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it will be interesting to watch NY (and/or CA) put something like this in place and observe from afar. i strongly feel that states should be much more aggressiv
by aserdf 4y ago
it will be interesting to watch NY (and/or CA) put something like this in place and observe from afar. i strongly feel that states should be much more aggressive running policy experiments if their constituents desire them, and at the national level we all get some benefit of seeing how things turn out in real time.
all that said, assuming there is some tangible tax increase, NYC high earners are going to be knocking on the door of 60% combined rates (city, state, federal). tax avoidance and/or relocation services are going to be booming if so.
- outside1234 4y agoRemember that this expense is also reducing the cost of employers. One of the best ways to finance this would be a payroll tax that is basically equal (in aggregate) to the insurance the company is (usually) already paying.
- lr4444lr 4y agoThere is nothing stopping NY employers now from just giving people enough cash to buy a plan on the ACA marketplace. You're assuming this upcoming plan will have offerings employees will want, and charges employers whether or not this is the case.
- endisneigh 4y agoIf you think employers will share the savings with their employees, think again.
- drm237 4y agoI don't think they're saying that at all. I think the point was, a payroll tax won't necessarily increase costs for a company because it would be offset by eliminating the current healthcare costs.
- endisneigh 4y agoRight, but my point is that to keep the relative advantage they’d have to pay. For example imagine a company attracts talent by paying median + healthcare, and another that just paid median. For the latter they would have more costs, no? The savings aren’t offset unless they were already offering the incentive.
- deleted 4y ago[deleted]
- jjoonathan 4y agoYes! The private-insurance-mimicing payroll tax is by far the best path. Nobody is going to believe that there are savings to be had, so it's best to start by reducing friction.
- sli 4y agoOnly because people are conditioned to only seek medical attention when it's absolutely necessary, because it's too expensive to be proactive even with insurance.
- lotsofpulp 4y agoBig employers like having health insurance tied to employment. It makes changing jobs a riskier maneuver for employees as they do not know the quality of the other jobs' insurance coverage, and it creates higher overhead costs for smaller employers so it provides a competitive advantage there too.
- nerdponx 4y ago> they do not know the quality of the other jobs' insurance coverage And the fact that you can't actually take time off of work to pursue a career change or look for a new job, because you need your job in order to be able to afford basic healthcare. Which makes it a lot harder to pursue a career change or look for a new job, because you are stuck/busy at your current one + whatever other life responsibilities you have (not to mention the really high commute times in NYC).
- maxerickson 4y agoI mean, they can lobby against it, but other than that, what does it matter that they don't like it? It's not like they are so management heavy that they can swing a vote.
- mupuff1234 4y agoThey won't have much of an option. I don't see them closing up shop and leaving NY if the talent is there.
- ipaddr 4y agoI do, the talent exists elsewhere cheaper
- countvonbalzac 4y agoNo it doesn't. If it did, they would already hire those people and get rid of their more expensive talent.
- 4y ago
- adolph 4y ago> a payroll tax that is basically equal (in aggregate) to the insurance Whereupon there is no reduction in cost to any employer. Theoretically there could be a reduction because the state would be a larger pool of cross-subsidization than any particular employer. In reality the costs are worse since the state will use the taxes to subsidize non-employed persons.
- zjaffee 4y agoNY should pay for single payer in part by raising real estate taxes, it's the only clear way the state has to avoid capital flight in the way you're describing here. This said, a big thing NY benefits from is that a lot of people work in NY state temporarily as consultants in addition to the bridge and tunnel crowd that come in from NJ and CT, this gives them a much larger tax base than the population living there brings in on its own.
- hersko 4y agoI live in NY and pay >$18k a year in property tax for a small house. Real estate taxes are high enough.
- kevin_thibedeau 4y agoThey are offensively low for multi-million dollar buildings in NYC. Cut some slack for owner occupiers who had the assessed value skyrocket on them. Tax everybody else fairly.
- bradleyjg 4y agoA part of the reason is idiotic programs like 421a
- nradov 4y ago"Fair" is highly subjective and no one can agree on what that means. Most of us think the fair option is to raise other people's taxes.
