thefiscaltimes--2020-01-03--The IRS Tried to Crack Down on Rich People Using an 'Abusive' Tax Deduction. It Hasn’t Gone So Well

In March 2019 , the IRS added a scheme to its annual “ Dirty Dozen ” list of “ the worst of the worst tax scams.
” That same scheme was targeted , just weeks earlier , when the U.S. Department of Justice filed a fraud lawsuit against a handful of promoters allegedly responsible for generating more than $ 2 billion in improper tax write-offs .
And the Senate Finance Committee has been investigating that very same racket , recently demanding thousands of pages of documents from six promoters .
Lawmakers from both parties have introduced legislation to halt the @ @ @ @ @ @ @ re all trying to kill is what ’ s called a “ syndicated conservation easement , ” which the IRS calls “ abusive ” and says has resulted in bogus deductions for the rich that have cost the U.S. Treasury billions in revenues .
A conservation easement , in its original , legitimate form , is granted when a landowner permanently protects pristine land from development .
In that scenario , the public enjoys the benefit of undeveloped land and the taxpayer gets a charitable deduction .
By contrast , the syndicated form @ @ @ @ @ @ @ known as “ promoters , ” involves buying up land , finding an appraiser willing to declare that it has huge development value and thus is worth many times the purchase price , then selling stakes in the deal to wealthy investors who extract tax deductions that are often five or more times what they put in .
( ProPublica investigated syndicated easements in the 2017 article “ The Billion-Dollar Loophole.
” ) But the multifront crackdown seems to be having , at best , a limited effect .
There were signs that @ @ @ @ @ @ @ , according to an IRS letter to Congress in July 2018 that cited incomplete data ; that ’ s the most recent official statement from the agency , which declined to comment for this article .
And some entities doing syndicated projects have seen their business drop or have even left the field .
But IRS commissioner Chuck Rettig offered a different picture to the Senate Finance Committee this spring .
“ Syndicated transactions have absolutely not declined , ” he testified .
“ They ’ re still there.
” In November , @ @ @ @ @ @ @ launch of criminal investigations — in the agency ’ s attempts to stymie syndicated easements .
“ We will not stop in our pursuit of everyone involved in the creation , marketing , promotion and wrongful acquisition of artificial , highly inflated deductions based on these aggressive transactions , ” he said in a statement at the time .
Three IRS divisions are now conducting coordinated examinations of syndication deals after identifying 125 “ high-risk cases , ” and outside contractors have been hired to assist with the investigative load .
More than @ @ @ @ @ @ @ against partnerships that used the syndicated easement deduction .
The imperviousness of the scam ’ s promoters and investors has left tax experts flummoxed .
“ Boy , it isn ’ t like the old days , when people were fearful of the IRS , ” said Steven Miller , who oversaw enforcement and tax-exempt organizations during his 25 years at the IRS and is now national tax director with consulting firm Alliantgroup .
“ I ’ m worried people aren ’ t afraid of the cop on the beat any more.
” @ @ @ @ @ @ @ .
“ I thought by now they would have put these guys out of business , ” said former agency commissioner John Koskinen , who took steps against syndicated easements before he left in late 2017 .
“ Obviously , if you can get four to seven times your investment back in deductions , that ’ s a good deal .
But you really have to have a lot of chutzpah to pull it off.
” Some promoters continue to flaunt their sales pitches .
In November , for example , an Alabama @ @ @ @ @ @ @ the Justice Department ) solicited high net-worth clients with an ad in Barron ’ s , promising , in capital letters , “ TAX DEDUCTIONS AVAILABLE THROUGH CONSERVATION EASEMENTS…100,000 INVESTED YIELDS UP TO 600,000 IN DEDUCTIONS.
” And sizable deals are still being struck , including by an Atlanta firm called EcoVest Capital , a chief target of the Justice Department lawsuit .
According to a private placement memorandum dated Oct. 24 , which was obtained by ProPublica , EcoVest was planning as many as three new syndicated deals on 1,549 acres in @ @ @ @ @ @ @ , touting a deduction of $ 4.10 for every $ 1 invested , was completed by year-end .
( The Justice Department suit , which is still in its early stage , asserted that EcoVest has been involved in 51 syndication easement deals since 2009 , generating $ 1.7 billion in federal tax deductions . )
On their face , the risk disclosures to potential investors in a syndicated deal seem daunting .
For example , the private placement memo for EcoVest ’ s Texas offering warned of a “ very high likelihood @ @ @ @ @ @ @ will be audited by the IRS.
” But experts cite several reasons for the stubborn survival of this tax-avoidance scheme .
The first is that the IRS , which Congress has starved for funding , chiefly wields its clout through individual audits and tax court cases , which invariably take years .
And even the dozens of tax court cases the IRS is pursuing target only a fraction of syndicated deals .
More important , the syndicated deals are structured in a way that insulate the wealthy individual investors , leaving the promoters @ @ @ @ @ @ @ the IRS .
Their fight is fueled with “ audit reserves ” of as much as $ 1 million that are set aside as part of every syndication partnership .
Some deals even offer “ audit insurance ” from Lloyds of London to offset disallowed write-offs .
“ The way the structure works is pretty buttoned up , ” Miller said .
“ The investor sits there and doesn ’ t see immediate pain .
You ’ re not going to be bothered by the IRS at the front end .
Some of @ @ @ @ @ @ @ me do the math .
What ’ s the likelihood of that 40 % penalty ?
’ That ’ s the calculation people are making.
” Miller believes the deterrent effect will kick in only if more cases personally target individual promoters and deal consultants with tough penalties and professional sanctions .
“ Ultimately , ” he said , “ they need to crush a few appraisers like a grape.
” The “ linchpin ” of the syndicated easements , Miller said , is the inflated appraisal .
“ How do I buy @ @ @ @ @ @ @ everything I buy is truly worth $ 10 ?
That belies rational thought .
You just scratch your head.
” Here ’ s how the appraisal worked in one syndicated deal described in the Justice Department complaint .
In 2015 , an EcoVest entity acquired 28 acres in North Myrtle Beach , South Carolina , for $ 1.1 million .
The firm raised about $ 9 million from investors who bought the property , then made an easement donation based on a claimed value for what the land would be worth if developed @ @ @ @ @ @ @ , made by an appraiser hired by the promoters , produced a tax deduction of about $ 39.7 million .
The tax writeoff for investors : $ 4.12 for every $ 1 invested .
In a written response to ProPublica ’ s questions , an EcoVest spokesperson called the government ’ s charges “ baseless ” and insisted that “ none of the appraisals associated with EcoVest sponsored investments are abusive or fraudulent.
” One appraiser regularly retained by EcoVest and other syndicators also looms large in the Justice Department suit : Claud @ @ @ @ @ @ @ , Alabama .
The complaint notes his involvement in at least 58 syndicated easement deals and alleges that Clark , 66 , “ continually and repeatedly ” generated “ grossly overvalued appraisals.
” In January 2019 , the Alabama state real estate appraiser board brought a formal complaint against Clark , after a detailed review of one of his easement appraisals found an inflated valuation riddled with errors and omissions .
Threatened with loss of his Alabama license , Clark voluntarily surrendered it in April instead .
He faces a second complaint filed @ @ @ @ @ @ @ a 2018 appraisal he did for syndicators in Jefferson Davis Parish .
EcoVest has continued to use Clark .
Its October private placement memorandum , which raised $ 19.3 million from investors , did not disclose that he had surrendered his appraisal license in his home state .
( A spokesperson for EcoVest said Clark ’ s relinquishment of his Alabama license wasn ’ t disclosed “ because , under securities laws , it was not material to whether Mr. Clark was authorized to issue an appraisal in Texas — a state with @ @ @ @ @ @ @ practices.
” ) Clark did not respond to requests for comment .
On Christmas Eve , however , his attorneys filed a 130-page response and counterclaim to the Justice Department complaint , denying any inflated appraisals and accusing government officials , including the IRS commissioner , Rettig , of making “ unlawful disclosures ” of appraisal information from his tax returns in public statements about the litigation .
Promoters of syndicated conservation easements have long been at war with the supporters of traditional easements , who worry that abusive deals will prompt Congress @ @ @ @ @ @ @ The traditional conservation community , embodied by the Land Trust Alliance , the Washington , D.C. , association of nonprofit land trusts , began pressing the IRS to crack down nearly a decade ago .
( Land trusts are a key part of the process : The rules for conservation easements require that any property donated to seek an easement deduction must be accepted and maintained by a land trust or government entity . )
The Land Trust Alliance later refused to accredit any trust accepting syndicated deals .
The IRS ’ attempt @ @ @ @ @ @ @ back to December 2016 , when the agency took the rare step of designating profit-making syndicated easements as abusive “ listed ” transactions .
The IRS demanded special paperwork identifying everyone involved in such deals — from promoters and tax advisers to appraisers and investors — and warned that continued involvement would brand them for investigations and audits .
The agency next took its campaign to tax court , after refusing to back down on dozens of audits rejecting the fat write-offs and demanding back taxes , interest and penalties of up to @ @ @ @ @ @ @ stake , promoters have fought back fiercely .
In 2016 , they formed a Washington , D.C.-based advocacy group , called Partnership for Conservation , which has spent more than $ 3 million to date on lobbyists .
EcoVest has spent another $ 2.5 million .
The Partnership for Conservation defends the legitimacy of syndicated deals , arguing that the profit motive produces “ tremendous opportunities ” for conservation , according to Robert Ramsay , executive director of the organization .
He said that the IRS should limit enforcement to cases of appraisal @ @ @ @ @ @ @ rare .
“ You have to stop with the premise that all of these are egregious and over the top , ” Ramsay said .
“ I don ’ t think that ’ s the case.
” Among the syndicators ’ most fervent supporters is Robert Keller , a conservation biologist who runs the Atlantic Coast Conservancy , a land trust in Jasper , Georgia , and has accepted more syndicated easements than anyone .
Keller acknowledged in an interview that his business has slowed , declining from 56 easements in 2017 to @ @ @ @ @ @ @ is itself now also under IRS audit for 2014 through 2016 .
( One of the reasons for the decline in volume for Keller : Atlanta-based Ornstein-Schuler , among the most prolific syndicated-easement promoters , announced last January that it was abandoning the business , citing “ recent developments and the uncertainty related to the conservation and gifting of property.
” ) Keller ’ s land trust displays the slogan “ Saving the world — One small piece at a time.
” He is unapologetic about accepting syndicated easements .
“ For me @ @ @ @ @ @ @ allows me to put away vast pieces of property , ” Keller said .
“ I want to save the world.
” Keller asserts the campaign against syndicated easements resulted from an unholy political deal between the Land Trust Alliance and IRS .
In September , he filed a Freedom of Information Act lawsuit against the IRS to force the release of correspondence between the two groups that he claims will provide smoking-gun evidence .
Land Trust Alliance CEO Andrew Bowman called the notion of such a conspiracy “ absurd.
” As he @ @ @ @ @ @ @ bilked .
The intent of Congress is being violated .
And the future viability of land conservation is endangered .
The egregious profiteering the IRS has tracked … must end.
” At the urging of Bowman ’ s group , bipartisan congressional sponsors have , for the past three years , proposed legislation that would kill most syndications by limiting their profitability .
It would bar deductions that exceed two and a half times the investment for any easement partnership that owned the land for less than three years .
In July , @ @ @ @ @ @ @ that passage of the latest incarnation , the “ Charitable Conservation Easement Program Integrity Act of 2019 , ” would , if enacted , produce $ 7.1 billion in additional tax revenue through 2021 .
The bill has yet to get out of committee .

