Tuesday, September 8, 2009

If You Can't Shake Hands with It, It Doesn't Pay Taxes

Here is a sentence that will annoy every economist, independent of political affiliation:

Those involved in negotiations over health care were also weighing a proposal ... that would impose new fees on some sectors of the health care industry, but none on individuals. (emphasis added)
All taxes are taxes on individuals. A tax on businesses means either that the owners earn lower profits, or the employees earn lower wages, or the customers pay higher prices.

In this particular case, the main impact is likely to be higher prices. Thus higher fees on the health care industry mean more expensive health care. Some might argue this is a cost worth paying, but it is impossible to avoid the fact that it is a cost, and that it is borne by individuals.

11 comments:

Mike Huben said...

By the same standard that "all taxes are taxes on individuals", then all expenses are expenses for individuals. I'd like to see some intellectual consistency here then, admitting then that a government plan for reducing the expenses in health care (such as with single payer) means that individuals have fewer expenses.

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