I see that five former Democratic chairs of the Council of Economic Advisers warned of an impending debt crisis in a column in the Washington Post. They tell us that current and projected future levels of deficits and debts will soon send interest rates soaring, crashing the economy. While I am skeptical about the basic proposition for a number of reasons, perhaps most importantly Japan’s persistently low interest and inflation rates in spite of a debt-to-GDP ratio that is two and a half times ours, but let me offer a solution: selling off patent monopolies.
We can sell off patent monopolies in all sorts of areas, auctioning off as many as are necessary to make our deficit hawks happy. For example, we can sell off a patent on the idea of turning left at a fork in the road. If people try to get around the patent by taking three rights, we can sell off the patent on turning right at the fork in the road. And of course, we can sell off a patent on turning around and going in the opposite direction to take care of these wise asses.
We can sell off patents on boiling water and making ice. We can make as long a list as we like, there are no shortage of items which we can turn into patent monopolies.
Is this horrible economic policy? Of course it is, but our deficit hawks never pay attention to the obligations we impose on future taxpayers by granting patent and copyright monopolies, they just look at the debt. So, if that s all they care about, let’s solve the debt problem by issuing more patent and copyright monopolies and make many of our country’s leading economists happy.
And, just to be clear, we are talking about enormous sums of money. In the case of prescription drugs alone, patent and related protections cost us around $370 billion a year. This is almost 2.0 percent of GDP or more than twice the burden of interest service on the debt, net of money refunded by the Fed. (This is discussed in my [free] book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)
We could clearly raise enough money by selling off various patent and copyright monopolies to get our debt down to whatever size is needed to make our economists happy. It’s stupid policy, but as the old saying goes, economists are not very good at economics.
I see that five former Democratic chairs of the Council of Economic Advisers warned of an impending debt crisis in a column in the Washington Post. They tell us that current and projected future levels of deficits and debts will soon send interest rates soaring, crashing the economy. While I am skeptical about the basic proposition for a number of reasons, perhaps most importantly Japan’s persistently low interest and inflation rates in spite of a debt-to-GDP ratio that is two and a half times ours, but let me offer a solution: selling off patent monopolies.
We can sell off patent monopolies in all sorts of areas, auctioning off as many as are necessary to make our deficit hawks happy. For example, we can sell off a patent on the idea of turning left at a fork in the road. If people try to get around the patent by taking three rights, we can sell off the patent on turning right at the fork in the road. And of course, we can sell off a patent on turning around and going in the opposite direction to take care of these wise asses.
We can sell off patents on boiling water and making ice. We can make as long a list as we like, there are no shortage of items which we can turn into patent monopolies.
Is this horrible economic policy? Of course it is, but our deficit hawks never pay attention to the obligations we impose on future taxpayers by granting patent and copyright monopolies, they just look at the debt. So, if that s all they care about, let’s solve the debt problem by issuing more patent and copyright monopolies and make many of our country’s leading economists happy.
And, just to be clear, we are talking about enormous sums of money. In the case of prescription drugs alone, patent and related protections cost us around $370 billion a year. This is almost 2.0 percent of GDP or more than twice the burden of interest service on the debt, net of money refunded by the Fed. (This is discussed in my [free] book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.)
We could clearly raise enough money by selling off various patent and copyright monopolies to get our debt down to whatever size is needed to make our economists happy. It’s stupid policy, but as the old saying goes, economists are not very good at economics.
Read More Leer más Join the discussion Participa en la discusión
Seriously, the NYT ran a piece with the headline, “why Trump’s tariffs could raise the cost of a hip replacement.” The point of the piece is that we now import a substantial amount of medical equipment and devices from China. This means that if we have to pay 25 percent more, then the price of these items in the United States will be higher. This means that operations like hip replacements that might require some equipment now purchased from China will cost more.
Okay, let’s try to use some numbers here. The piece tells us that we import $3 billion a year in medical equipment from China. According to the Commerce Department, we spent over $90 billion on medical equipment and devices last year (National Income and Product Accounts, Table 5.5.5U, Line 6). This means that the items imported from China came to a bit more than 3 percent of the total.
If the tariffs are passed on in full (a very questionable assumption, both because of the large market here and the fact that actual production costs are a small fraction of the price of these patent-protected items), then the price of medical equipment would rise on average about 0.8 percent. Most of the cost of major surgeries like hip replacements go to the doctor and hospital, not the artificial device, but let’s say that half of the cost is the device itself.
