NCPA - National Center for Policy Analysis
NCPA - National Center for Policy Analysis
Barry is a Senior Economist with the National Center for Policy Analysis, one of the most influential think tanks in America today.

The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, Social Security, welfare, criminal justice, education and environmental regulation.

NCPA Motto - Making Ideas Change the World - reflects the belief that ideas have enormous power to change the course of human events. The NCPA seeks to unleash the power of ideas for positive change by identifying, encouraging, and aggressively marketing the best scholarly research.

Daily Policy Digest

Provided courtesy of: NCPA

Daily Policy Digest

Hillary's Tax Plan Will Cost Everybody, Not Just the Rich
25 Aug 2016 07:00:58 CDT -

Presidential candidate Hillary Clinton has proposed a number of changes to the income tax code, targeted mainly at high-income earners. The tax changes would have little impact on 90 percent of the population in terms of tax liability.  However, households in the top ten percent of the income distribution, who currently pay 53 percent of all federal taxes, would pay 80 percent of the additional tax collected. 

What would affect other income deciles is the fall in income due to recessionary effects of the income tax hikes. Our dynamic analysis shows:

  • The top 10 percent of earners would lose nearly 2 percent of broadly measured income in 2017 alone.
  • This is not surprising considering Hillary's motive for taxing the rich, but what is particularly startling is that incomes in all other deciles except for one would also fall.
  • In fact, the poorest 10 percent would lose 0.7 percent of their broadly measured income. This is the largest loss among the bottom 90 percent of deciles! 

In the NCPA's distributional analysis, broadly measured income includes adjusted gross income and then adds some tax-exempt sources of income, and employer contributions to health insurance, among other adjustments. We divide this by the square root of the number of household members to arrive at a measure of broad income per adult equivalent, and then divide the individuals in our dataset into ten equal-sized deciles based on this measure.

  • By this measure, those in the top 10 percent of earners receive 37.3 percent of all income (per adult equivalent), but pay 52.7 percent of all federal taxes.
  • The bottom half of the population accounts for 18.3 percent of all broad income per adult equivalent, but pays just 7.5 percent of federal taxes.

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For more on Tax and Spending Issues:

How New Cold World Order Threatens Humanity
24 Aug 2016 07:00:57 CDT -

NCPA Senior Fellow David Grantham writes for Townhall:

By now you have seen the heart-wrenching video of a 5-year old Syrian child pulled from the rubble of a house destroyed during another indiscriminate bombing campaign over the city of Aleppo. No tears. No wailing. He sits there unflinching, caked in soot and a face half-covered in blood from a nasty gash atop his head.

It's hard to stomach as a human. Nearly unwatchable as a father.

While many remain deeply divided over how America should respond to the growing number of atrocities, the same audience seethes at knowing this evil is up against a routinely unprepared and seemingly impotent U.S. administration. The greater concentration of power in the hands of those cold to human suffering may bring the world to a humanitarian tipping point.

The tyrannical cooperation between Iran and Russia, and now perhaps Turkey, is shaping up to Biblical proportions. The dictatorial instincts of those invested in this three-way marriage of convenience and their collective disregard for innocent life when it stands in the way of their insatiable thirst for power serves to affirm the United States as the last great hope for human flourishing. Warts and all, America still stands as the counterweight to the inevitable despotism that overwhelms the world in its absence.

Yet, this critical moment in international history elicits little more than a soundbite from the current administration while it passes from the fairway to the green. World leaders are now disinclined to consult the United States. Instead, they begrudgingly phone Putin, believing him to be the de-facto maestro of world events. 

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For more on International Issues:

The Economic Effects of the Clinton Tax Proposal
23 Aug 2016 07:00:56 CDT -

Compared with other presidential election year cycles, the 2016 campaign takes place in a period of perplexingly slow economic growth. Secretary Hillary Clinton''s tax proposal, the center of her campaign's fiscal policy, stresses fairness. To reach "broadly shared prosperity," in this slow-growth environment, the Clinton tax proposals seek to promote growth and equity by shifting the tax burden to high-income taxpayers. The proposals are clearly predicated on a normative objective to diminish income inequality and to bring greater equity to the tax code. In this report, we focus on the efficiency effects of the Clinton tax proposal, leaving the debate over equity for a separate analysis of distributional effects (Haughton et al. 2016).