In March 2019, the IRS added a scheme to its annual “Dirty Dozen” list of “the worst of the worst tax scams.” That same scheme was targeted, just weeks earlier, when the U.S. Department of Justice filed a fraud lawsuit against a handful of promoters allegedly responsible for generating more than $2 billion in improper tax write-offs. And the Senate Finance Committee has been investigating that very same racket, recently demanding thousands of pages of documents from six promoters. Lawmakers from both parties have introduced legislation to halt the same practice.
The scheme they’re all trying to kill is what’s called a “syndicated conservation easement,” which the IRS calls “abusive” and says has resulted in bogus deductions for the rich that have cost the U.S. Treasury billions in revenues.
A conservation easement, in its original, legitimate form, is granted when a landowner permanently protects pristine land from development. In that scenario, the public enjoys the benefit of undeveloped land and the taxpayer gets a charitable deduction. By contrast, the syndicated form, created and packaged by profit-seeking middlemen known as “promoters,” involves buying up land, finding an appraiser willing to declare that it has huge development value and thus is worth many times the purchase price, then selling stakes in the deal to wealthy investors who extract tax deductions that are often five or more times what they put in. (ProPublica investigated syndicated easements in the 2017 article “The Billion-Dollar Loophole.”)
But the multifront crackdown seems to be having, at best, a limited effect. There were signs that the pace of syndicated deals has eased, according to an IRS letter to Congress in July 2018 that cited incomplete data; that’s the most recent official statement from the agency, which declined to comment for this article. And some entities doing syndicated projects have seen their business drop or have even left the field. But IRS commissioner Chuck Rettig offered a different picture to the Senate Finance Committee this spring. “Syndicated transactions have absolutely not declined,” he testified. “They’re still there.”
In November, Rettig announced an escalation — including the launch of criminal investigations — in the agency’s attempts to stymie syndicated easements. “We will not stop in our pursuit of everyone involved in the creation, marketing, promotion and wrongful acquisition of artificial, highly inflated deductions based on these aggressive transactions,” he said in a statement at the time. Three IRS divisions are now conducting coordinated examinations of syndication deals after identifying 125 “high-risk cases,” and outside contractors have been hired to assist with the investigative load. More than 80 tax court cases are now pending against partnerships that used the syndicated easement deduction.
The imperviousness of the scam’s promoters and investors has left tax experts flummoxed. “Boy, it isn’t like the old days, when people were fearful of the IRS,” said Steven Miller, who oversaw enforcement and tax-exempt organizations during his 25 years at the IRS and is now national tax director with consulting firm Alliantgroup. “I’m worried people aren’t afraid of the cop on the beat any more.”
Another IRS veteran offered a similar view. “I thought by now they would have put these guys out of business,” said former agency commissioner John Koskinen, who took steps against syndicated easements before he left in late 2017. “Obviously, if you can get four to seven times your investment back in deductions, that’s a good deal. But you really have to have a lot of chutzpah to pull it off.”
Some promoters continue to flaunt their sales pitches. In November, for example, an Alabama promoter (which was not sued by the Justice Department) solicited high net-worth clients with an ad in Barron’s, promising, in capital letters, “TAX DEDUCTIONS AVAILABLE THROUGH CONSERVATION EASEMENTS…100,000 INVESTED YIELDS UP TO 600,000 IN DEDUCTIONS.”
And sizable deals are still being struck, including by an Atlanta firm called EcoVest Capital, a chief target of the Justice Department lawsuit. According to a private placement memorandum dated Oct. 24, which was obtained by ProPublica, EcoVest was planning as many as three new syndicated deals on 1,549 acres in rural Calhoun County, Texas. One, touting a deduction of $4.10 for every $1 invested, was completed by year-end. (The Justice Department suit, which is still in its early stage, asserted that EcoVest has been involved in 51 syndication easement deals since 2009, generating $1.7 billion in federal tax deductions.)
On their face, the risk disclosures to potential investors in a syndicated deal seem daunting. For example, the private placement memo for EcoVest’s Texas offering warned of a “very high likelihood that the Property Entity or the Company will be audited by the IRS.”
But experts cite several reasons for the stubborn survival of this tax-avoidance scheme. The first is that the IRS, which Congress has starved for funding, chiefly wields its clout through individual audits and tax court cases, which invariably take years. And even the dozens of tax court cases the IRS is pursuing target only a fraction of syndicated deals.
More important, the syndicated deals are structured in a way that insulate the wealthy individual investors, leaving the promoters and outside lawyers to do battle with the IRS. Their fight is fueled with “audit reserves” of as much as $1 million that are set aside as part of every syndication partnership. Some deals even offer “audit insurance” from Lloyds of London to offset disallowed write-offs.
“The way the structure works is pretty buttoned up,” Miller said. “The investor sits there and doesn’t see immediate pain. You’re not going to be bothered by the IRS at the front end. Some of them say: ‘Well, let me do the math. What’s the likelihood of that 40% penalty?’ That’s the calculation people are making.”
Miller believes the deterrent effect will kick in only if more cases personally target individual promoters and deal consultants with tough penalties and professional sanctions. “Ultimately,” he said, “they need to crush a few appraisers like a grape.”
The “linchpin” of the syndicated easements, Miller said, is the inflated appraisal. “How do I buy something today for a dollar and magically everything I buy is truly worth $10? That belies rational thought. You just scratch your head.”
Here’s how the appraisal worked in one syndicated deal described in the Justice Department complaint. In 2015, an EcoVest entity acquired 28 acres in North Myrtle Beach, South Carolina, for $1.1 million. The firm raised about $9 million from investors who bought the property, then made an easement donation based on a claimed value for what the land would be worth if developed as a multifamily resort. That projection, made by an appraiser hired by the promoters, produced a tax deduction of about $39.7 million. The tax writeoff for investors: $4.12 for every $1 invested.
In a written response to ProPublica’s questions, an EcoVest spokesperson called the government’s charges “baseless” and insisted that “none of the appraisals associated with EcoVest sponsored investments are abusive or fraudulent.”
One appraiser regularly retained by EcoVest and other syndicators also looms large in the Justice Department suit: Claud Clark III, based in Magnolia Springs, Alabama. The complaint notes his involvement in at least 58 syndicated easement deals and alleges that Clark, 66, “continually and repeatedly” generated “grossly overvalued appraisals.”
In January 2019, the Alabama state real estate appraiser board brought a formal complaint against Clark, after a detailed review of one of his easement appraisals found an inflated valuation riddled with errors and omissions. Threatened with loss of his Alabama license, Clark voluntarily surrendered it in April instead. He faces a second complaint filed with state regulators in Louisiana, regarding a 2018 appraisal he did for syndicators in Jefferson Davis Parish.
EcoVest has continued to use Clark. Its October private placement memorandum, which raised $19.3 million from investors, did not disclose that he had surrendered his appraisal license in his home state. (A spokesperson for EcoVest said Clark’s relinquishment of his Alabama license wasn’t disclosed “because, under securities laws, it was not material to whether Mr. Clark was authorized to issue an appraisal in Texas — a state with different appraisal rules, regulations, and practices.”)
Clark did not respond to requests for comment. On Christmas Eve, however, his attorneys filed a 130-page response and counterclaim to the Justice Department complaint, denying any inflated appraisals and accusing government officials, including the IRS commissioner, Rettig, of making “unlawful disclosures” of appraisal information from his tax returns in public statements about the litigation.
Promoters of syndicated conservation easements have long been at war with the supporters of traditional easements, who worry that abusive deals will prompt Congress to eliminate the tax break altogether. The traditional conservation community, embodied by the Land Trust Alliance, the Washington, D.C., association of nonprofit land trusts, began pressing the IRS to crack down nearly a decade ago. (Land trusts are a key part of the process: The rules for conservation easements require that any property donated to seek an easement deduction must be accepted and maintained by a land trust or government entity.) The Land Trust Alliance later refused to accredit any trust accepting syndicated deals.
The IRS’ attempt to crack down on syndicated easements dates back to December 2016, when the agency took the rare step of designating profit-making syndicated easements as abusive “listed” transactions. The IRS demanded special paperwork identifying everyone involved in such deals — from promoters and tax advisers to appraisers and investors — and warned that continued involvement would brand them for investigations and audits.
The agency next took its campaign to tax court, after refusing to back down on dozens of audits rejecting the fat write-offs and demanding back taxes, interest and penalties of up to 40%.
But with millions at stake, promoters have fought back fiercely. In 2016, they formed a Washington, D.C.-based advocacy group, called Partnership for Conservation, which has spent more than $3 million to date on lobbyists. EcoVest has spent another $2.5 million.
The Partnership for Conservation defends the legitimacy of syndicated deals, arguing that the profit motive produces “tremendous opportunities” for conservation, according to Robert Ramsay, executive director of the organization. He said that the IRS should limit enforcement to cases of appraisal and valuation abuse, which he calls rare. “You have to stop with the premise that all of these are egregious and over the top,” Ramsay said. “I don’t think that’s the case.”
Among the syndicators’ most fervent supporters is Robert Keller, a conservation biologist who runs the Atlantic Coast Conservancy, a land trust in Jasper, Georgia, and has accepted more syndicated easements than anyone. Keller acknowledged in an interview that his business has slowed, declining from 56 easements in 2017 to 22 in 2019. His land trust is itself now also under IRS audit for 2014 through 2016. (One of the reasons for the decline in volume for Keller: Atlanta-based Ornstein-Schuler, among the most prolific syndicated-easement promoters, announced last January that it was abandoning the business, citing “recent developments and the uncertainty related to the conservation and gifting of property.”)
Keller’s land trust displays the slogan “Saving the world — One small piece at a time.” He is unapologetic about accepting syndicated easements. “For me, as a conservation biologist, this allows me to put away vast pieces of property,” Keller said. “I want to save the world.”
Keller asserts the campaign against syndicated easements resulted from an unholy political deal between the Land Trust Alliance and IRS. In September, he filed a Freedom of Information Act lawsuit against the IRS to force the release of correspondence between the two groups that he claims will provide smoking-gun evidence.
Land Trust Alliance CEO Andrew Bowman called the notion of such a conspiracy “absurd.” As he put it: “Taxpayers are being bilked. The intent of Congress is being violated. And the future viability of land conservation is endangered. The egregious profiteering the IRS has tracked … must end.”
At the urging of Bowman’s group, bipartisan congressional sponsors have, for the past three years, proposed legislation that would kill most syndications by limiting their profitability. It would bar deductions that exceed two and a half times the investment for any easement partnership that owned the land for less than three years.
In July, Congress’ Joint Committee on Taxation projected that passage of the latest incarnation, the “Charitable Conservation Easement Program Integrity Act of 2019,” would, if enacted, produce $7.1 billion in additional tax revenue through 2021. The bill has yet to get out of committee.
Paul Kiel contributed to this report.