This means that the cost of your hip replacement surgery will rise by a whopping 0.4 percent as a result of the Trump tariffs! The NYT should look for some better ammunition if it wants to seriously push its case.
Addendum
Robert Salzberg points out to me that if the artificial hip itself were produced in China, then the price increase resulting from the tariff would be 25 percent on the implant, not 0.8 percent as I assume above. In this post, I assumed that implants are as likely to be produced in China as medical equipment more generally, but Robert’s point is worth noting.
He also points me to an old NYT piece on medical travel, which gives the price of manufacturing an implant at $350 in the United States and $150 in Asia. This piece gives further evidence that any increases in the price of implants from China due to the tariff will be virtually invisible in the cost of the procedure.
It is also yet another reminder of the enormous potential gains from free trade in medical travel. If any of our politicians actually supported free trade, the gains from setting up an institutional structure (i.e. rules for insurers and malpractice) to facilitate medical travel would swamp the gains from trade deals like NAFTA and the TPP. Unfortunately, most politicians are staunchly protectionist when it comes to measures that might reduce the income of doctors, hospitals, and medical equipment manufacturers. They only are interested in reducing trade barriers when most of the losers are less-educated and less politically powerful workers.
Seriously, the NYT ran a piece with the headline, “why Trump’s tariffs could raise the cost of a hip replacement.” The point of the piece is that we now import a substantial amount of medical equipment and devices from China. This means that if we have to pay 25 percent more, then the price of these items in the United States will be higher. This means that operations like hip replacements that might require some equipment now purchased from China will cost more.
Okay, let’s try to use some numbers here. The piece tells us that we import $3 billion a year in medical equipment from China. According to the Commerce Department, we spent over $90 billion on medical equipment and devices last year (National Income and Product Accounts, Table 5.5.5U, Line 6). This means that the items imported from China came to a bit more than 3 percent of the total.
If the tariffs are passed on in full (a very questionable assumption, both because of the large market here and the fact that actual production costs are a small fraction of the price of these patent-protected items), then the price of medical equipment would rise on average about 0.8 percent. Most of the cost of major surgeries like hip replacements go to the doctor and hospital, not the artificial device, but let’s say that half of the cost is the device itself.
This means that the cost of your hip replacement surgery will rise by a whopping 0.4 percent as a result of the Trump tariffs! The NYT should look for some better ammunition if it wants to seriously push its case.
Addendum
Robert Salzberg points out to me that if the artificial hip itself were produced in China, then the price increase resulting from the tariff would be 25 percent on the implant, not 0.8 percent as I assume above. In this post, I assumed that implants are as likely to be produced in China as medical equipment more generally, but Robert’s point is worth noting.
He also points me to an old NYT piece on medical travel, which gives the price of manufacturing an implant at $350 in the United States and $150 in Asia. This piece gives further evidence that any increases in the price of implants from China due to the tariff will be virtually invisible in the cost of the procedure.
It is also yet another reminder of the enormous potential gains from free trade in medical travel. If any of our politicians actually supported free trade, the gains from setting up an institutional structure (i.e. rules for insurers and malpractice) to facilitate medical travel would swamp the gains from trade deals like NAFTA and the TPP. Unfortunately, most politicians are staunchly protectionist when it comes to measures that might reduce the income of doctors, hospitals, and medical equipment manufacturers. They only are interested in reducing trade barriers when most of the losers are less-educated and less politically powerful workers.
Read More Leer más Join the discussion Participa en la discusión
I guess “terrific” doesn’t mean what it used to mean. According to the Washington Post, the average monthly before-subsidy premium for a plan purchased in the health care exchanges was $621, an increase of 30 percent from 2017. For some reason, this rise in premiums doesn’t seem to be getting as much attention as the increase in premiums while President Obama was still in office.
I guess “terrific” doesn’t mean what it used to mean. According to the Washington Post, the average monthly before-subsidy premium for a plan purchased in the health care exchanges was $621, an increase of 30 percent from 2017. For some reason, this rise in premiums doesn’t seem to be getting as much attention as the increase in premiums while President Obama was still in office.