The Clinton plan would increase federal revenue by $615 billion over 10 years, with personal income taxes comprising $548 billion of that amount. Over the same period, estate and gift taxes would increase by $75 billion. On the corporate tax front, the Clinton plan would reduce tax subsidies to the oil and gas industry, which would collect an additional $43 billion over a decade. 

The NCPA-DCGE model finds that the higher tax rates would negatively affect the tax base for Social Security taxes, excise taxes, trade duties and other taxes and fees. As a result, revenues from these taxes would decrease by $51.5 billion over the ten-year period (Table ES-1). In total, the Clinton tax proposals would increase federal revenue by $54.1 billion in 2017, increase revenues by $70.5 billion in 2026, and increase revenues by $615 billion over the ten-year period. State and local taxes would decrease by $78 billion over the same period.

These tax increases will set off changes in taxpayer behavior. While the public sector stands to gain under the Clinton plan (a boost of 54,000 jobs), the private sector would have 265,000 fewer jobs by 2026. According to the model, Real GDP in 2026 would be 0.9% lower than in the CBO benchmark projection. The higher tax rates would likely reduce economic growth relative to its current sluggish trend, while at the same time leading to a modest reduction in inequality.

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Hillary Clinton's Tax Plan under the NCPA's Model of the U.S. Economy
22 Aug 2016 07:00:55 CDT -

Presidential candidate Hillary Clinton's tax plan would increase public sector jobs by 49,000 in 2017, but they would come at a cost of 207,000 private sector jobs, according to an analysis by the National Center for Policy Analysis.  In 2026, the public sector would gain 54,000 jobs, but 265,000 private sector jobs would be lost.  In essence, every government job created by Hillary would eventually cost nearly 5 private sector jobs.  Her plan would have other recessionary effects on the economy, such as:

  • In the first year, real GDP would be more than half a percent less than under the Congressional Budget Office's current baseline estimate and almost 1 percent less in 2026.
  • Personal income would be $47 billion less in 2017 alone; this loss would increase to $103 billion in 2026.
  • Business investment would be 0.7 percent less in 2017, increasing to a more than 1 percent loss in 2026.

This analysis is based on results from the NCPA's modeling of the U.S. economy, in partnership with Dr. David Tuerck and his team at the Beacon Hill Institute in Boston, Massachusetts.  

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The Administration Believes Obamacare's Costs Went Down!
19 Aug 2016 07:00:54 CDT -

Senior Fellow John R. Graham writes in NCPA's Health Blog:

The Centers for Medicare & Medicaid Services (CMS) has just made the remarkable claim that medical costs paid by health insurers operating in Obamacare's exchanges declined in 2015 from 2014:

Per-enrollee costs in the ACA individual market were essentially unchanged between 2014 and 2015. Specifically, after making comparability adjustments described below, per-member-per month (PMPM) paid claims in the ACA individual market fell by 0.1 percent from 2014 to 2015. For comparison, per-enrollee costs in the broader health insurance market grew by at least 3 percent.

The report compares apples to oranges. When discussing the change in costs in the exchange, it estimates medical claims. When discussing changes in employer-sponsored health insurance, it estimates premiums (which increased 3 percent). The average Obamacare premium increased 5.2 percent in 2015, more than employer-sponsored coverage. (See note below.)

If health insurers increased their premiums by 5.2 percent, but the claims they paid out decreased by 0.1 percent, they would be jumping for joy, having mastered Obamacare's risks beyond their wildest dreams! They would have competed hotly for market share in 2016, likely cutting premiums.

Needless to say, that is not what happened. In 2016, the average premium increase was eight percent. And insurers still have not mastered Obamacare's risk. Insurers are bailing out of the exchanges, and the prospective annual premium increase for 2017 will be 16 percent.

How did the Administration come to its remarkable conclusion?

This analysis draws on data collected by CMS to administer the ACA's transitional reinsurance and risk adjustment programs. To operationalize these programs, CMS implemented a distributed data approach through External Data Gathering Environment or "EDGE" servers.

