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How Would Medicare for All Affect Health System Capacity? Evidence from Medicare for Some
Jeffrey Clemens, University of California, San Diego and NBER
Joshua D. Gottlieb, University of Chicago and NBER
Jeffrey Hicks, University of British Columbia

Proposals to create a national health care plan such as "Medicare for All" rely heavily on reducing the prices that insurers pay for health care. These changes affect physicians' short-run incentives for care provision and may also change health care providers' incentives to invest in capacity, thereby influencing the availability of care in the long term. Clemens, Gottlieb, and Hicks provide evidence on these responses using a major Medicare payment change combined with survey data on physicians' time use. The researchers find evidence that physicians increase their time spent on capacity building when remuneration increases, and that they are subsequently more willing to accept new patients--especially those who may be the residual claimants on marginal capacity. These forces imply that short-run supply curves likely differ from long-run supply curves. Policymakers need to account for how major changes to payment incentives would influence the investments that determine health system capacity.


This paper was distributed as Working Paper 28062, where an updated version may be available.

Designing, not Checking, for Policy Robustness: An Example with Optimal Taxation
Benjamin Lockwood, University of Pennsylvania and NBER
Afras Y. Sial, University of Pennsylvania
Matthew C. Weinzierl, Harvard University and NBER

Economists typically check the robustness of their results by comparing them across plausible ranges of parameter values and model structures. A preferable approach to robustness -- for the purposes of policymaking and evaluation --is to design policy that takes these ranges into account. Lockwood, Sial, and Weinzierl modify the standard optimal income tax model to include the policymaker's subjective uncertainty over parameter values, and they characterize robust optimal policy as that which maximizes expected social welfare. After calibrating uncertainty over the elasticity of taxable income from past empirical work and novel survey data on economists' beliefs, the researchers compare the implied robust optimal marginal tax rates to the alternative benchmark policy based on the best point estimates of relevant parameters. Their results suggest that robust optimal marginal tax rates are typically more progressive than in benchmark analyses, raising top marginal tax rates by between 5 and 7 percentage points, and generating modest expected welfare gains.


This paper was distributed as Working Paper 28098, where an updated version may be available.

The Effects of the Affordable Care Act on the Near Elderly: Evidence on Health Insurance Coverage and Labor Market Outcomes
Mark Duggan, Stanford University and NBER
Gopi Shah Goda, Stanford University
Gina Li, Stanford University

The Affordable Care Act (ACA) not only changed the landscape of health insurance coverage in the United States, but also affected the relationship between working decisions and health insurance. In this paper, Duggan, Goda, and Li estimate the impact of the ACA on the near-elderly (ages 60-64) in the five years after the implementation of its key provisions in early 2014. The researchers exploit variation across geographic areas in the pre-existing level of uninsurance and use 65-69 year olds, whose insurance coverage was unaffected by the ACA, as a within-region control group. Their findings indicate that the ACA increased health insurance coverage among the near elderly by 4.2 percentage points and reduced their labor force participation rate by 0.6 percentage points.

This paper was distributed as Working Paper 27936, where an updated version may be available.

Estimating the Costs of Filing Tax Returns and the Potential Savings from Policies Aimed at Reducing These Costs
Youssef Benzarti, University of California, Santa Barbara and NBER

This paper estimates the cost of filing taxes and assesses several policy proposals aimed at reducing these costs. Using US tax returns, a quasi-experimental method and additional extrapolations based on survey evidence, Benzarti uncovers three main findings. First, filing costs are large and have been steadily increasing over time. Second, part of this increase in filing costs can be attributed to an increase in the number of schedules filed per taxpayer. Third, pre-populating tax returns and offering free filing options can result in substantial cost savings for taxpayers.


This paper was distributed as Working Paper 27946, where an updated version may be available.

The Structure of Business Taxation in China
Zhao Chen, Fudan University
Yuxuan He, Duke University
Zhikuo Liu, Fudan University
Juan Carlos Suárez Serrato, Duke University and NBER
Daniel Xu, Duke University and NBER

This paper documents facts about the structure of business taxation in China using administrative tax data from 2007 to 2011 from the State Taxation Administration. Chen, He, Liu, Suárez Serrato, and Xu first document the importance of different business taxes across industries. While corporate income taxes play an important role for manufacturing firms, these firms also remit a large share of their tax payments through the value-added tax system, through the excise tax system and through payroll taxes. Gross receipts taxes play an important role for firms in other industries, leading to spillovers that may affect the overall economy. Second, the researchers evaluate whether the structure of China's tax revenue matches its stage of development. A cross-country comparison of sources of government revenue shows that China collects a high share of tax revenue from taxes on goods and services and a high share of income tax on corporations. Finally, they study whether firm-level differences in effective tax rates can be an important source of allocative inefficiencies. Decomposing the variation in effective tax rates across firms, Chen, He, Liu, Suárez Serrato, and Xu find that government policies, including loss carry-forward provisions and preferential policies for regional, foreign, small, and high-tech firms, have significant explanatory power. Nonetheless, while effective tax rates vary along a number of dimensions, tax policy does not explain the large dispersion in the returns to factors of production across firms.