Read More Leer más Join the discussion Participa en la discusión
I would agree with pretty much all of Paul Krugman’s criticisms of Donald Trump’s trade war with China, but I would strongly disagree with one of his criticisms of China. He tells readers:
“In some ways, China really is a bad actor in the global economy. In particular, it has pretty much thumbed its nose at international rules on intellectual property rights, grabbing foreign technology without proper payment.”
The issue here is who set the rules and what is proper payment.
The problem is that it was largely the United States that has set the rules in this story and it is demanding ever more money for items protected by its patent and copyright monopolies. We do this through our control of trade arrangements, most importantly the WTO where we had the TRIPS provisions inserted as a late entry to the Uruguay Round that was concluded in 1994. These rules were about forcing developing countries to pay more money to companies like Pfizer and Microsoft for everything from drugs and medical equipment to seeds and software. It shouldn’t be surprising that developing countries like China might not like these rules.
The idea that developing countries would seek to get around rules established by their richer counterparts should not be alien to people in the United States. The United Kingdom had made it illegal to transfer blueprints for steam engines out of the country in order to preserve its competitive advantage. Francis Lowell famously memorized plans on a trip there in order to build the first steam-powered factory in the United States. The United States refused to recognize UK copyrights for much of the 19th century. So if China is not following the rules today, it has an important role model it can point to.
There is certainly a valid point that the cost of innovation must in some way be shared internationally. Certainly, the US shouldn’t be expected to foot the bill for the whole world. But does Krugman really want to argue that patent and copyright monopolies are the most efficient mechanisms available? We should be looking for more modern mechanisms that focus on sharing rather than bottling up knowledge, with China and other developing countries having a serious voice in their construction.
On this topic, it is important to note that China may have fired a serious shot over the bow this week. It announced a major initiative to promote the manufacture and use of generic drugs. I have no idea if this has anything to do with Donald Trump’s trade war, but this could be a very big deal if China is going to be aggressively pushing generic drugs both in its domestic market and internationally. The fact is, the “rules” in many areas are not very clear (it is much harder to get a patent on a drug in India than the United States) and if China is going to press the boundaries, look for a really big hit to Pfizer and Merck’s stock prices.
I would agree with pretty much all of Paul Krugman’s criticisms of Donald Trump’s trade war with China, but I would strongly disagree with one of his criticisms of China. He tells readers:
“In some ways, China really is a bad actor in the global economy. In particular, it has pretty much thumbed its nose at international rules on intellectual property rights, grabbing foreign technology without proper payment.”
The issue here is who set the rules and what is proper payment.
The problem is that it was largely the United States that has set the rules in this story and it is demanding ever more money for items protected by its patent and copyright monopolies. We do this through our control of trade arrangements, most importantly the WTO where we had the TRIPS provisions inserted as a late entry to the Uruguay Round that was concluded in 1994. These rules were about forcing developing countries to pay more money to companies like Pfizer and Microsoft for everything from drugs and medical equipment to seeds and software. It shouldn’t be surprising that developing countries like China might not like these rules.
The idea that developing countries would seek to get around rules established by their richer counterparts should not be alien to people in the United States. The United Kingdom had made it illegal to transfer blueprints for steam engines out of the country in order to preserve its competitive advantage. Francis Lowell famously memorized plans on a trip there in order to build the first steam-powered factory in the United States. The United States refused to recognize UK copyrights for much of the 19th century. So if China is not following the rules today, it has an important role model it can point to.
There is certainly a valid point that the cost of innovation must in some way be shared internationally. Certainly, the US shouldn’t be expected to foot the bill for the whole world. But does Krugman really want to argue that patent and copyright monopolies are the most efficient mechanisms available? We should be looking for more modern mechanisms that focus on sharing rather than bottling up knowledge, with China and other developing countries having a serious voice in their construction.
On this topic, it is important to note that China may have fired a serious shot over the bow this week. It announced a major initiative to promote the manufacture and use of generic drugs. I have no idea if this has anything to do with Donald Trump’s trade war, but this could be a very big deal if China is going to be aggressively pushing generic drugs both in its domestic market and internationally. The fact is, the “rules” in many areas are not very clear (it is much harder to get a patent on a drug in India than the United States) and if China is going to press the boundaries, look for a really big hit to Pfizer and Merck’s stock prices.