thefiscaltimes--2020-01-07--Good News for Tax Cheats: IRS Audit Rate Drops to Lowest in More Than 40 Years

The annual IRS report we told you about yesterday revealed that the agency audited just 0.45 % of individual tax returns in 2019 .
That marks the eighth year in a row the audit rate has dropped , says Richard Rubin of The Wall Street Journal , and the lowest level in at least 40 years .
Many tax experts agree that the IRS needs to beef up its enforcement efforts .
“ The audit rate reported for 2019 was less than half of what it was in 2010 , underscoring the depleted state of the IRS enforcement function , @ @ @ @ @ @ @ ” Chuck Marr of the Center on Budget and Policy Priorities told Rubin .
Spending more on enforcement makes sense financially .
As former Treasury Secretary Lawrence Summers and University of Pennsylvania law school professor Natasha Sarin recently argued , every $ 1 invested in auditing , technology and increased reporting would produce as much as $ 11 in revenue .
( The government ’ s estimate puts that number closer to $ 4 . )
Summers and Sarin proposed a $ 100 billion increase in IRS enforcement spending , which they said @ @ @ @ @ @ @ a decade .
But Congress spent years cutting the IRS budget , starting with the Republican-led push for fiscal austerity following the financial crisis , Rubin says .
Some critics say the reduction in funding — which has reduced the IRS workforce by 30,000 since 2010 — amounts to a hidden tax cut .
“ There are direct & indirect ways to cut taxes , ” says Jared Bernstein , a senior fellow at the Center on Budget and Policy Priorities .
“ Starving the IRS of the funds it needs to enforce @ @ @ @ @ @ @ indirect ways , one that leaves billions of owed taxes on the table.
” Richard Phillips , a tax analyst for Senate Budget Committee Democrats , said the decline in IRS enforcement helps at least one group .
“ Make no mistake , ” Phillips tweeted Tuesday , “ the primary beneficiaries of this policy shift are wealthy tax cheats .
”

The annual IRS report we told you about yesterday revealed that the agency audited just 0.45% of individual tax returns in 2019. That marks the eighth year in a row the audit rate has dropped, says Richard Rubin of The Wall Street Journal, and the lowest level in at least 40 years.
Many tax experts agree that the IRS needs to beef up its enforcement efforts. “The audit rate reported for 2019 was less than half of what it was in 2010, underscoring the depleted state of the IRS enforcement function, which urgently needs to be rebuilt,” Chuck Marr of the Center on Budget and Policy Priorities told Rubin.
Spending more on enforcement makes sense financially. As former Treasury Secretary Lawrence Summers and University of Pennsylvania law school professor Natasha Sarin recently argued, every $1 invested in auditing, technology and increased reporting would produce as much as $11 in revenue. (The government’s estimate puts that number closer to $4.) Summers and Sarin proposed a $100 billion increase in IRS enforcement spending, which they said would generate roughly $1 trillion over a decade.
But Congress spent years cutting the IRS budget, starting with the Republican-led push for fiscal austerity following the financial crisis, Rubin says. Some critics say the reduction in funding — which has reduced the IRS workforce by 30,000 since 2010 — amounts to a hidden tax cut. “There are direct & indirect ways to cut taxes,” says Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. “Starving the IRS of the funds it needs to enforce the code is among the most pernicious indirect ways, one that leaves billions of owed taxes on the table.”
Richard Phillips, a tax analyst for Senate Budget Committee Democrats, said the decline in IRS enforcement helps at least one group. “Make no mistake,” Phillips tweeted Tuesday, “the primary beneficiaries of this policy shift are wealthy tax cheats.”


thefiscaltimes--2020-01-06--Medicare Paid for $725 Million Worth of Drugs That Got Thrown Away

Medicare Part B in 2018 paid for $ 725 million worth of drugs that wound up being discarded , according to federal data highlighted by Axios ’ s Bob Herman .
The medications in question include expensive chemotherapy drugs and other treatments administered in outpatient settings by injection or infusion .
“ Drugs that are given intravenously and are based on someone 's weight are more difficult to administer than pills , and some can not be reused after the vials are opened — thus making them prone to some inevitable waste , ” Herman explains .
“ But some @ @ @ @ @ @ @ vials , knowing a lot will get thrown out but will lead to more reorders and sales.
” The cost of the discarded portions of medication represents just over 2 % of the nearly $ 35 billion that Medicare paid for the drugs .
But Rena Conti , a health economist at Boston University , tells Axios that it still adds up to a `` very astonishing amount of waste.
” Just 10 drugs accounted for nearly two-thirds of the wasted cost .
Some experts caution that requiring manufacturers to adjust their vial @ @ @ @ @ @ @ or lead to savings because of the pricing power drug companies have .
In other words , monopolists are going to charge what they want , Herman says , and there ’ s not much consumers can do about it .

Medicare Part B in 2018 paid for $725 million worth of drugs that wound up being discarded, according to federal data highlighted by Axios’s Bob Herman.
The medications in question include expensive chemotherapy drugs and other treatments administered in outpatient settings by injection or infusion. “Drugs that are given intravenously and are based on someone's weight are more difficult to administer than pills, and some cannot be reused after the vials are opened — thus making them prone to some inevitable waste,” Herman explains. “But some pharmaceutical companies package drugs in oversized single-use vials, knowing a lot will get thrown out but will lead to more reorders and sales.”
The cost of the discarded portions of medication represents just over 2% of the nearly $35 billion that Medicare paid for the drugs. But Rena Conti, a health economist at Boston University, tells Axios that it still adds up to a "very astonishing amount of waste.” Just 10 drugs accounted for nearly two-thirds of the wasted cost.
Some experts caution that requiring manufacturers to adjust their vial or dose size may not reduce waste or lead to savings because of the pricing power drug companies have. In other words, monopolists are going to charge what they want, Herman says, and there’s not much consumers can do about it.


thefiscaltimes--2020-01-03--The Path to War?

The Path to War?

Is the U.S. on a path to war with Iran ?
Neither side may want it , but fears of a new war in the Middle East have surged after President Trump ordered the targeted military strike that killed Iranian Maj. Gen. Qasem Soleimani , who commanded the elite Quds Force of the Islamic Revolutionary Guards Corps and reportedly was the architect behind nearly every major Iranian intelligence and military operation over the course of two decades .
“ We took action last night to stop a war , ” Trump said Friday .
“ We did not take action @ @ @ @ @ @ @ that the U.S. is not seeking regime change in Iran .
Trump and the Pentagon said the strike was aimed at deterring imminent Iranian attacks , though they did not provide further details .
Army Gen. Mark A. Milley , chairman of the Joint Chiefs of Staff , reportedly said Friday that a Soleimani-planned attack against Americans “ might still happen.
” The Pentagon said that it will deploy about 3,000 more troops to the Middle East after Iran vowed “ harsh retaliation.
” Republicans and Democrats alike called Soleimani a terrorist , @ @ @ @ @ @ @ “ no one should shed a tear ” over his death .
But Schumer and other Democrats said that congressional leaders should have been notified about the strike , and Democrats warned that the Soleimani ’ s killing could lead to a further escalation of hostilities that would put American lives at risk .
The fiscal factor : While other considerations — human life , national security and Americans ’ faith in their government — all take precedence , the fiscal impact of a potential full-scale war with Iran can ’ t be @ @ @ @ @ @ @ escalation brings us closer to another disastrous war in the Middle East that could cost countless lives and trillions more dollars , ” Sen. Bernie Sanders ( I-VT ) said .
So here ’ s a reminder of how much the post-9/11 wars are expected to cost in the long run .
According to an annual report published in November by the Watson Institute for International and Public Affairs at Brown University , the U.S. will have spent $ 5.4 trillion by the end of this year on what was once called the @ @ @ @ @ @ @ a nearly two-decade conflict that has involved operations in more than 80 countries .
Add another $ 1 trillion for the care of military veterans over the coming decades , and the total cost comes to an estimated $ 6.4 trillion .