This paper was distributed as Working Paper 28051, where an updated version may be available.

Employment Effects of the Earned Income Tax Credit: Taking the Long View
Diane Whitmore Schanzenbach, Northwestern University and NBER
Michael R. Strain, American Enterprise Institute

The Earned Income Tax Credit (EITC) is the cornerstone U.S. anti-poverty program, typically lifting over 5 million children out of poverty each year. Targeted to low-income households with children, and only available to those who work, the EITC includes strong incentives for nonworkers to become employed. Most of the existing economics literature focuses on federal EITC expansions in the 1980s and 1990s. This paper takes a longer view, studying all federal expansions since the program’s inception in 1975. Schanzenbach and Strain find robust evidence that EITC expansions increases the extensive margin of labor supply.


This paper was distributed as Working Paper 28041, where an updated version may be available.


Hannah J. Acheson-Field, RAND Corporation
Senay Agca, George Washington University
Andrew Austin, Congressional Research Service
Jennifer Beckman, International Monetary Fund
Niloy Bose, Virginia Tech
Peter Brady, Investment Company Institute
Ike Brannon, Capital Policy Analytics
Edith Brashares, Department of the Treasury
David Brazell, Department of the Treasury
Lucia Buono, International Monetary Fund
David Cashin, Federal Reserve Board
Lilia Chaidez, General Accounting Office
Chia Chang, Joint Committee on Taxation
Sharmila Choudhury, Congressional Research Service
James Cilke, Joint Committee on Taxation
Alan Cohen, Senate Finance Committee
Adam Cole, Department of the Treasury
David Coyne, Department of the Treasury
Catherine Crato, Department of the Treasury
Patricia Davis, Congressional Research Service
Tim Dowd, Joint Committee on Taxation
Patrick Driessen, Half Retired
Alex J. Durante, Tax Foundation
Erin E. Ferris, Federal Reserve Board
Glenn Follette, Federal Reserve Board
Jonathan Forman, University of Oklahoma
Vanessa Forsberg, Congressional Research Service
Chloe Gagin, Internal Revenue Service
Brian Galle, Georgetown University
Yi Geng, Government of the District of Columbia
Robert Gillette, Department of the Treasury
Stephen Goss, Social Security Administration
George Guttman, Government Accountability Office
Kwabena Gyimah-Brempong, National Science Foundation
Bilal Habib, Congressional Budget Office
Sameh Habib, Joint Committee on Taxation
Keith Hall, Congressional Budget Office
Joseph Hancuch, Department of the Treasury
Zheli He, University of Pennsylvania
Elayne J. Heisler, Congressional Research Service
Bobby Hodges, Internal Revenue Service
Janet Holtzblatt, Tax Policy Center
Gillian Hunter, Department of the Treasury
Sebastian James, The World Bank
Scott Jaquette, Department of the Treasury
Ben Klemens, Department of the Treasury
Laura Konda, Department of the Treasury
Sally Kwak, Joint Committee on Taxation
Joseph LeCates, Joint Committee on Taxation
Junghoon Lee, Congressional Budget Office
Greg Leiserson, Council of Economic Advisers
Allen Lerman, retired
LeAnn Luna, University of Tennessee
Jamie McGuire, Joint Committee on Taxation
Thomas Miller, American Enterprise Institute
Shannon Mok, Congressional Budget Office
Rachel Moore, Joint Committee on Taxation
Edward Nannenhorn, Government Accountability Office
Narine Nersesyan, International Monetary Fund
Michael O'Neill, Government Accountability Office
Bianca Onwukwe, Department of the Treasury
Victoria I. Osorio, University of Pennsylvania
Jose Oyola, Government Accountability Office
Brandon Pecoraro, Joint Committee on Taxation
John Ricco, University of Pennsylvania
Zachary Richards, Joint Committee on Taxation
Joe Rosenberg, Congressional Budget Office
Carmen Sánchez Cumming, Washington Center for Equitable Growth
Molly Saunders-Scott, Congressional Budget Office
Donald F. Schneider, Cornerstone Macro
Jason Seligman, Investment Company Institute
Jennifer Shand, Congressional Budget Office
Maxim Shvedov, AARP
Naveen Singhal, Congressional Budget Office
Stacy Sneeringer, Department of the Treasury
Ellen Steele, Congressional Budget Office
Jamie Taber, Office of Management and Budget
Michael E. Weber, Internal Revenue Service
Joann M. Weiner, George Washington University
Gal Wettstein, Boston College
Arlynn Q. White, Department of the Treasury
Elwood White, Government Accountability Office
Jim Williamson, Congressional Budget Office
Jeffrey Wrase, Senate Finance Committee
Lin Xu, Joint Committee on Taxation
Erica York, Tax Foundation

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