Read More Leer más Join the discussion Participa en la discusión
I am Dawn Niederhauser, CEPR’s Director of Development, and I am highjacking Beat the Press to make an important announcement. Many of you regular readers of Beat the Press may have received an email from me about this, but in case you missed the news, I am writing to let you know that there is a new way to support Dean and Beat the Press!
As you may know, Dean stepped down as CEPR’s Co-Director in January so that he could devote more time to his writing. We are thrilled that he will continue to “beat the press” in his new position as a CEPR Senior Economist. And as CEPR’s Director of Development, I am particularly thrilled that he has agreed to provide additional commentary via the Beat the Press page on Patreon.
For those of you who are not familiar with Patreon, it is a membership platform that provides tools for creators to run a subscription content service. It allows writers and artists (and even economists!) to provide exclusive content to their subscribers, or “patrons.” Anyone who signs up to support Beat the Press via Patreon will have access to additional commentary and will be able to engage with other subscribers and with Dean. But the main purpose is to provide ongoing financial support for Beat the Press.
Click here to support Beat the Press on Patreon!
Beat the Press will continue in its current format and will be free to all, as always. Dean has always made my job really difficult by insisting that all of CEPR’s content, even his books, be available for free. So we are mindful that offering any content that is only available to subscribers could be seen as going against precedent.
But honestly? Times are tough. CEPR has relied on foundation funding for the bulk of its operating costs since its inception. Foundation funding is becoming harder and harder to come by. We are looking to find ways to expand our funding base. After evaluating all the options, we decided that Patreon was the best avenue for creating a dedicated funding stream for Beat the Press. That seemed to us to be a “fair trade.”
For those of you who are already monthly sustainers and want to switch to supporting Beat the Press through Patreon, please send an email to [email protected] and I will cancel your monthly donation. You can then sign up to support Beat the Press on Patreon, at any amount. The more you pledge, the more resources Dean will have to skewer the likes of Robert Samuelson.
A big thank you to those of you who have already signed up to become Beat the Press patrons! We really appreciate your support.
Okay, back to your regularly scheduled programming. And remember, don’t believe everything you read in the newspapers.
I am Dawn Niederhauser, CEPR’s Director of Development, and I am highjacking Beat the Press to make an important announcement. Many of you regular readers of Beat the Press may have received an email from me about this, but in case you missed the news, I am writing to let you know that there is a new way to support Dean and Beat the Press!
As you may know, Dean stepped down as CEPR’s Co-Director in January so that he could devote more time to his writing. We are thrilled that he will continue to “beat the press” in his new position as a CEPR Senior Economist. And as CEPR’s Director of Development, I am particularly thrilled that he has agreed to provide additional commentary via the Beat the Press page on Patreon.
For those of you who are not familiar with Patreon, it is a membership platform that provides tools for creators to run a subscription content service. It allows writers and artists (and even economists!) to provide exclusive content to their subscribers, or “patrons.” Anyone who signs up to support Beat the Press via Patreon will have access to additional commentary and will be able to engage with other subscribers and with Dean. But the main purpose is to provide ongoing financial support for Beat the Press.
Click here to support Beat the Press on Patreon!
Beat the Press will continue in its current format and will be free to all, as always. Dean has always made my job really difficult by insisting that all of CEPR’s content, even his books, be available for free. So we are mindful that offering any content that is only available to subscribers could be seen as going against precedent.
But honestly? Times are tough. CEPR has relied on foundation funding for the bulk of its operating costs since its inception. Foundation funding is becoming harder and harder to come by. We are looking to find ways to expand our funding base. After evaluating all the options, we decided that Patreon was the best avenue for creating a dedicated funding stream for Beat the Press. That seemed to us to be a “fair trade.”
For those of you who are already monthly sustainers and want to switch to supporting Beat the Press through Patreon, please send an email to [email protected] and I will cancel your monthly donation. You can then sign up to support Beat the Press on Patreon, at any amount. The more you pledge, the more resources Dean will have to skewer the likes of Robert Samuelson.
A big thank you to those of you who have already signed up to become Beat the Press patrons! We really appreciate your support.
Okay, back to your regularly scheduled programming. And remember, don’t believe everything you read in the newspapers.
Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
Donald Trump has proved the skeptics wrong, it seems that the American people stand to be big winners as a result of his trade war. The Chinese government announced a major initiative to promote the manufacture and use of generic drugs.
