We do not always spend health care dollars in the most productive way. The way we pay for health care encourages both patients and physicians to overuse resources. On the average, every time a patient spends a dollar on health care, 79 cents of it is paid by employers, insurance companies, government and charitable giving. That encourages patients to purchase services that they would not purchase if they paid the full bill.
Since 1965, the share of gross domestic product (GDP) devoted to the U.S. criminal justice system has more than doubled. Yet the amount of crime reported to the police is near an all-time high and the amount of violent crime reported is at an all-time high. Perhaps it is time to consider turning more of the criminal justice burden over to the more efficient, innovative private sector, which already plays an important part in the system.
This study examines the most serious health policy problems facing Texas and analyzes the best and worst proposals for state health care reform.
We have analyzed the distribution of education dollars before and after Texas adopted the "Robin Hood" system of financing schools — a system under which taxes are raised countywide and then distributed to school districts. Although supporters say the Robin Hood system was designed to reduce inequality by shifting funds from wealthier to poorer school districts, we find that inequality of education resources has actually increased under the system.
Econometric studies cast serious doubt on the benefit of most government spending. They show little relationship between most government spending – including education and highways- and economic growth.
A new model of the medical marketplace shows that U.S. health care costs are rising because Americans are overinsured and that government policies are the primary reason. The most important change in health care finance in the past 30 years is the increased opportunity to spend other people's money:
Firearms are used to commit as many as 650,000 crimes each year. But firearms are also used to prevent crimes as many as one million times each year. In fact, criminals are three times more likely to be killed by armed victims who resist them than by the police. Would tougher gun control laws make our lives safer? Fair appraisal of the issue requires us to put aside some common myths.
Texas is suffering from an epidemic of crime that began in the late 1960s and early 1970s. Each year, about 2.8 million Texas — one out of every three households — are victims of serious crimes.
The proponents of indoor air regulation seek to protect workers' health and safety. However, since there is a relationship between low income and mortality, high regulatory costs may actually increase death rates. Further, the death rate increase may be most pronounced among workers with the lowest incomes.
As state governments take on the difficult task of health care reform, legislators must accept the fact that federal policy — particularly tax policy — has shaped and molded our health care system. Since the states cannot change federal policies, they cannot address the root causes of most of our problems.
Before the end of this decade, Social Security and Medicare will begin paying out more in benefits than the payroll tax (FICA) collects in revenues. As a result, taxes will have to rise. According to realistic projections, the taxes needed to fund these two programs will continue rising as far into the future as anyone cares to look.
Today, there are more than 8,757 tariffs – plus vast numbers of quotas, so-called voluntary import restraints and other import restrictions. All too often these barriers to trade impose their greatest burdens on low-income families.
As the U.S. economy languishes at the start of an election year, leaders in both political parties are proposing tax relief as a remedy. Ill-conceived tax cuts, however, would do nothing to help the economy and would further increase the federal deficit. Fortunately, there is a better way. By selectively reducing taxes on capital and labor, we can stimulate the economy and reduce the deficit at the same time. This pro-growth strategy focuses on three types of tax measures.
This report is based on the neoclassical economic theory of capital, adopted by most of the leading capital theory economists of the 20th century. The theory is consistent with the last 37 years of empirical evidence and the observations of economists extending back into the 19th century. Among the report's most important conclusions – supported by both theory and evidence is that the aftertax rate of return on capital tends to be constant:
Health care costs are rising in the United States for the same reason they are rising in every developed country: most of the time when we consume medical services we are spending someone else's money.
Countries with national health insurance make health care "free" to patients and at the same time limit spending and access to modern medical technology. As a result, there is widespread rationing, bureaucratic inefficiency and a lower quality of care.
There is a consensus among the economists testifying that the reasons for slower growth are the same reasons for the current recession: higher taxes on labor and capital and an increase in costly regulations over the past three years. The current recession is a man-made even, not a natural one, and the price the American people have paid has been high.
Americans are being besieged with advice on how to be "good environmentalists." Advice on what products to buy and what actions to take is routinely given to consumers, legislators and even school children. The problem is the advice is often wrong and, if followed, could cause environmental harm.
For years, the most extreme global warming alarmists have warned that a significant increase in average temperatures would cause ecological disaster.
Technological changes are increasing the mobility of labor and capital around the world. Because of this mobility, governments no longer have a fixed supply of productive resources to tax and regulate. Instead, governments are in active competition with each other to make their countries attractive to workers and investors who have increasing freedom of choice about when they produce, save and invest. Because the most effective way to compete for capital and labor is to reduce the burden of government, government spending is no longer growing relative to the size of the economy in most developed countries.
A new bill introduced by Lloyd Bentsen (D-TX) and William Roth (R-DE) would restore the right of every American to contribute up to $2,000 a year to an IRA account. As an alternative, the bill would give people the option to contribute up to $2,000 to a "backended IRA," where contributions are made with aftertax dollars and withdrawals are tax free. Because the marginal tax rate will be higher at the time of retirement than currently for a significant number of people, we predict that about 60 percent of new contributions would be to backended, rather than traditional, IRAs.
In the world today, there are about 150 governments and five billion people. The environmental movement has increasingly looked to the 150 governments to solve problems, while ignoring the role of the five billion people. Yet the record of government has been disappointing.
This study finds that state and local taxes (expressed as a fraction of personal income) over the period 1957 to 1987 had a major impact on state economic growth.
Prior to the 1980s, most people assumed that if governments raised tax rates they would collect more total revenue from taxpayers. We now have dynamic evidence from the United States that a decrease in tax rates can lead to larger revenues.
Texas is suffering from an epidemic of crime that began in the late 1960s and early 1970s.