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Saturday, January 28, 2012

Basics: America's Relative Decline in Health in One Table

I've reported before on how the U.S. has seen less life expectancy growth than other rich countries, while at the same time increasing health care spending at a more rapid rate. Another way to see America's relative decline in health outcomes is through the evolution of life expectancy compared to all rich countries over a longer period of time. The World Bank's World Development Indicators database goes back to 1960 and its most recent figures are for 2009. We can see, then, what has happened over a 49-year period.

The table below includes all members of the Organization for Economic Cooperation and Development, excluding former Communist countries (most of which were not independent in 1960) and Israel (for which World Bank data does not go back to 1960). Of the 27 OECD members included, only four (Denmark, Iceland, Netherlands, and Norway) have seen less growth in life expectancy since 1960, and Sweden's growth has been the same at 8.3 years. Only two OECD members today have a lower life expectancy than the U.S., and both (Mexico and Turkey) are much poorer than the U.S. South Korea and Chile, both developing countries in 1960, have now surpassed the U.S. in life expectancy.

While health outcomes have certainly improved over the last 50 years, we can see from the table just how small those gains are relative to what other countries have been able to achieve. And remember, these gains have come at much greater economic cost.

Country Name
2009 1960 Increase
81.5 70.8 10.7
80.1 68.6 11.5
79.7 70.1 9.7
80.7 71.1 9.5
78.8 57.0 21.7
78.6 72.2 6.4
79.7 68.8 10.9
81.1 69.9 11.2
79.8 69.6 10.2
80.2 68.7 11.5
81.5 73.4 8.0
79.5 69.7 9.8
81.4 69.1 12.3
82.9 67.7 15.3
Korea, Rep.
80.3 53.0 27.3
80.1 68.3 11.8
76.5 57.0 19.4
80.5 73.4 7.2
New Zealand
80.3 71.2 9.1
80.8 73.5 7.2
78.7 63.0 15.7
81.5 69.1 12.4
81.4 73.0 8.3
82.0 71.3 10.7
73.4 48.3 25.2
United Kingdom
80.1 71.1 8.9
United States
78.1 69.8 8.3

Wednesday, January 25, 2012

Jon Stewart Delivers the Goods on Mitt Romney's Taxes

Mitt Romney claims to simply have been following the law in how he paid his taxes for 2010 and 2011. As we have seen, he was able to use the carried interest loophole (taxing hedge fund managers' fees as if they were profits and therefore subject to the 15% capital gains rate rather than being ordinary income) to reduce his tax rate below 14%. But how is that loophole still in existence, despite a bipartisan effort to kill it in 2007?

Building on a recent New York Times story*, Jon Stewart spilled the beans on Romney tonight. On "The Daily Show" (via Mediate, h/t @Phostir), Stewart poses and answers that question. Starting at 3:27 into the clip, Stewart notes Romney's claim to be simply following the tax laws as written. He hows a 2007 video of co-sponsor Sen. Charles Grassley (R-Iowa) talking about how heavily lobbied it was. At 4:51, Stewart answers the question of who was fighting repeal: The Private Equity Council, started in 2007 by, among other firms, Bain Capital. He then plays a clip of Romney himself telling a TV reporter he "doesn't think it's a good idea to raise taxes" in response to a question about this bill.

What Stewart has laid bare for all to see, of course, is exactly how much influence Romney had on the laws that today he claims simply to be following. I'm shocked, shocked... Occupy Wall Street proven right once again.

* "As Romney Campaign Advances, Private Equity Becomes Part of the Debate," NYT, Jan. 11, 2012, p. A17, via Lexis-Nexis Academic.

Monday, January 23, 2012

New Reports Highlight Bad Companies, Variable State Subsidy Enforcement

In case you missed it, two reports came out last week highlighting two of my favorite topics, tax havens/tax avoidance and economic development. The first is "Representation Without Taxation," a report identifying the Dirty Thirty companies that paid more for lobbying than they did in taxes. The second is "Money Back Guarantees for Taxpayers," a study of state enforcement of subsidized companies' job commitments.

"Representation Without Taxation" was published by the U.S. Public Interest Research Group and Citizens for Tax Justice. It combines data on the taxes of the 280 Fortune 500 companies that were profitable in every year from 2008 through 2010 with what they spent on lobbying. Of the Dirty Thirty, they write:
These companies so deftly exploited carve outs and loopholes in the tax code that all but one of them enjoyed a negative tax rate over the three year period of the study, while spending nearly half a billion dollars to lobby Congress on issues including tax policy. Altogether they collected $10.6 billion in tax rebates from the federal government.

Ordinary American taxpayers and small businesses must pick up the tab when major corporations avoid their taxes. Spread out over every individual tax filer in America, the taxes avoided by the Dirty Thirty break down to an average of $481 per taxpayer over the three years.
Remember, this is just for 30 companies! On the list are well-known names like General Electric (a $4.7 billion refund on $10.5 billion in U.S. profits, $84 million in lobbying!), DuPont, Verizon, Boeing, Wells Fargo, and Mattel. At least 22 of the firms had subsidiaries in tax havens.

I disagree with the report's use of the term "tax subsidy" to describe the results of tax avoidance, but I wholeheartedly agree with its major recommendations to fight tax havens: end deferral of foreign profits, treat U.S.-controlled foreign subsidiaries as domestic for tax purposes, and reporting profits country by country rather than in consolidated fashion (Publish What You Pay).

Good Jobs First released "Money Back Guarantees for Taxpayers," a look at states' use of clawbacks against subsidized companies that fail to keep their job promises. The result was a "good news, bad news" pattern: On reporting job performance, the good news is that 90% of 238 programs studied require it, but the bad news is that in 78 cases there is no verification of the job numbers. On clawbacks, the good news is that 178 programs had penalties and another 41 were pay-for-performance (the subsidy is not paid until the jobs are created), but the bad news is that for 84 programs, the penalties can be waived.

I should note the recent trend by some companies to demand "no clawbacks" in their agreements, as for example in the recent case of Electrolux in Memphis.

The worst news is that states disclose very little of their enforcement action: For example, only 38 programs publish the names of companies that don't fulfill their job commitments, and a mere 14 programs publish information on which companies are penalized and how much.

Combining scores for what states require from subsidy recipients (from last month's Good Jobs First Report "Money for Something") with clawback scores, the states with the best programs are Vermont, North Carolina, and Nevada. The three worst are DC, Alaska, and North Dakota.

As you can see, we have plenty of work cut out for us in both of these issue areas. Both reports should find their way to your virtual library

Sunday, January 22, 2012

Feedburner Feeds Now Available

I've been doing some technical updating this weekend. As a result, you can now subscribe through Feedburner in your reader or via email. Apparently, there is now an option to redirect the existing subscriptions into the Feedburner feed. Please let me know in comments if you have any experience with this sort of thing and whether it's a good idea or not.

In addition, I have added a set of links to my most popular posts. Because for some reason Blogger Stats went down when I had "The Massachusetts Miracle" posted, it does not show up in proper #3 slot (according to my Google Analytics data). I guess that's technology...

I hope you enjoy these features!