The reason this is potentially a big deal for the United States is that it could mean that China intends to push the envelope in replacing drugs protected by government-granted patent monopolies with drugs sold at free market prices. While the TRIPS provisions of the WTO do require members to respect patents and copyrights, there are flexibilities, such as compulsory licensing, to allow far more competition that what we see in the United States market.
Countries also have varying rules on what items can be patented. For example, India has far more stringent patent rules than the United States so that many drugs that are protected by patents in the US are sold in a free market in India.
This can matter hugely for people in the United States, since if China joins India as a mass producer of high-quality generic drugs, it will become increasingly difficult for the US drug companies to maintain an island of protected prices in the United States. The gap between the patent-protected price for drugs like the Hepatitis C drug Solvaldi and new cancer drugs is often more than 100 to 1 (equivalent to a 10,000 percent tariff) and can be as much as 1000 to 1.
There is an enormous amount of money at stake (in addition to people’s health) if we can get drugs at their free market price. We will spend more than $450 billion this year on prescription drugs that would likely sell for less than $80 billion in a free market. The difference of $370 billion is almost 2.0 percent of GDP. It is more than five times the entire food stamp budget.
We will need to have alternative mechanisms for financing the research and development of new drugs and having these costs shared internationally. But it is not difficult to develop mechanisms that are more efficient than the anachronistic patent monopoly system. If Trump’s trade war ends pushing us in this direction, the whole world will have won.
Donald Trump has proved the skeptics wrong, it seems that the American people stand to be big winners as a result of his trade war. The Chinese government announced a major initiative to promote the manufacture and use of generic drugs.
The reason this is potentially a big deal for the United States is that it could mean that China intends to push the envelope in replacing drugs protected by government-granted patent monopolies with drugs sold at free market prices. While the TRIPS provisions of the WTO do require members to respect patents and copyrights, there are flexibilities, such as compulsory licensing, to allow far more competition that what we see in the United States market.
Countries also have varying rules on what items can be patented. For example, India has far more stringent patent rules than the United States so that many drugs that are protected by patents in the US are sold in a free market in India.
This can matter hugely for people in the United States, since if China joins India as a mass producer of high-quality generic drugs, it will become increasingly difficult for the US drug companies to maintain an island of protected prices in the United States. The gap between the patent-protected price for drugs like the Hepatitis C drug Solvaldi and new cancer drugs is often more than 100 to 1 (equivalent to a 10,000 percent tariff) and can be as much as 1000 to 1.
There is an enormous amount of money at stake (in addition to people’s health) if we can get drugs at their free market price. We will spend more than $450 billion this year on prescription drugs that would likely sell for less than $80 billion in a free market. The difference of $370 billion is almost 2.0 percent of GDP. It is more than five times the entire food stamp budget.
We will need to have alternative mechanisms for financing the research and development of new drugs and having these costs shared internationally. But it is not difficult to develop mechanisms that are more efficient than the anachronistic patent monopoly system. If Trump’s trade war ends pushing us in this direction, the whole world will have won.
Read More Leer más Join the discussion Participa en la discusión
As a long-term columnist at the NYT, Thomas Friedman apparently never feels the need to know anything about the topics on which he writes. This explains his sarcastic speculation that Putin could be a CIA agent since he has done so much to hurt Russia.
For all his authoritarian tendencies, it is likely that most Russians think primarily about Putin’s impact on the economy, just as is typically the case among voters in the United States. On that front, Putin has a very good record.
According to data from the I.M.F. Russia’s economy had plunged in the 1990s under the Yeltsin presidency. When Putin took over in 1998, per capita income in the country had shrunk by more than 40 percent from its 1990 level. This is a far sharper downturn than the United States saw in the Great Depression. Since Putin took power its per capita income has risen by more than 115 percent, an average annual growth rate of more than 3.9 percent.
While this growth has been very unequal, that was also the case even as Russia’s economy was collapsing under Yeltsin. The typical Russian has done hugely better in the last two decades under Putin than they did in the period when Yeltsin was in power.
For this reason, there are probably few Russians who would have sympathy for Friedman’s speculation about Putin’s ties to the CIA. The same would not be the case for Boris Yeltsin.
As a long-term columnist at the NYT, Thomas Friedman apparently never feels the need to know anything about the topics on which he writes. This explains his sarcastic speculation that Putin could be a CIA agent since he has done so much to hurt Russia.