Is the U.S. on a path to war with Iran? Neither side may want it, but fears of a new war in the Middle East have surged after President Trump ordered the targeted military strike that killed Iranian Maj. Gen. Qasem Soleimani, who commanded the elite Quds Force of the Islamic Revolutionary Guards Corps and reportedly was the architect behind nearly every major Iranian intelligence and military operation over the course of two decades.
“We took action last night to stop a war,” Trump said Friday. “We did not take action to start a war.” He added that the U.S. is not seeking regime change in Iran.
Trump and the Pentagon said the strike was aimed at deterring imminent Iranian attacks, though they did not provide further details. Army Gen. Mark A. Milley, chairman of the Joint Chiefs of Staff, reportedly said Friday that a Soleimani-planned attack against Americans “might still happen.” The Pentagon said that it will deploy about 3,000 more troops to the Middle East after Iran vowed “harsh retaliation.”
Republicans and Democrats alike called Soleimani a terrorist, and Senate Minority Leader Chuck Schumer said “no one should shed a tear” over his death. But Schumer and other Democrats said that congressional leaders should have been notified about the strike, and Democrats warned that the Soleimani’s killing could lead to a further escalation of hostilities that would put American lives at risk.
The fiscal factor: While other considerations — human life, national security and Americans’ faith in their government — all take precedence, the fiscal impact of a potential full-scale war with Iran can’t be entirely ignored. “Trump's dangerous escalation brings us closer to another disastrous war in the Middle East that could cost countless lives and trillions more dollars,” Sen. Bernie Sanders (I-VT) said.
So here’s a reminder of how much the post-9/11 wars are expected to cost in the long run. According to an annual report published in November by the Watson Institute for International and Public Affairs at Brown University, the U.S. will have spent $5.4 trillion by the end of this year on what was once called the “global war on terror” – a nearly two-decade conflict that has involved operations in more than 80 countries. Add another $1 trillion for the care of military veterans over the coming decades, and the total cost comes to an estimated $6.4 trillion.


thefiscaltimes--2020-01-08--First-Quarter Deficit Grew by 12%, CBO Projects

The federal deficit for the first three months of fiscal year 2020 grew by $ 39 billion , or 12 @ @ @ @ @ Office estimated on Wednesday .
The deficit for October through December totaled $ 358 billion @ @ @ @ @ been about $ 20 billion smaller if not for holiday-related shifts in the timing of @ @ @ @ @ the quarter grew by 7 % while revenues grew by 5 % .
The deficit @ @ @ @ @ 1 trillion this year for the first time since 2012 .

The federal deficit for the first three months of fiscal year 2020 grew by $39 billion, or 12%, the Congressional Budget Office estimated on Wednesday.
The deficit for October through December totaled $358 billion, though it would have been about $20 billion smaller if not for holiday-related shifts in the timing of certain payments.
Spending over the quarter grew by 7% while revenues grew by 5%.
The deficit is expected to top $1 trillion this year for the first time since 2012.


thefiscaltimes--2020-01-08--Why the IRS Is Struggling to Do Its Job

Why the IRS Is Struggling to Do Its Job

The IRS doesn ’ t have enough funding or personnel to do its job properly , according to the 2019 annual report from the Taxpayer Advocate Service , an independent organization within the Internal Revenue Service that assists taxpayers and recommends changes to improve the system .
In the first report released since long-serving leader Nina Olson stepped down , Acting National Taxpayer Advocate Bridget Roberts said that the agency is struggling to accomplish its stated mission : to provide “ America 's taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law @ @ @ @ @ @ @ '' Referring to money spent on the IRS as an “ extraordinary investment , ” Roberts laid out the economic argument for providing more resources to the tax agency : “ In FY 2018 , the IRS collected nearly $ 3.5 trillion on a budget of about $ 11.43 billion , producing a remarkable ROI of more than 300:1 .
It is economically irrational to underfund the IRS .
If a company ’ s accounts receivable department could generate an ROI of 300:1 and the chief executive officer ( CEO ) failed to @ @ @ @ @ @ @ so , the CEO would be fired.
” One problem , Roberts went on to say , is that federal budget rules do not take ROI of government spending into account , making it difficult to show the value of increased funding for the agency .
A big drop in employees : Adjusted for inflation , the IRS budget has been reduced by about 20 % since 2010 , and the number of employees has fallen by about 22 % .
“ The IRS receives approximately 100 million telephone calls every year , @ @ @ @ @ @ @ , ’ as its mission statement commits it to do , it requires adequate funding to hire enough employees to answer those calls , ” Roberts said .
A $ 3,000 surtax on taxpayers ?
Based on an estimated tax gap of $ 381 billion per year – the difference between what is owed and what is collected – the report says that U.S. households are effectively paying a $ 3,000 surtax each to cover the lost revenues of those who don ’ t pay all they owe .
The estimate , which @ @ @ @ @ @ @ a fixed amount of revenue while assigning all uncollected funds to those who do pay , is a bit shaky , but it highlights to high price imposed by the failure to invest sufficiently in collection and enforcement efforts .
Plenty of other problems : Roberts cited a litany of issues at the tax agency , including : • Obsolete technology : “ The two IRS systems containing the official records of individual and business taxpayer accounts are the oldest major technology systems in the federal government .
The IRS also has about @ @ @ @ @ @ @ not interconnected ; each function ’ s employees must transcribe or import information from other electronic systems and mail or fax it to other functions .
Obsolete IT systems limit the functionality of online taxpayer accounts , prevent taxpayers from obtaining full details about the status of their cases , and prevent the IRS from selecting the best cases for compliance actions.
” • Free File flop : The free tax filing program is supposed to cover about 70 % of individual taxpayers , but less than 2 % actually use it .
@ @ @ @ @ @ @ , “ the National Taxpayer Advocate believes that the current program is not promoting the best interests of taxpayers , ” Roberts said .
• A lack of permanent leadership : Roberts , who is serving as a temporary leader , said that “ the Office of the Taxpayer Advocate – and taxpayers – deserve a permanent appointee ...
Given the current crossroads at which the IRS finds itself , it is critical that a permanent National Taxpayer Advocate be appointed as quickly as possible to help ensure the IRS protects taxpayer rights @ @ @ @ @ @ @ A long list of recommended improvements : In a separate “ Purple Book , ” the National Taxpayer Advocate listed 58 recommendations for improving the IRS .
Some highlights , with links to more complete discussions : • Provide the IRS With Sufficient Funding to Meet Taxpayer Needs and Improve Federal Tax Compliance ( pdf ) • Codify the Taxpayer Bill of Rights , a Taxpayer Rights Training Requirement , and the IRS Mission Statement as Section 1 of the Internal Revenue Code ( pdf ) • Require the IRS to Provide Taxpayers @ @ @ @ @ @ @ Their Tax Dollars Are Being Spent ( pdf ) • Authorize the IRS to Establish Minimum Competency Standards for Federal Tax Return Preparers ( pdf ) • Protect Retirement Funds From IRS Levies , Including So-Called “ Voluntary ” Levies , in the Absence Of “ Flagrant Conduct ” by a Taxpayer ( pdf ) .

The IRS doesn’t have enough funding or personnel to do its job properly, according to the 2019 annual report from the Taxpayer Advocate Service, an independent organization within the Internal Revenue Service that assists taxpayers and recommends changes to improve the system.
In the first report released since long-serving leader Nina Olson stepped down, Acting National Taxpayer Advocate Bridget Roberts said that the agency is struggling to accomplish its stated mission: to provide “America's taxpayers top quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all."
Referring to money spent on the IRS as an “extraordinary investment,” Roberts laid out the economic argument for providing more resources to the tax agency:
“In FY 2018, the IRS collected nearly $3.5 trillion on a budget of about $11.43 billion, producing a remarkable ROI of more than 300:1. It is economically irrational to underfund the IRS. If a company’s accounts receivable department could generate an ROI of 300:1 and the chief executive officer (CEO) failed to provide enough funding for it to do so, the CEO would be fired.”
One problem, Roberts went on to say, is that federal budget rules do not take ROI of government spending into account, making it difficult to show the value of increased funding for the agency.
A big drop in employees: Adjusted for inflation, the IRS budget has been reduced by about 20% since 2010, and the number of employees has fallen by about 22%. “The IRS receives approximately 100 million telephone calls every year, and to provide ‘top quality service,’ as its mission statement commits it to do, it requires adequate funding to hire enough employees to answer those calls,” Roberts said.
A $3,000 surtax on taxpayers? Based on an estimated tax gap of $381 billion per year – the difference between what is owed and what is collected – the report says that U.S. households are effectively paying a $3,000 surtax each to cover the lost revenues of those who don’t pay all they owe. The estimate, which assumes the IRS is seeking to collect a fixed amount of revenue while assigning all uncollected funds to those who do pay, is a bit shaky, but it highlights to high price imposed by the failure to invest sufficiently in collection and enforcement efforts.
Plenty of other problems: Roberts cited a litany of issues at the tax agency, including:
Obsolete technology: “The two IRS systems containing the official records of individual and business taxpayer accounts are the oldest major technology systems in the federal government. The IRS also has about 60 case management systems that generally are not interconnected; each function’s employees must transcribe or import information from other electronic systems and mail or fax it to other functions. Obsolete IT systems limit the functionality of online taxpayer accounts, prevent taxpayers from obtaining full details about the status of their cases, and prevent the IRS from selecting the best cases for compliance actions.”
“The two IRS systems containing the official records of individual and business taxpayer accounts are the oldest major technology systems in the federal government. The IRS also has about 60 case management systems that generally are not interconnected; each function’s employees must transcribe or import information from other electronic systems and mail or fax it to other functions. Obsolete IT systems limit the functionality of online taxpayer accounts, prevent taxpayers from obtaining full details about the status of their cases, and prevent the IRS from selecting the best cases for compliance actions.” Free File flop: The free tax filing program is supposed to cover about 70% of individual taxpayers, but less than 2% actually use it. Based on several reviews of the program, “the National Taxpayer Advocate believes that the current program is not promoting the best interests of taxpayers,” Roberts said.
The free tax filing program is supposed to cover about 70% of individual taxpayers, but less than 2% actually use it. Based on several reviews of the program, “the National Taxpayer Advocate believes that the current program is not promoting the best interests of taxpayers,” Roberts said. A lack of permanent leadership: Roberts, who is serving as a temporary leader, said that “the Office of the Taxpayer Advocate – and taxpayers – deserve a permanent appointee ... Given the current crossroads at which the IRS finds itself, it is critical that a permanent National Taxpayer Advocate be appointed as quickly as possible to help ensure the IRS protects taxpayer rights and meets its obligations to taxpayers.”
A long list of recommended improvements: In a separate “Purple Book,” the National Taxpayer Advocate listed 58 recommendations for improving the IRS. Some highlights, with links to more complete discussions:


thefiscaltimes--2020-01-07--Is Health Care a Hidden $8,000 Tax on Each American Family?