- PaulDavisThe1st 4y ago"most of us" don't understand the basic concept of marginal tax rates, and "most of us" don't understand the idea of marginal utility. "most of us" have in some form or another been doused in a firehose of "the only good tax rate is a lower tax rate" propaganda generated over (at least) the last 40 years. For a long time, the USA (like many other post-industrial revolution countries) has accepted that "fair" means using progressive taxation to try to create roughly equal impact given the marginal utility of higher levels of income. It's not incredibly scientific, but it isn't really incredibly subjective either. Conservatives and their cousins at some level more or less reject the concept that there is any fair level of taxation at all, and if there is, they lean toward equal numerical taxes for every dollar earned (or taxed), thus rejecting marginal utility theory entirely. There are at least a couple of high-net-worth-admission lobbying groups that have asked Congress to raise rates on people like themselves (which inevitably will impact other people like themselves). And speaking for myself, I believe that I should pay more in taxes.
- debacle 4y agoNew York is losing population at a breakneck pace. Our government is to blame. I am for single payer to some extent, but if done poorly medical staff (who are already leaving due to pandemic policies) will just pick up and leave. We recently expanded the privileges of nurse practitioners which is great, but two large nursing unions are less than 60 days away from striking.
- joshstrange 4y agoCitation needed. Every population graph I can find show a small decline over the last few years but it's still above 2000 and they've had population dips before (1970-1980) that then recovered. This comment reads like my in-laws who always talk about how "people can't get out of CA fast enough", um the population numbers say otherwise.
- pirate787 4y ago"A smaller Empire State: New York continues to lead nation in population decline" https://www.democratandchronicle.com/story/news/politics/albany/2021/12/21/new-york-population-decline/8981869002/ https://www.democratandchronicle.com/story/news/politics/alb... The population flight is primarily for US-born residents, which is what happened in CA as well.
- q1w2 4y agoOne of the main errors that people miss is that the people leaving California and New York are the people making money and paying tax revenues. Covid CRUSHED NYC tax revenues - and many people have still not returned.
- jliptzin 4y agoFrom the article: "Most of New York's population decline has been upstate."
- timtom39 4y agoCA is losing population: https://www.sfchronicle.com/bayarea/article/Bay-Area-counties-helped-drive-California-s-17142106.php https://www.sfchronicle.com/bayarea/article/Bay-Area-countie... It isn't crazy fast but it is happening. We will see if the trend holds...
- beebmam 4y agoThat's 60% marginal rates. Last year I paid 17% of my total income in taxes.
- ch4s3 4y ago> Last year I paid 17% of my total income in taxes. Was that in NYS? It doesn't take a lot of income to hit the state rate of 6.33%, everything after $80,651 filing alone, which isn't unusual downstate. You can add roughly 3.8% to that if you live in NYC and another 22% Federally, all just on income.
- deleted 4y ago[deleted]
- revnode 4y agoYou paid much more than that. A substantial part of your rent is property taxes. I also doubt you included sales taxes in that number. Then there's more esoteric stuff like tariffs, etc
- countvonbalzac 4y agoRent is not tax, what an absurd comment.
- NovemberWhiskey 4y agoIf you're renting, your landlord is paying property tax and passing it on to you.
- kevin_thibedeau 4y agoSome states let you deduct a portion of rent in place of property tax.
- jonathankoren 4y agoBy that logic, no one pays taxes except consumers.
- johnsanders 4y agoOne of America's best ideas. Laboratories of democracy. Maybe it works.. maybe not. But the rest of us learn from whatever happens.
- gnopgnip 4y agoNY currently greatly restricts how health insurers can discriminate on price based on age to the point that age basically isn't a factor. But most states allow for a ~3x price difference based on age. The other state with a similar rule, Vermont, has a form of single payer insurance as well
- nradov 4y agoIt's the federal Affordable Care Act (Obamacare) that limits price discrimination based on age to 3×. A few states do compress that even further. https://www.valuepenguin.com/how-age-affects-health-insurance-costs https://www.valuepenguin.com/how-age-affects-health-insuranc...
- q1w2 4y ago"Single payer" is just another word for Monopoly. It's insane anyone thinks this is a good idea. Just Google "quebec/canada healthcare crisis"
- Vladimof 4y ago4 states would be about 1/3 of all of USA's population too...
