from "Give Over," The Economist, 2008.03.12Turns out that in Canada, unholy land of socialized medicine, folks actually have a lower tax burden than in profit-based-healthcare-loving America.
Now this is a very incompete picture: the graph gives tax rates for single folks with no kids. It also leaves unclear whether that tax burden includes the health premiums people pay to their province in Canada in addition to their taxes.
But the tax burden listed definitely doesn't include the amount that we Americans spend on private health insurance and out-of-pocket costs. Consider my family's health insurance: we pay 8% of our income for a high-deductible policy. If I get whacked by a semi on my bicycle (make room, please! Thanks!), we'll burn up a good 20% more our income meeting our deductible. So we could easily spend 50% of our income on health and taxes, more than even the heavily taxed Germans, Belgians, and Danes... and we get less service for our dollars than those folks do for their euros.
Fortunately, most of us aren't spending 28% of our income on healthcare. A July 3 Economist article marking the 60th anniversary of Britain's National Health Service notes that the United States spends "15.3% of its national wealth on health." Of course, Britain's socialized system spends just 8.4% of the UK GDP, and it manages to cover everybody. Plus, no one in England is worried about going bankrupt due to medical expenses. Sounds like a good return on investment to me.
Those numbers are tucked in a larger quote about the feasibility of socialized medicine. The author refers to the "utterly mistaken" assumption at the inception of Britain's NHS in 1948 that demand for health services would decline in the coming decades as health improved. Instead, people got richer and wanted more (our needs always expand to consume our wallets). The author says the following about meeting those increasing healthcare demands:
Even the Tories agree: socialized medicine works. Less expense, better results, and a more moral system. Hear hear!
Now this is a very incompete picture: the graph gives tax rates for single folks with no kids. It also leaves unclear whether that tax burden includes the health premiums people pay to their province in Canada in addition to their taxes.
But the tax burden listed definitely doesn't include the amount that we Americans spend on private health insurance and out-of-pocket costs. Consider my family's health insurance: we pay 8% of our income for a high-deductible policy. If I get whacked by a semi on my bicycle (make room, please! Thanks!), we'll burn up a good 20% more our income meeting our deductible. So we could easily spend 50% of our income on health and taxes, more than even the heavily taxed Germans, Belgians, and Danes... and we get less service for our dollars than those folks do for their euros.
Fortunately, most of us aren't spending 28% of our income on healthcare. A July 3 Economist article marking the 60th anniversary of Britain's National Health Service notes that the United States spends "15.3% of its national wealth on health." Of course, Britain's socialized system spends just 8.4% of the UK GDP, and it manages to cover everybody. Plus, no one in England is worried about going bankrupt due to medical expenses. Sounds like a good return on investment to me.
Those numbers are tucked in a larger quote about the feasibility of socialized medicine. The author refers to the "utterly mistaken" assumption at the inception of Britain's NHS in 1948 that demand for health services would decline in the coming decades as health improved. Instead, people got richer and wanted more (our needs always expand to consume our wallets). The author says the following about meeting those increasing healthcare demands:
It seems crazily optimistic to hope that a tax-funded health system can meet these demands—but probably less crazy than relying on other systems. At the last count, America spent 15.3% of its national wealth on health, compared with Britain’s total of 8.4%, but many Americans are uninsured. France’s system of social insurance is stretched. Moreover, in the future, state-financed universal health care could offer the best way to deal with the consequences of genetic testing, which will be able to identify people’s susceptibility to diseases more precisely. Better-off patients should be allowed to pay for extra services that the NHS can’t afford, while staying inside the system (a reform that is currently being pondered by a government review); otherwise, the middle classes will opt out, and the sort of social solidarity on view in the Bagehot family’s maternity ward will crumble. But the debates that once raged about switching to a different model have abated: the principle of tax funding for most services seems entrenched. David Cameron’s Conservatives accept it. [Bagehot, "The Shock of the Old," The Economist, 2008.07.03.]
Even the Tories agree: socialized medicine works. Less expense, better results, and a more moral system. Hear hear!
So this chart has NOTHING to do with Health Care? Just taxes.
ReplyDeleteA really bad thing about nationalized healthcare is that you can't compare it to private healthcare; because everyone in that sample of society is on nationalized healthcare. So their taxes and health costs don't relate to a society within a free-market health care system.
With National Health .gov, you are putting the burden of others healthcare on those that can only afford their own.
But you do make a good point we don't have money to spend on more taxes(like nationalized healthcare.)
I mean what if I get hit by a truck? Do we need nationalized disability insurance too?
New title if Obama is elected.
ReplyDeleteWhat's in Your Wallet? Darn Little, After Taxes and New Taxes and Raised Taxes."
Unless, of course, you are those who don't pay any taxes and just get the goodies!
"A really bad thing about nationalized healthcare is that you can't compare it to private healthcare; because everyone in that sample of society is on nationalized healthcare. So their taxes and health costs don't relate to a society within a free-market health care system."
ReplyDeleteActually, that's incorrect, Anon. You can make comparisons between free market systems and nationalized systems. You look at health spending as part of GDP and the average annual per-person spending, just like the NPR stories Cory referenced do.
Check out the link, and you'll see. It figures in all health care spending: taxes (in a nationalized system), health insurance premiums, etc. The stats are pretty clear. The reality is that Americans do spend more on health care than the citizens of countries with either nationalized health insurance or nationalized medicine. And we get less coverage.
It comes down to taking care of people or letting them suffer. I agree with objections people need to look after themselves, but that's the point of health care. Shouldn't our taxes look out for one another? Health care is a real human need.
ReplyDeleteInteresting graphic. But doesn't it leave out the value-added tax (VAT)? In some countries, and for some occupations, that amounts to a separate gross-receipts tax of 15 percent and more, and it also hits you when you buy stuff.
ReplyDeleteStill, if all worries about financial ruin resulting from illness or injury could be swept away, even that level of taxation might be acceptable. But there must be a point beyond which taxes cannot rise before even the European mind will push back. Are we not now seeing this to some extent over there?
I have the old American distaste for unrestrained government growth, but I also abhor social Darwinism. Which is worse? I guess it depends on how old you are, how sickly you are, and how lucky you are.
The graphic suggests that maybe I ought to "retire" to Mexico right now, but I had better learn Spanish first, and make sure I can get a good supply of acidophilus capsules. However, I have heard that Mexican doctors are pretty good.
You're right, Stan: there is a limit to how much taxation any society can bear. But as JohnSD notes, taxes are supposed to go toward looking out for our fellow citizens, and that requires a certain minimum that America isn't reaching.
ReplyDeleteI have an uncle in Arizona who's traveled to Mexico for medical procedures, sicne they are much cheaper. However, I'd be a little embarrassed to declare that Mexico can solve America's health care problems better than America can.
Taxes are to be used for the common good. Not sure that includes health care. In my mind, it's more infrastructure and not so much social programs. I have no problem with helping those who have disabilities, are unable to work, etc etc. But I have a big problem paying for the health care of people who have the opportunity to work at jobs that will pay benefits but they simply refuse to as it's easier to get the freebies, or for illegals in this country who don't pay taxes and of course don't have insurance. The gov't does not exist to provide everything to everyone. It's up to peole to provide for themselves. Granted, some can't, but most could.
ReplyDeleteSomeone somewehre said that illegals do pay income taxes - adn to this I say no way. They can claim enough dependents so that nothing is withheld, and since their SS #'s, if provided, are false anyway, they pay no taxes.