The U.S. famously has the most expensive health-care system in the world , and according to two well-known economists it amounts to a hefty tax that households must pay each year .
Speaking at a conference last weekend , Angus Deaton and Anne Case of Princeton University said that Americans pay about $ 1 trillion more for health care than the next most expensive country , Switzerland .
Divided across the U.S. population , it ’ s the rough equivalent of an $ 8,000 “ poll tax ” on each household — a levy that is applied to all regardless @ @ @ @ @ @ @ , Deaton and Case say , is that the extra money provides little or no benefit .
In fact , life expectancy in Europe is higher than in the U.S. , suggesting that all the extra spending is a waste .
“ We can brag we have the most expensive health care .
We can also now brag that it delivers the worst health of any rich country , ” Case said , according to The Washington Post ’ s Heather Long , who wrote about the issue Tuesday .
Worse , Deaton @ @ @ @ @ @ @ is actively contributing to serious problems in the country , including the opioid epidemic and declining life expectancy .
Deaton singles out drugmakers , hospitals and even doctors for the roles they play , pointing out that about one in six of the top 1 % are physicians .
“ Physicians are a giant rent-seeking conspiracy that ’ s taking money away from the rest of us , ” Deaton told Long .
But fixing the problem won ’ t be easy .
“ [ E ] verybody loves physicians , ” Deaton @ @ @ @ @ @ @ touch them .
”

The U.S. famously has the most expensive health-care system in the world, and according to two well-known economists it amounts to a hefty tax that households must pay each year.
Speaking at a conference last weekend, Angus Deaton and Anne Case of Princeton University said that Americans pay about $1 trillion more for health care than the next most expensive country, Switzerland. Divided across the U.S. population, it’s the rough equivalent of an $8,000 “poll tax” on each household — a levy that is applied to all regardless of ability to pay.
The problem, Deaton and Case say, is that the extra money provides little or no benefit. In fact, life expectancy in Europe is higher than in the U.S., suggesting that all the extra spending is a waste. “We can brag we have the most expensive health care. We can also now brag that it delivers the worst health of any rich country,” Case said, according to The Washington Post’s Heather Long, who wrote about the issue Tuesday.
Worse, Deaton and Case say the health care system is actively contributing to serious problems in the country, including the opioid epidemic and declining life expectancy. Deaton singles out drugmakers, hospitals and even doctors for the roles they play, pointing out that about one in six of the top 1% are physicians.
“Physicians are a giant rent-seeking conspiracy that’s taking money away from the rest of us,” Deaton told Long. But fixing the problem won’t be easy. “[E]verybody loves physicians,” Deaton said. “You can’t touch them.”


thefiscaltimes--2020-01-06--Another Look at Trump’s Tax Cuts

Another Look at Trump’s Tax Cuts

The Tax Cuts and Jobs Act has been on the books for two years now , prompting The Wall Street Journal ’ s Richard Rubin and Theo Francis over the weekend to review how the law has fared so far .
A few effects are clear , Rubin and Francis say : Most households and businesses are paying lower taxes ; foreign subsidiaries have shifted more than $ 1 trillion to their U.S. corporate parents ; federal revenue projections are lower than they would have been without the tax cuts ( see the chart below ) ; and the deficit @ @ @ @ @ @ @ Republicans ’ claims that the cuts would pay for themselves .
In other respects , though , the picture is a lot “ muddier.
” While the economy is stronger today than it was projected to be back in 2017 , it ’ s not obvious that the tax package deserves the credit .
Economic indicators like employment and wages are up , but such “ metrics were already on the rise before the tax law was signed by President Trump , and most economic numbers don ’ t show a sharp change @ @ @ @ @ @ @ ” Rubin and Francis say .
“ Early growth in business investment seems to have faded ; overall economic growth rose before pulling back again.
” The bottom line : Rubin and Francis say it “ seems clear the tax cuts contributed to economic growth—but not enough to pay for themselves , as many backers promised .
And even some of the intended beneficiaries say the gains haven ’ t been dramatic .
”

The Tax Cuts and Jobs Act has been on the books for two years now, prompting The Wall Street Journal’s Richard Rubin and Theo Francis over the weekend to review how the law has fared so far.
A few effects are clear, Rubin and Francis say: Most households and businesses are paying lower taxes; foreign subsidiaries have shifted more than $1 trillion to their U.S. corporate parents; federal revenue projections are lower than they would have been without the tax cuts (see the chart below); and the deficit has risen sharply, contrary to some Republicans’ claims that the cuts would pay for themselves.
In other respects, though, the picture is a lot “muddier.” While the economy is stronger today than it was projected to be back in 2017, it’s not obvious that the tax package deserves the credit. Economic indicators like employment and wages are up, but such “metrics were already on the rise before the tax law was signed by President Trump, and most economic numbers don’t show a sharp change that coincides with the tax law,” Rubin and Francis say. “Early growth in business investment seems to have faded; overall economic growth rose before pulling back again.”
The bottom line: Rubin and Francis say it “seems clear the tax cuts contributed to economic growth—but not enough to pay for themselves, as many backers promised. And even some of the intended beneficiaries say the gains haven’t been dramatic.”
Read their full analysis here (paywall).


thefiscaltimes--2020-01-09--The GOP Divide on Health Care

The GOP Divide on Health Care

Wealthy Republicans are much less concerned about universal health care coverage than less wealthy Republicans , according to a new @ @ @ @ @ Robert Wood Johnson Foundation and the Harvard T.H .
Chan School of Public Health .
@ @ @ @ @ by income on the question of whether the government should make it a priority to @ @ @ @ @ coverage , ” the survey found .
“ Fifteen percent of Republicans in the top @ @ @ @ @ should be a very important priority .
Three times as many — 48 % — @ @ @ @ @ with that statement.
” Democrats are far more united on the issue , with about @ @ @ @ @ groups agreeing that universal health coverage should be a top priority .

Wealthy Republicans are much less concerned about universal health care coverage than less wealthy Republicans, according to a new survey from NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health.
“Republican voters vary substantially by income on the question of whether the government should make it a priority to make sure everyone has health coverage,” the survey found. “Fifteen percent of Republicans in the top 1% say that this should be a very important priority. Three times as many — 48% — of the lowest-income Republicans agree with that statement.”
Democrats are far more united on the issue, with about 90% across all income groups agreeing that universal health coverage should be a top priority.


thefiscaltimes--2020-01-09--Grassley Takes Aim at Fellow Republicans in Drug-Pricing Fight

Dan Diamond of Politico ’ s Pulse newsletter reports that Sen. Chuck Grassley , the GOP Senate Finance Committee Chair @ @ @ @ @ Majority Leader Mitch McConnell is the reason more Republicans haven ’ t supported his bipartisan @ @ @ @ @ competing House legislation doesn ’ t go far enough : “ Grassley on Wednesday dismissed @ @ @ @ @ ' competing drug legislation as too soft on pharma , and little more than an @ @ @ @ @ the party 's failure to slash prices .
‘ They have felt necessary to get @ @ @ @ @ that gives some Republicans that are up for election cover , ’ he told reporters @ @ @ @ @ bill 's failure to impose major restrictions on companies shows the ‘ strength of big @ @ @ @

Dan Diamond of Politico’s Pulse newsletter reports that Sen. Chuck Grassley, the GOP Senate Finance Committee Chair who last month said Senate Majority Leader Mitch McConnell is the reason more Republicans haven’t supported his bipartisan drug-pricing legislation, said that competing House legislation doesn’t go far enough:
“Grassley on Wednesday dismissed House Energy and Commerce Republicans' competing drug legislation as too soft on pharma, and little more than an effort to deflect attacks over the party's failure to slash prices. ‘They have felt necessary to get a Republican bill out there that gives some Republicans that are up for election cover,’ he told reporters, adding that the House bill's failure to impose major restrictions on companies shows the ‘strength of big pharma.’”


thefiscaltimes--2020-01-08--The Staggering Cost of US Health Care Bureaucracy

Seemingly everyone has a horror story to tell about dealing with the bureaucracy of the U.S. health care system , from mundane matters like medical records to financial fights over surprise medical bills or insurance claims .
Those individual experiences come at a high collective cost , according to a new study published in the Annals of Internal Medicine : U.S. health insurers and providers spent $ 812 billion on administration in 2017 , representing more than a third of national health expenditures , or double the 17 % percent that Canada spends under its single-payer system .
The U.S. @ @ @ @ @ @ @ per person — or almost five times as high as in Canada .
“ The gap in health administrative spending between the United States and Canada is large and widening , and it apparently reflects the inefficiencies of the U.S. private insurance–based , multipayer system , ” the study ’ s authors conclude .
“ The prices that U.S. medical providers charge incorporate a hidden surcharge to cover their costly administrative burden.
” The study finds that U.S. could have saved more than $ 600 billion in 2017 if it were able to @ @ @ @ @ @ @ ’ s .
“ The difference between Canada and the U.S. is enough to not only cover all the uninsured but also to eliminate all the copayments and deductibles , and to amp up home care for the elderly and disabled , ” Dr. David Himmelstein , a professor at the CUNY School of Public Health at Hunter College and co-author of the study , told Time .
“ And frankly to have money left over.
” Why it matters : This isn ’ t the first study to show that the U.S. @ @ @ @ @ @ @ countries , but it is the first major study calculating those system-wide costs in almost two decades .
The spending disparity detailed in the study “ could challenge some assumptions about the relative efficiency of public and private healthcare programs , ” writes Melissa Healy of the Los Angeles Times .
“ It could also become a hot political talking point on the American campaign trail as presidential candidates debate the pros and cons of government-funded universal health insurance.
” A steep rise in U.S. costs : Administrative costs have grown in both @ @ @ @ @ @ @ 20 years , but the increase in the United States has been much higher , mostly as the result of insurance overhead .
“ The study showed that private insurers contributed to most of the increase in administrative costs between 1999 and 2017 , ” Modern Healthcare ’ s Rachel Cohrs reports .
“ Of the 3.2 percentage point increase in administrative costs as a share of overall health spending , 2.4 percentage points were due to the expanding role that private insurers have assumed in Medicare and Medicaid.
” The insurance industry @ @ @ @ @ @ @ Plans , a group representing private health insurance companies , told the Los Angeles Times that government-run systems aren ’ t as efficient as private ones , citing a recent report by the Medicare Payment Advisory Commission , an independent body that advises Congress , that found that private Medicare Advantage plans deliver benefits at 88 % of the cost of traditional Medicare .
“ Study after study continues to demonstrate the value of innovative solutions brought by the free market , ” AHIP said in its statement .
“ In head-to-head comparisons @ @ @ @ @ @ @ more efficient than government-run systems.
” The researchers are single-payer advocates : Himmelstein and one of his co-authors , Dr. Steffie Woolhandler , also of the CUNY School of Public Health at Hunter College , have long advocated for a single-payer health-care system in the United States .
They co-founded the group Physicians for a National Health Program and have been unpaid policy advisors to Sen. Bernie Sanders and have coauthored research manuscripts with Sen. Elizabeth Warren .
Both senators are calling for a transition to a single-payer Medicare-for-All system .
But the @ @ @ @ @ @ @ new study are based on the data — and that their estimates of U.S. administrative costs are likely conservative .
`` It 's actually the data that guided us to the solution , the solution did n't give rise to the data , '' Himmelstein said , according to Modern Healthcare .
Himmelstein also says that , while it may be possible to reduce administrative costs without switching to a single-payer system , the benefits would be much smaller .
“ We could streamline the bureaucracy to some extent with other approaches , @ @ @ @ @ @ @ the magnitude of savings that we could get with a single payer , ” he told Time .