- oneoff786 4y agoIsn’t this sort of guaranteed to fail? High earners already have great insurance from employers. There’s not likely to be a mechanism to get those benefits back as dollars like you would expect in a national scale steady state system.
- kmonsen 4y agoThe VOX in the weeds healthcare people looked at it some time ago, and most healthcare economists thinks it is not possible for states to do something here.
- buescher 4y agoSomehow they have private insurance in Europe too. Germany has universal health care and you are well advised to get private insurance if you make enough that the state will allow you to buy it. The threshold is a salary of about $68K/year in US dollars.
- oneoff786 4y agoThat’s not what I’m saying. The norm is that a fairly substantial part of your comp in the US is healthcare provided by your employer. If this suddenly becomes worthless (or rather much less valuable because there’s a single payer system in parallel) but your salary stays the same while your taxes go up, you will lose out big time. It could work just fine if everyone did it. But seems very hard to do just Ny.
- maxerickson 4y agoThe notional value of insurance isn't impossibly high and it would likely loosen up the job market if switching was not complicated by continuing coverage and the risk of not replacing a good benefit.
- oneoff786 4y agoSure. But is that achievable over a short period when the experiment is New York only and you’re a large national company? Not convinced.
- astura 4y agoWhere does 60% come from? I used this calculator - https://smartasset.com/taxes/income-taxes https://smartasset.com/taxes/income-taxes It said if I (married) made $675,745/year in Manhattan I'd pay 39.59% of my income in taxes.
- aserdf 4y agoim adding marginal rates which is somewhat lazy. assuming 1,080,000 as a single earner (married changes the calculation of course): - 37% federal - 9.65% state - 3.876% city tax - 3% SS and medicare - ?? disability, unemployment, etc. - some additional % to cover single payer so thats somewhere in the mid 50% range adding up. again, effective rates won't be that exact number except for ultra high earners. this also doesn't include property tax or sales tax (8.875%). crocodile tears for million dollar earners and their tax bills of course, my point being that chasing away a small amount of residents can have an outsized effect on state revenue. (0.3% of returns account for 27% of revenue federally)
- kmonsen 4y agoThis came up in the VOX in the weeds on healthcare policy some time ago. Their conclusion from the people that had looked into it is that it is sort of impossible for states to do this. Can't really remember the reasons. There was another state that was trying something like this, I believe it was Vermont.
- 7speter 4y agoI'm guessing the economy of scale for such a buy in isn't enough, and that states would have to take out as much debt as their yearly budgets or even more. Even a Elizabeth Warren's proposed solution was something like 17x the federal budget.
- nradov 4y agoStates wouldn't be able to borrow on anything like that scale to fund a healthcare program. Any major increases in healthcare spending would have to be funded by huge tax increases.
- unclenoriega 4y ago> increases in healthcare spending FWIW, New York's current Medicaid budget alone puts it between San Marino and Israel for per capita healthcare spending. Widening the net a bit, that's between Italy and the UK.
- refurb 4y agoNYS has a bigger population than all of Canada which seems to do make universal healthcare work.
- tekknik 4y agoThere’s comments above that explains it “working”. Here’s a site that explains it better. TLDR, taxes go up a lot, private spending for medical procedures slightly falls. Quality of care drops. Pretty well a losing proposition all the way around. https://www.heritage.org/health-care-reform/report/how-socialized-medicine-hurts-canadians-and-leaves-them-worse-financially https://www.heritage.org/health-care-reform/report/how-socia...
- bawolff 4y agoThis is how it worked in canada. Saskatchewan decided they wanted single payer health care so they did it. About a decade later the federal gov made it national.
- q1w2 4y ago...and why combined tax rates for the middle class are around 50%. As someone who's lived in the Canadian health care system and the US system - it is absolutely lower quality than what average private employer healthcare plan provides in the US. Even before covid, Quebec's healthcare system was in crisis with packed ERs having dozens of neglected patients on beds in the hallways for weeks... GP access is impossible with waiting lists 3 years long. ...and the nursing shortage was bad before - now because covid caused the government to order nurses to do forced overtime. Americans have rose-colored glasses when they think about the quality of care in Canada. The truth is that Canadian healthcare is better for people that cannot afford healthcare. ...and American healthcare is far better for the average person that is employed with those benefits. It's a simple tradeoff. Significantly higher taxes + healthcare for the poor (Canada) vs better healthcare for the average middle-class employed person (US).
