How the manipulation of the tax code broke healthcare in the US.

9 Replies to “How the manipulation of the tax code broke healthcare in the US.”

1. Thanks for explaining the origin of employer funded health insurance in the US. Employer paid benefits and tax-deductible interest payments on mortgages have significantly distorted and nearly destroyed the US economy. Whatever is tax-deductible for the employer should also be tax-deductible for the individual and for the self-employed.

2. Finally, people are beginning to recognize that it is not the free market that has been breaking the free market, but rather government that has been breaking the free market through their ridiculous policies. No one cares about prices going up when they don’t have to actually pay for things! When people are not faced with the cost of their healthcare, they are indifferent to the cost of their healthcare!

3. That headline is wrong, though.
   It’s Congress that did that; the IRS just enforces the tax code, it doesn’t make it, or the perverse incentives written into it.

4. Sigivald: Great point. Let’s make it, How manipulating the tax code killed heath care. Anytime the gov’t tries to influence social policy through tax incentives, there is a huge problem.

5. Kyla ;
   Very true.
   The same process happens when the State makes buisness decisions mandatory. Creates monopolies, for Statist government bureaucrats to perpetuate the growth of the Political Class.
   JMO

6. Walter, unfortunately in order to remove mortgage interest tax deductibility(is that a word?), one would have to remove any and all taxes on selling personal real estate. I just don’t see that happening down there.
   I think Canada’s system is better, no interest deduction, but “profits” on the sale of your shelter is also not taxable.

7. I have a cousin who is/was a mortgage broker in California. Several years ago he stated that our system wrt mortgage interest vs capital gains was a superior system. He yearned to see it in place.

8. Kyla, great piece. This kind of stuff doesn’t get talked about enough. What a great example of central planning and its results.

9. I’d go a step further and eliminate all deductions and implement a flat tax of around 15% with perhaps another rate, say 20% for income over 100k. With the lowest 40% of all US income earners currently paying no federal taxes, just like employer paid health insurance, they have no skin in the game and voting correctly benefits them more than work. Eliminating corporate income tax would be icing on the cake, forcing hundreds of thousands of accountants and lawyers to finding productive work.