Seemingly everyone has a horror story to tell about dealing with the bureaucracy of the U.S. health care system, from mundane matters like medical records to financial fights over surprise medical bills or insurance claims.
Those individual experiences come at a high collective cost, according to a new study published in the Annals of Internal Medicine: U.S. health insurers and providers spent $812 billion on administration in 2017, representing more than a third of national health expenditures, or double the 17% percent that Canada spends under its single-payer system. The U.S. administrative costs translate to nearly $2,500 per person — or almost five times as high as in Canada.
“The gap in health administrative spending between the United States and Canada is large and widening, and it apparently reflects the inefficiencies of the U.S. private insurance–based, multipayer system,” the study’s authors conclude. “The prices that U.S. medical providers charge incorporate a hidden surcharge to cover their costly administrative burden.”
The study finds that U.S. could have saved more than $600 billion in 2017 if it were able to cut its administrative costs to match Canada’s. “The difference between Canada and the U.S. is enough to not only cover all the uninsured but also to eliminate all the copayments and deductibles, and to amp up home care for the elderly and disabled,” Dr. David Himmelstein, a professor at the CUNY School of Public Health at Hunter College and co-author of the study, told Time. “And frankly to have money left over.”
Why it matters: This isn’t the first study to show that the U.S. system has higher administrative costs than other countries, but it is the first major study calculating those system-wide costs in almost two decades. The spending disparity detailed in the study “could challenge some assumptions about the relative efficiency of public and private healthcare programs,” writes Melissa Healy of the Los Angeles Times. “It could also become a hot political talking point on the American campaign trail as presidential candidates debate the pros and cons of government-funded universal health insurance.”
A steep rise in U.S. costs: Administrative costs have grown in both the U.S. and Canada over the last 20 years, but the increase in the United States has been much higher, mostly as the result of insurance overhead. “The study showed that private insurers contributed to most of the increase in administrative costs between 1999 and 2017,” Modern Healthcare’s Rachel Cohrs reports. “Of the 3.2 percentage point increase in administrative costs as a share of overall health spending, 2.4 percentage points were due to the expanding role that private insurers have assumed in Medicare and Medicaid.”
The insurance industry response: America’s Health Insurance Plans, a group representing private health insurance companies, told the Los Angeles Times that government-run systems aren’t as efficient as private ones, citing a recent report by the Medicare Payment Advisory Commission, an independent body that advises Congress, that found that private Medicare Advantage plans deliver benefits at 88% of the cost of traditional Medicare. “Study after study continues to demonstrate the value of innovative solutions brought by the free market,” AHIP said in its statement. “In head-to-head comparisons, the free market continues to be more efficient than government-run systems.”
The researchers are single-payer advocates: Himmelstein and one of his co-authors, Dr. Steffie Woolhandler, also of the CUNY School of Public Health at Hunter College, have long advocated for a single-payer health-care system in the United States. They co-founded the group Physicians for a National Health Program and have been unpaid policy advisors to Sen. Bernie Sanders and have coauthored research manuscripts with Sen. Elizabeth Warren. Both senators are calling for a transition to a single-payer Medicare-for-All system. But the researchers say that their conclusions in the new study are based on the data — and that their estimates of U.S. administrative costs are likely conservative.
"It's actually the data that guided us to the solution, the solution didn't give rise to the data," Himmelstein said, according to Modern Healthcare.
Himmelstein also says that, while it may be possible to reduce administrative costs without switching to a single-payer system, the benefits would be much smaller. “We could streamline the bureaucracy to some extent with other approaches, but you can’t get nearly the magnitude of savings that we could get with a single payer,” he told Time.


thefiscaltimes--2020-01-13--The Deficit Topped $1 Trillion in 2019

The Deficit Topped $1 Trillion in 2019

The Fiscal Challenge for the Next Recession The federal budget deficit for fiscal year 2019 was nearly $ 1 trillion @ @ @ @ @ downturn , don ’ t be surprised if ...

Although Republicans have sometimes dominated the debate over efforts to reduce deficits and the debt, the Biden...


thefiscaltimes--2020-01-10--Chart of the Week: Trump Adds $4.7 Trillion in Debt

That ’ s how much the private debt collection program at the IRS collected in the 2019 fiscal year .
@ @ @ @ @ second year in a row , the program cleared nearly $ 148 million after commissions @ @ @ @ @ controversial program , which empowers private firms to go after delinquent taxpayers , began in @ @ @ @ @ years before the IRS ended it following a review .
It was restarted in 2015 @ @ @ @ @ for the next two years .
Senate Finance Chairman Chuck Grassley ( R-IA ) , @ @ @ @ @ in establishing the program , said Monday that the net proceeds are currently being used @ @ @ @ @ personnel at the IRS .

The Air Force has scrapped a planned upgrade of its B-2 stealth bomber fleet — even after spending $2 billion on the effort — because defense contractor Northrup Grumman didn’t have the necessary software expertise to complete the project on time and on budget, Bloomberg’s Anthony Capaccio reports, citing the Pentagon’s chief weapons buyer.
Ellen Lord, the undersecretary of defense for acquisition and sustainment, told reporters that the nearly $2 billion that had already been spent on the program wasn’t wasted because “we are still going to get upgraded electronic displays.”


thefiscaltimes--2020-01-10--House Democrats Likely to Skip Budget Resolution This Year

House Democrats are likely to skip passing a budget resolution this year , House Budget Committee Chairman John Yarmuth ( D-KY ) said , according to The Hill ’ s Niv Elis : “ Over the summer , congressional leaders from both parties and the White House struck a deal to increase legal spending caps for both 2020 and 2021 .
Having an agreement already in place on how much money will be spent on defense and domestic priorities for the year argues against doing a budget resolution , Yarmuth said .
“ ‘ It 's more unlikely than likely @ @ @ @ @ @ @ established , the appropriators are probably going to do something that 's pretty similar to what this year ’ s was , ’ he said.
” Skipping the budget would allow Democrats to steer clear of some potential intraparty tensions and tough votes that might highlight differences between progressives and moderates — but it also opens the party leaders up to criticism that they are , for a second straight year , failing to perform one of the core functions of Congress .
“ It ’ s a lazy man ’ s approach @ @ @ @ @ @ @ pick the numbers , get those pluck out of the air , and then everybody just go along with it , ” Rep. Steve Womack ( R-AR ) , the top Republican on the House Budget Committee , said , according to The Hill .
But Rep. Mark Pocan ( D-WI ) , a leader of the progressive caucus , downplayed the importance of the budget process and argued that voters care more about results .
“ I have no idea why we have an F-in ’ Budget Committee here period , because @ @ @ @ @ @ @ of functional way , ” Pocan said , accrding to The Hill .
“ If you could show me 15 people who live outside the Beltway who actually care , that could be relevant .
”

House Democrats are likely to skip passing a budget resolution this year, House Budget Committee Chairman John Yarmuth (D-KY) said, according to The Hill’s Niv Elis:
“Over the summer, congressional leaders from both parties and the White House struck a deal to increase legal spending caps for both 2020 and 2021. Having an agreement already in place on how much money will be spent on defense and domestic priorities for the year argues against doing a budget resolution, Yarmuth said.
“‘It's more unlikely than likely, because with the top-line numbers already established, the appropriators are probably going to do something that's pretty similar to what this year’s was,’ he said.”
Skipping the budget would allow Democrats to steer clear of some potential intraparty tensions and tough votes that might highlight differences between progressives and moderates — but it also opens the party leaders up to criticism that they are, for a second straight year, failing to perform one of the core functions of Congress.
“It’s a lazy man’s approach to budgeting: Just let the leadership pick the numbers, get those pluck out of the air, and then everybody just go along with it,” Rep. Steve Womack (R-AR), the top Republican on the House Budget Committee, said, according to The Hill.
But Rep. Mark Pocan (D-WI), a leader of the progressive caucus, downplayed the importance of the budget process and argued that voters care more about results. “I have no idea why we have an F-in’ Budget Committee here period, because it does not work in any kind of functional way,” Pocan said, accrding to The Hill. “If you could show me 15 people who live outside the Beltway who actually care, that could be relevant.”


thefiscaltimes--2020-01-10--How the GOP Will Attack Bernie Sanders' Wealth Tax

We highlighted yesterday a defense of wealth taxes from Gabriel Zucman , a liberal economist who has advised both Elizabeth Warren and Bernie Sanders on their tax proposals .
On Friday , a pair of conservative economists laid out their argument opposing such taxes in what The Washington Post ’ s Jeff Stein said was a “ possible preview of Republican attacks against the idea.
” Douglas Holtz-Eakin , who served as director of the Congressional Budget Office during the George W. Bush administration , and Gordon Gray of the conservative advocacy group American Action Forum argue in a new @ @ @ @ @ @ @ Sanders ’ wealth taxes would place a “ disproportionate burden ” on workers .
Warren ’ s proposed wealth tax — 2 % on household wealth over $ 50 million , rising to 6 % on household wealth over $ 1 billion — would reduce worker earnings by $ 1.2 trillion over a decade , while the Sanders plan — a graduated tax on wealth over $ 32 million — would cost workers $ 1.6 trillion .
The analysis assumes that a wealth tax would have a clear negative effect on economic growth @ @ @ @ @ @ @ basic mechanism .
“ [ T ] he tax constitutes a reduction in the supply of capital , and as a result it will reduce investment in innovation , lower productivity growth , and thus reduce wage growth .
These responses shift , at least in part , the effective burden of the taxes to the average worker , ” the economists say .
The analysis does not take into account the way in which the revenues raised by a wealth tax – estimated to be somewhere between $ 2 trillion and $ @ @ @ @ @ @ @ the government , which proponents say would increase economic growth through investments in public goods .
“ This analysis from a right-wing think tank relies on disproven assumptions about how taxes on the ultra-rich affect the economy , ” Warren campaign spokeswoman Saloni Sharma said in a statement quoted by The Hill .
“ Elizabeth 's wealth tax will produce trillions in revenue to fund middle-class investments that will grow our economy and provide families with more financial security.
” Other supporters of the wealth tax took issue with the assumptions built into @ @ @ @ @ @ @ Bruenig of the left-leaning People ’ s Policy Project argued that recent reductions of taxes on capital have been associated with less investment , not more , contrary to the economic model deployed by AAF .
• Michael Linden of the progressive advocacy group Groundwork Collaborative rejected the basic framework of the analysis while tweaking conservatives over their big and largely unfilled promises about the Trump tax cuts : “ Arguments that a wealth tax will ‘ hurt the economy ’ always ignore negative effects of wealth inequality , and rely on an @ @ @ @ @ @ @ taxes and investment , ” Linden tweeted Friday .
“ Remember how the corporate tax cut was supposed to unleash an investment boom ?
” The bottom line : We ’ ll probably be hearing a lot about wealth taxes as we head toward the 2020 elections this fall .
The wildly different estimates of how they would affect the economy highlight just how far apart Democrats and Republicans are on the issue .