- unclenoriega 4y agoThe US already spends more than double what Canada spends per capita. If we had the cost efficiency of Canada's health care system, we could by double the health care without spending more than we already do.
- tekknik 4y agoThe US spends more because our care is higher quality. If you want to see a specialist for instance, the top of their fields will be here because they can charge what they’re worth.
- bawolff 4y ago> ...and why combined tax rates for the middle class are around 50%. I think you are confusing middle class and 1%. Stats canada says middle class is $45,000 to $120,000. That is a marginal tax rate of about 30% depending on what province and where in that range you fall (quebec is closer to 40%). https://www.mackenzieinvestments.com/en/services/tax-and-estate-planning/tax-rates https://www.mackenzieinvestments.com/en/services/tax-and-est...
- wolverine876 4y ago> NYC high earners are going to be knocking on the door of 60% combined rates (city, state, federal). tax avoidance and/or relocation services are going to be booming if so. It turns out that people don't often move over taxes, despite the claims of the anti-tax crowd, or NY and CA would have been emptied out long ago. Taxes are investment; we need to start calling them 'low-investment' and 'high-investment' states (but the liberal crowd is blind to the power of messaging and perception). People like the services and the community that investment creates, such a health care and arts. Also, they can subtract their health insurance costs, and you are only talking about income taxes, while most taxes are either fixed rate for benefits (e.g., Social Security) or, for the wealthy, capital gains.
- simulate-me 4y agoThis is anecdotal, but I know multiple people who have moved to Washington and Texas from NY and CA specifically to save on taxes from large stock grants at tech companies. I don’t think this is a unique experience in the tech industry. At a large public company I worked for, an entire team ended up moving.
- wolverine876 4y agoI don't know those people and of course can't judge anyone else but me. Generally, the trendy focus on taxes is absurdity. They are making all that money, and are uprooting their lives and family, not to mention the other benefits of living in world cultural and technology capital (which isn't coincidental to the taxes and resulting community investment), to save on taxes? I hope they see that some things are more important in life.
- simulate-me 4y agoSeattle and Austin are totally comparable, even preferable, to NYC and SF in many ways. So yes, all else equal, why not save an extra 10% of your income?
- 4y ago
- shrimpx 4y agoI think if states become more heterogenous (and SCOTUS seems to be on that wavelength) the idea is "if you don't like the new laws, relocate". Which sounds great; more diversity of laws, more states that are likely to fit my values more closely. But this impacts poor people disproportionately. If you're poor it'll be hard or impossible to relocate.
- PaulDavisThe1st 4y agoIt also impacts people who consider themselves something other than "rootless cosmopolitans". I do happen to proudly put myself in the rootless cosmopolitan category, but I've had some interesting interactions (even here on HN) with people for whom community, place, family ties, family history etc. are much more important than they are to someone like me. "Relocate" is a particularly jarring edict for such folk.
- shrimpx 4y agoI agree. I currently live in a small city where locals take a lot of pride in their families having been here for generations.
- throwaway2a1av 4y agoif you live in NYC as a high earner, you already have some of the highest tax rates in the country. A lot of people who are high earners in NYC make their money through w2 income, so there's no way to avoid paying ~50% in taxes. Anecdotally, I know so many people in this >1M "high earning" bracket who have moved out of NYC to Austin/Miami/Tampa/Seattle in the last couple of years. Especially now that remote work is a viable choice at many companies. Every year you're saving somewhere between 8-10% in taxes, which is upwards of 100k/year. Whatever your stance on higher taxes for the wealthy are, as long as viable alternative locations exist in the USA where there is such a massive discrepancy in the taxes, you're not going to be able to raise more revenue in NYS/NYC by simply raising the marginal tax rate for the highest earners. If they actually increased taxes to fund this, I highly doubt they will be able to raise additional revenue, and the primary effect will be driving up home prices even further in the tax-free cities above
- 1270018080 4y agoYeah. If a European country who is poorer than NY with a population of 20 million can fund universal healthcare, NY should be able to also.
- polski-g 4y agoEuropean countries ration care. America does not. Until we're willing to, health care costs will remain astronomical.