For all his authoritarian tendencies, it is likely that most Russians think primarily about Putin’s impact on the economy, just as is typically the case among voters in the United States. On that front, Putin has a very good record.
According to data from the I.M.F. Russia’s economy had plunged in the 1990s under the Yeltsin presidency. When Putin took over in 1998, per capita income in the country had shrunk by more than 40 percent from its 1990 level. This is a far sharper downturn than the United States saw in the Great Depression. Since Putin took power its per capita income has risen by more than 115 percent, an average annual growth rate of more than 3.9 percent.
While this growth has been very unequal, that was also the case even as Russia’s economy was collapsing under Yeltsin. The typical Russian has done hugely better in the last two decades under Putin than they did in the period when Yeltsin was in power.
For this reason, there are probably few Russians who would have sympathy for Friedman’s speculation about Putin’s ties to the CIA. The same would not be the case for Boris Yeltsin.
Read More Leer más Join the discussion Participa en la discusión
Jeff Stein’s Wonkblog piece might have misled readers about the complexity of New York’s new employer-side payroll tax as a workaround for Republican tax bill’s limit on the deduction for state and local taxes. The piece told readers:
“‘Employers can’t just slash salaries willy-nilly, even if there’s a good argument for it being to the employees’ benefit,’ wrote Jared Walczak of the Tax Foundation, a right-leaning think tank. ‘It might be an option for small groups of highly-compensated employees — think hedge funds and consultancies — but it’s a tough sell for a larger operation with a more diverse workforce.'”
While the logic is that an employer-side payroll tax reduces wages by a roughly equal amount, the one put forward by Governor Cuomo is unlikely to result in anyone getting a pay cut. The tax is phased in at a rate of 1 percent in 2018, and then 2 percent in both 2019 and 2020. Wages are rising an average of 2.5 percent annually. This is an average for all workers, the pay for workers who stay at the same employer is rising by more than 3.0 percent annually.
This means that workers at employers paying the tax are likely to see smaller wage gains rather than actual cuts. The Cuomo administration was quite conscious of this issue in designing the tax. (I had some discussions with Cuomo’s staff on the tax plan.)
While this plan has been described as too complicated it is much simpler than the Flexible Savings Account (FSA), which have proven very popular with employees. These accounts require lots of bookkeeping and also put workers at risk of losing unspent money. By contrast, the employer-side payroll tax is simply a one-time adjustment to workers’ pay.
It also allows for much larger potential savings than an FSA. A person earning $200,000 a year can save more than $3,000 a year on their taxes if their employer takes advantage of the employer-side payroll tax option. This is about four times as much as the maximum they can save on an FSA.
Jeff Stein’s Wonkblog piece might have misled readers about the complexity of New York’s new employer-side payroll tax as a workaround for Republican tax bill’s limit on the deduction for state and local taxes. The piece told readers:
“‘Employers can’t just slash salaries willy-nilly, even if there’s a good argument for it being to the employees’ benefit,’ wrote Jared Walczak of the Tax Foundation, a right-leaning think tank. ‘It might be an option for small groups of highly-compensated employees — think hedge funds and consultancies — but it’s a tough sell for a larger operation with a more diverse workforce.'”
While the logic is that an employer-side payroll tax reduces wages by a roughly equal amount, the one put forward by Governor Cuomo is unlikely to result in anyone getting a pay cut. The tax is phased in at a rate of 1 percent in 2018, and then 2 percent in both 2019 and 2020. Wages are rising an average of 2.5 percent annually. This is an average for all workers, the pay for workers who stay at the same employer is rising by more than 3.0 percent annually.
This means that workers at employers paying the tax are likely to see smaller wage gains rather than actual cuts. The Cuomo administration was quite conscious of this issue in designing the tax. (I had some discussions with Cuomo’s staff on the tax plan.)
While this plan has been described as too complicated it is much simpler than the Flexible Savings Account (FSA), which have proven very popular with employees. These accounts require lots of bookkeeping and also put workers at risk of losing unspent money. By contrast, the employer-side payroll tax is simply a one-time adjustment to workers’ pay.
It also allows for much larger potential savings than an FSA. A person earning $200,000 a year can save more than $3,000 a year on their taxes if their employer takes advantage of the employer-side payroll tax option. This is about four times as much as the maximum they can save on an FSA.
Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