We highlighted yesterday a defense of wealth taxes from Gabriel Zucman, a liberal economist who has advised both Elizabeth Warren and Bernie Sanders on their tax proposals. On Friday, a pair of conservative economists laid out their argument opposing such taxes in what The Washington Post’s Jeff Stein said was a “possible preview of Republican attacks against the idea.”
Douglas Holtz-Eakin, who served as director of the Congressional Budget Office during the George W. Bush administration, and Gordon Gray of the conservative advocacy group American Action Forum argue in a new paper that both Warren’s and Sanders’ wealth taxes would place a “disproportionate burden” on workers. Warren’s proposed wealth tax — 2% on household wealth over $50 million, rising to 6% on household wealth over $1 billion — would reduce worker earnings by $1.2 trillion over a decade, while the Sanders plan — a graduated tax on wealth over $32 million — would cost workers $1.6 trillion.
The analysis assumes that a wealth tax would have a clear negative effect on economic growth and wages, operating through a fairly basic mechanism. “[T]he tax constitutes a reduction in the supply of capital, and as a result it will reduce investment in innovation, lower productivity growth, and thus reduce wage growth. These responses shift, at least in part, the effective burden of the taxes to the average worker,” the economists say.
The analysis does not take into account the way in which the revenues raised by a wealth tax – estimated to be somewhere between $2 trillion and $4 trillion – would be used by the government, which proponents say would increase economic growth through investments in public goods. “This analysis from a right-wing think tank relies on disproven assumptions about how taxes on the ultra-rich affect the economy,” Warren campaign spokeswoman Saloni Sharma said in a statement quoted by The Hill. “Elizabeth's wealth tax will produce trillions in revenue to fund middle-class investments that will grow our economy and provide families with more financial security.”
Other supporters of the wealth tax took issue with the assumptions built into the AAF economic model.
Matt Bruenig of the left-leaning People’s Policy Project argued that recent reductions of taxes on capital have been associated with less investment, not more, contrary to the economic model deployed by AAF.
Michael Linden of the progressive advocacy group Groundwork Collaborative rejected the basic framework of the analysis while tweaking conservatives over their big and largely unfilled promises about the Trump tax cuts: “Arguments that a wealth tax will ‘hurt the economy’ always ignore negative effects of wealth inequality, and rely on an empirically unsupported idea of the relationship between taxes and investment,” Linden tweeted Friday. “Remember how the corporate tax cut was supposed to unleash an investment boom?”
The bottom line: We’ll probably be hearing a lot about wealth taxes as we head toward the 2020 elections this fall. The wildly different estimates of how they would affect the economy highlight just how far apart Democrats and Republicans are on the issue.
Read the AAF analysis here.


thefiscaltimes--2020-01-09--Is a Wealth Tax a ‘Very American Idea’?

Is a Wealth Tax a ‘Very American Idea’?

The wealth tax proposed by Democratic presidential candidates Elizabeth Warren and Bernie Sanders has broad support among the American public .
A Hill-HarrisX survey last year found that 74 % of respondents supported the imposition of a 2 % tax on household assets over $ 50 million and a 3 % tax on assets over $ 1 billion , while just 26 % of respondents were opposed .
Not surprisingly , the idea has markedly less support among the ranks of America ’ s super-wealthy .
A number of billionaires have expressed their opposition to the idea , including Democratic @ @ @ @ @ @ @ idea is “ probably unconstitutional.
” ( Warren wondered earlier this week if worries about her wealth tax inspired Bloomberg to run .
“ I guess he figured it was cheaper than paying a $ 0.02 wealth tax , ” she quipped . )
Other billionaires have spoken out against the proposed tax , focusing on questions of legality , practicality and fairness .
In an interview released Thursday , billionaire sports merchandiser Michael Rubin framed the wealth tax as a job and business killer .
“ I think the effect of having @ @ @ @ @ @ @ that are starting companies and say , I 'm not going to start them in America , but go somewhere else , because it 's such a negative impact , ” Rubin told Yahoo Finance .
In their new book , The Triumph of Injustice , liberal economists Emmanuel Saez and Gabriel Zucman , who advised both Warren and Sanders on their tax plans , lay out their argument for a wealth tax .
In a newly published interview with Clio Chang of The Nation , Zucman says that a wealth tax was @ @ @ @ @ @ @ taxable income : '' Take the case of Warren Buffett .
He ’ s worth $ 80 billion today , and his true economic income is something like 6 percent of his wealth , so around $ 5 billion , but because he instructs his company Berkshire Hathaway not to pay dividends , his taxable income is very low .
Basically , what Buffet [ t ] and other people in his position do is he sells a few shares every year , realizes gains on those shares , $ 10 million or @ @ @ @ @ @ @ a little bit of taxes on that .
And you see that even if you increased the top marginal income tax to 90 percent in the case of Buffett , it would not make any significant difference to his tax bill .
That ’ s the reason we need a wealth tax . ''
Zucman also argues for a wealth tax on political grounds , saying that they reduce inequality and serve as a check on the political power of the wealthy .
“ It ’ s a very American idea , ” @ @ @ @ @ @ @ ’ s proposed 100 % tax on incomes over $ 25,000 , or roughly $ 1 million in current dollars .
Congress eventually settled on a 94 % top marginal rate – “ not very far from 100 percent , ” Zucman says – and kept the top rate at around 90 % for decades .
Zucman says the rates stayed high because lawmakers understood that they were designed to limit the concentration of wealth .
“ This idea that excessive income and wealth inequality is a bad thing in and of itself @ @ @ @ @ @ @ which was created in part in reaction against the highly unequal and aristocratic European societies of the 18th century , ” Zucman said .
“ One powerful way to regulate that inequality is with sharply progressive income taxation on very high incomes .
What we ’ re trying to do in the book is to help the American public reconnect with this tradition .
What we ’ re saying is , ‘ Look , that ’ s your history .
’ ”

The wealth tax proposed by Democratic presidential candidates Elizabeth Warren and Bernie Sanders has broad support among the American public. A Hill-HarrisX survey last year found that 74% of respondents supported the imposition of a 2% tax on household assets over $50 million and a 3% tax on assets over $1 billion, while just 26% of respondents were opposed.
Not surprisingly, the idea has markedly less support among the ranks of America’s super-wealthy. A number of billionaires have expressed their opposition to the idea, including Democratic candidate Michael Bloomberg, who said the idea is “probably unconstitutional.” (Warren wondered earlier this week if worries about her wealth tax inspired Bloomberg to run. “I guess he figured it was cheaper than paying a $0.02 wealth tax,” she quipped.)
Other billionaires have spoken out against the proposed tax, focusing on questions of legality, practicality and fairness. In an interview released Thursday, billionaire sports merchandiser Michael Rubin framed the wealth tax as a job and business killer. “I think the effect of having a net worth tax would take people that are starting companies and say, I'm not going to start them in America, but go somewhere else, because it's such a negative impact,” Rubin told Yahoo Finance.
In their new book, The Triumph of Injustice, liberal economists Emmanuel Saez and Gabriel Zucman, who advised both Warren and Sanders on their tax plans, lay out their argument for a wealth tax. In a newly published interview with Clio Chang of The Nation, Zucman says that a wealth tax was necessary because many rich people report little taxable income:
"Take the case of Warren Buffett. He’s worth $80 billion today, and his true economic income is something like 6 percent of his wealth, so around $5 billion, but because he instructs his company Berkshire Hathaway not to pay dividends, his taxable income is very low. Basically, what Buffet[t] and other people in his position do is he sells a few shares every year, realizes gains on those shares, $10 million or $20 million, and then pays a little bit of taxes on that. And you see that even if you increased the top marginal income tax to 90 percent in the case of Buffett, it would not make any significant difference to his tax bill. That’s the reason we need a wealth tax."
Zucman also argues for a wealth tax on political grounds, saying that they reduce inequality and serve as a check on the political power of the wealthy. “It’s a very American idea,” Zucman says, citing Franklin D. Roosevelt’s proposed 100% tax on incomes over $25,000, or roughly $1 million in current dollars. Congress eventually settled on a 94% top marginal rate – “not very far from 100 percent,” Zucman says – and kept the top rate at around 90% for decades.
Zucman says the rates stayed high because lawmakers understood that they were designed to limit the concentration of wealth. “This idea that excessive income and wealth inequality is a bad thing in and of itself is deeply rooted in the US, which was created in part in reaction against the highly unequal and aristocratic European societies of the 18th century,” Zucman said. “One powerful way to regulate that inequality is with sharply progressive income taxation on very high incomes. What we’re trying to do in the book is to help the American public reconnect with this tradition. What we’re saying is, ‘Look, that’s your history.’”
Read the full Zucman interview here.


thefiscaltimes--2020-01-09--Promising Idea to Cut Health-Care Costs Fizzles in Major Study