The folks at CMS need to have a serious talk with the contractor which operates the EDGE servers, because this analysis is exceedingly hard to accept.

Note: After 2015 open enrollment was completed, ASPE Office of Health Policy reported an average monthly premium of $364 in the 37 states using (Issue Brief, March 10, 2015, page 15). In 2014, it had been $346 (Issue Brief, June 18, 2014, page 6). That is an increase of 5.2 percent.

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Do You Have A "Right to Shop" For Health Care?
18 Aug 2016 07:00:53 CDT -

Senior Fellow John R. Graham writes in NCPA's Health Blog:

Anyone who has undergone a medical procedure knows it is very difficult to figure out how much an insured patient will pay out-of-pocket. It is often not clarified for months after the procedure, after a flurry of incomprehensible paperwork from insurers, doctors, labs, et cetera, has landed in the patient's mailbox.

(Personal aside: A couple of years ago, my health insurer encouraged me to go paperless, and I signed up for electronic messages about claims. It was so confusing, I went back to paper after a few months. At least you can scrunch up a letter and throw it across the room with an anguished scream, which you don't want to do with your computer.)

This problem has led to a bunch of state laws attempting to impose "price transparency" on medical providers. As discussed previously, they do not work, because relationships between insurers and providers inhibit transparency. Medical providers "customers" are insurers, which pay most of their claims, not patients. Further, the real problem with medical prices is not that they are opaque, but that they are not formed in a normal market process. Instead, they are negotiated by third-party bureaucracies.

"Right to Shop," a proposal developed and championed by the Foundation for Government Accountability, takes another approach to the problem. As described in Forbes by Josh Archambault, the Right to Shop is pretty straightforward. State law would require medical providers to give good faith estimates of charges for procedures. Insurers and in-network providers would be required to share their negotiated charges with patients. If a patient gets a procedure at lower cost than the negotiated charge, the insurers must share some of the savings with the patient.

Mr. Archambault reports Right to Shop has already succeeded in New Hampshire, where Anthem Blue Cross implemented it for state employees. In 2015, it saved a total of $12 million, of which one million dollars was paid out to patients. It is not clear who benefitted from the $11 million balance. It would be good to know how much went to taxpayers and how much to the insurer! Nevertheless, it is a step in the right direction.

Right to Shop would impose some reporting and compliance burden on both insurers and providers, which is difficult to endorse. Further, it is easy to underestimate insurers' and medical providers' commitment to the status quo, which benefits them because it causes above-market prices. They will be very committed to undermining the Right to Shop.

On the other hand, because it is an initiative among the states, the law can be tweaked and it will be easier to learn how to improve it than if it is imposed nationally. Right to Shop will not fix everything in our overly expensive health system, but it is a positive proposal that would have an impact in the right direction.

For more on Health Issues:

Health Policy Digest

Provided courtesy of: NCPA

Consumer Driven Health Care

Health Care Reform Tax Will Hurt Franchisees
04 Oct 2011 12:43:58 GMT - When the employer mandates go into effect in 2014, many franchised businesses will be motivated to reduce the number of locations and move workers from full-time to part-time status...


Saving Jobs from Health Reform's Harmful Regulations
04 Oct 2011 12:43:58 GMT - If the rate of health care cost growth had not exceeded general inflation, a typical family would have had $545 more per month in spendable income instead of $95 -- a difference of $5,400 per year...


Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
04 Oct 2011 12:43:58 GMT - Gaining health insurance and using more primary care services leads to more hospitalizations as a result of physicians' discretionary decisions regarding aggressive and intensive treatment...


The Case for Competition in Medicare
04 Oct 2011 12:43:58 GMT - A well-functioning marketplace would set in motion the forces needed to transform American medical care into a model of efficient patient-centered care...


Potential Effect of Health Care Reform on Emergency Department Utilization Not Clear
04 Oct 2011 12:43:58 GMT - In 2010, 71 percent of emergency physicians said that they expected emergency department visits to increase due to the implementation of the Affordable Care Act...


Related Information:
NCPA - National Center for Policy Analysis Web Site

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