replacing the existing system of federal income tax subsidies for health insurance with a much more expensive system.
The ultimate goals of a new "National Energy Policy" should be economic growth and consumer freedom of choice. Unfortunately, versions of the energy bill currently being debated in Congress include some economically harmful proposals designed to appease certain politically powerful constituencies.
Congress can help control health care costs, reduce the number of uninsured and promote quality medical care by making an existing health benefit – Flexible Spending Accounts (FSAs) – more flexible, portable and widely available. Doing so would give millions of Americans more control over their medical care and make them more cost-conscious patients.
The proportion of health care paid directly by consumers has been falling for decades. In 1960, individuals paid directly for 50 percent of their health care. Today they pay for only 15 percent. The other 85 percent is paid by third parties, generally employers, insurance companies or the government. See Figure. As their share of health expenses declined, so also did consumers' interest in controlling health care costs.
Prices for medical services have been rising faster than prices of other goods and services for as long as anyone can remember. But not all health care prices are rising. Although health care inflation is robust for those services paid by third-party insurance, prices are rising only moderately for services patients buy directly.
The 2003 annual reports for Social Security and Medicare highlight the financial burdens these programs will create for future generations. If they are not reformed in a timely and responsible way, Social Security and Medicare will consume an ever-increasing portion of workers' incomes as the government seeks to keep its promises to future retirees.