Just 5 % of the U.S. population accounts for 50 % of all health spending .
So the idea of addressing the medical and social needs of the sickest and most expensive patients among us to keep them from making repeated visits to the hospital holds some obvious appeal as a way to bring down overall health care spending .
The promising concept , known as hot-spotting , was widely touted .
Dr. Jeffrey Brenner , a New Jersey physician who helped pioneer the model and popularized it by founding the Camden Coalition of Healthcare Providers in 2002 , was @ @ @ @ @ @ @ and won a MacArthur Foundation “ genius ” grant .
“ Many hospital and insurance executives have pinned their hopes on this work because it promised to solve a common problem : when patients lives are so complicated by social factors like poverty and addiction that their manageable medical conditions , like diabetes and asthma , lead to expensive , recurring hospital stays , ” Dan Gorenstein and Leslie Walker explain at Kaiser Health News .
But a new study published by MIT researchers in the New England Journal of Medicine found the @ @ @ @ @ @ @ cutting hospital readmissions and total health care spending .
“ Researchers thought they had a way to keep hard-to-treat patients from constantly returning to the hospital and racking up big medical bills .
Health workers visited homes , went along to doctor appointments , made sure medicines were available and tackled social problems including homelessness , addiction and mental health issues .
“ Readmissions seemed to drop .
… But a more robust study released Wednesday revealed it was a stunning failure on its main goal : Readmission rates did decline , but @ @ @ @ @ @ @ comparison group of similar patients not in the costly program.
” Why it matters : “ The surprising lack of results offers a cautionary tale about how difficult it is to improve patients ’ care and reduce costs , ” writes New York Times reporter Reed Abelson .
The researchers behind the new study say it ’ s important that we keep looking for answers — and rigorously test new ideas .
“ Of course it 's disappointing to learn that a relatively cheap and short-term intervention was n't the magic bullet for @ @ @ @ @ @ @ important problem , ” MIT economist Amy Finkelstein , an author of the new study , told Politico .
`` But that 's how science makes progress . ''
The safety net may not be strong enough for these patients : “ The study ’ s researchers offered several possible reasons for the program ’ s lack of success , including a lack of follow-up home visits or doctor ’ s appointments or insufficient resources , ” Abelson says .
Marchione notes , for example , that the program was able to meet @ @ @ @ @ @ @ home visit and a trip to a health provider within a week of leaving the hospital — for just 28 % of study participants .
Brenner says that the resources available to help the neediest patients were more limited than the Camden Coalition had estimated , and that the care coordination he pioneered was necessary — but insufficient without a stronger safety net .
“ When we started this 10 years ago , the dominant belief was this was a coordination problem .
As we got deeper into the work it became clear @ @ @ @ @ @ @ job of navigating and coordinating services , there was a fundamental failure of these services to deliver what these patients need , ” he told Reuters .
And he provided this devastating summation to Kaiser Health News : “ The bottom line is , we built a brilliant intervention to navigate people to nowhere.
” Brenner says that housing may play a more important role in breaking the cycle of hospitalizations for these patients .
At UnitedHealthcare , where he is now an executive , he is leading an experiment to providing housing @ @ @ @ @ @ @ approach might be more effective : The study ’ s result may indicate that a patient-centered approach might not be the answer to reducing waste , Boston University economist Austin Frakt writes at The New York Times : “ The other approach to fighting wasteful medical spending starts with looking at health care as a system of goods and services : medications and surgical procedures , administrative processes and physical infrastructure .
Some of these enhance health and others don ’ t , while some of it costs more than its benefits warrant @ @ @ @ @ @ @ and services and deliver effective care at lower prices , you can make the system more efficient for everyone.
” But a systemic approach faces significant challenges that make it hard to implement , at least without harming the quality of care .
“ Directly and systematically reducing wasteful care is hard because the most successful strategies threaten the revenue of dominant health care providers , ” Michael McWilliams , a professor at Harvard Medical School and a general internist with Brigham and Women ’ s Hospital , told Frakt .
“ One @ @ @ @ @ @ @ s income.
” Frakt ’ s conclusion : “ The answer isn ’ t necessarily to pick a patient- or system-focused approach to reforming health care , but to do both effectively .
”

Just 5% of the U.S. population accounts for 50% of all health spending. So the idea of addressing the medical and social needs of the sickest and most expensive patients among us to keep them from making repeated visits to the hospital holds some obvious appeal as a way to bring down overall health care spending.
The promising concept, known as hot-spotting, was widely touted. Dr. Jeffrey Brenner, a New Jersey physician who helped pioneer the model and popularized it by founding the Camden Coalition of Healthcare Providers in 2002, was profiled in a 2011 New Yorker piece and won a MacArthur Foundation “genius” grant.
“Many hospital and insurance executives have pinned their hopes on this work because it promised to solve a common problem: when patients lives are so complicated by social factors like poverty and addiction that their manageable medical conditions, like diabetes and asthma, lead to expensive, recurring hospital stays,” Dan Gorenstein and Leslie Walker explain at Kaiser Health News.
But a new study published by MIT researchers in the New England Journal of Medicine found the approach to be a disappointing failure in cutting hospital readmissions and total health care spending.
The Associated Press’s Marilynn Marchione reports:
“Researchers thought they had a way to keep hard-to-treat patients from constantly returning to the hospital and racking up big medical bills. Health workers visited homes, went along to doctor appointments, made sure medicines were available and tackled social problems including homelessness, addiction and mental health issues.
“Readmissions seemed to drop. … But a more robust study released Wednesday revealed it was a stunning failure on its main goal: Readmission rates did decline, but by the same amount as for a comparison group of similar patients not in the costly program.”
Why it matters: “The surprising lack of results offers a cautionary tale about how difficult it is to improve patients’ care and reduce costs,” writes New York Times reporter Reed Abelson. The researchers behind the new study say it’s important that we keep looking for answers — and rigorously test new ideas. “Of course it's disappointing to learn that a relatively cheap and short-term intervention wasn't the magic bullet for solving an incredibly complex, costly and important problem,” MIT economist Amy Finkelstein, an author of the new study, told Politico. "But that's how science makes progress."
The safety net may not be strong enough for these patients: “The study’s researchers offered several possible reasons for the program’s lack of success, including a lack of follow-up home visits or doctor’s appointments or insufficient resources,” Abelson says. Marchione notes, for example, that the program was able to meet two of its main goals —making a home visit and a trip to a health provider within a week of leaving the hospital — for just 28% of study participants.
Brenner says that the resources available to help the neediest patients were more limited than the Camden Coalition had estimated, and that the care coordination he pioneered was necessary — but insufficient without a stronger safety net.
“When we started this 10 years ago, the dominant belief was this was a coordination problem. As we got deeper into the work it became clear that even if you did a great job of navigating and coordinating services, there was a fundamental failure of these services to deliver what these patients need,” he told Reuters. And he provided this devastating summation to Kaiser Health News: “The bottom line is, we built a brilliant intervention to navigate people to nowhere.”
Brenner says that housing may play a more important role in breaking the cycle of hospitalizations for these patients. At UnitedHealthcare, where he is now an executive, he is leading an experiment to providing housing to high-cost patients.
Or a different approach might be more effective: The study’s result may indicate that a patient-centered approach might not be the answer to reducing waste, Boston University economist Austin Frakt writes at The New York Times:
“The other approach to fighting wasteful medical spending starts with looking at health care as a system of goods and services: medications and surgical procedures, administrative processes and physical infrastructure. Some of these enhance health and others don’t, while some of it costs more than its benefits warrant. If you can identify wasteful goods and services and deliver effective care at lower prices, you can make the system more efficient for everyone.”
But a systemic approach faces significant challenges that make it hard to implement, at least without harming the quality of care. “Directly and systematically reducing wasteful care is hard because the most successful strategies threaten the revenue of dominant health care providers,” Michael McWilliams, a professor at Harvard Medical School and a general internist with Brigham and Women’s Hospital, told Frakt. “One person’s waste is another’s income.”
Frakt’s conclusion: “The answer isn’t necessarily to pick a patient- or system-focused approach to reforming health care, but to do both effectively.”


thefiscaltimes--2020-01-14--4 Potential Reforms for the Capital Gains Tax

Reforming the capital gains tax is one way to simultaneously address both rising inequality and growing federal deficits , say William G. Gale and Grace Enda of the Brookings Institution .
The current tax system allows some kinds of economic income – unrealized gains in a variety of guises – to go untaxed , and Gale and Enda provide some options for policymakers who want to capture some of that wealth , both to cover existing fiscal shortfalls and to reduce inequality : 1 .
Eliminate the “ Angel of Death ” loophole : Currently , wealth can be passed @ @ @ @ @ @ @ stepped-up basis , with capital gains and associated taxes wiped out for inheritors and values reset at current levels .
Alternatively , estates could be passed down on a carryover basis that keeps original purchase prices in place , leaving the inheritor on the hook for the full capital gains tax at the time of sale .
The Joint Committee on Taxation estimates that such a change would produce about $ 105 billion over 10 years .
2 .
Tax capital gains at death : Taxing all estates at death would raise billions @ @ @ @ @ @ @ would likely be difficult to implement for illiquid or hard-to-value assets .
3 .
Tax capital gains every year : Paying taxes on a “ mark-to-market ” basis every year would raise more than $ 1 trillion over 10 years by some estimates , but would also likely create serious problems related to valuations and cash flow .
4 .
Vary the capital gains tax rate : “ Retrospective taxation ” would allow the tax rate to increase over time , eliminating the benefits of tax shelters while allowing tax payments to be @ @ @ @ @ @ @

Reforming the capital gains tax is one way to simultaneously address both rising inequality and growing federal deficits, say William G. Gale and Grace Enda of the Brookings Institution. The current tax system allows some kinds of economic income – unrealized gains in a variety of guises – to go untaxed, and Gale and Enda provide some options for policymakers who want to capture some of that wealth, both to cover existing fiscal shortfalls and to reduce inequality:
1. Eliminate the “Angel of Death” loophole: Currently, wealth can be passed on to the next generation on a stepped-up basis, with capital gains and associated taxes wiped out for inheritors and values reset at current levels. Alternatively, estates could be passed down on a carryover basis that keeps original purchase prices in place, leaving the inheritor on the hook for the full capital gains tax at the time of sale. The Joint Committee on Taxation estimates that such a change would produce about $105 billion over 10 years.
2. Tax capital gains at death: Taxing all estates at death would raise billions more than a carryover system, but would likely be difficult to implement for illiquid or hard-to-value assets.
3. Tax capital gains every year: Paying taxes on a “mark-to-market” basis every year would raise more than $1 trillion over 10 years by some estimates, but would also likely create serious problems related to valuations and cash flow.
4. Vary the capital gains tax rate: “Retrospective taxation” would allow the tax rate to increase over time, eliminating the benefits of tax shelters while allowing tax payments to be postponed until an asset is sold.