Foundry Quiz: What Medical Innovations Does The Senate Health Bill Tax? » The Foundry

Foundry Quiz: What Medical Innovations Does The Senate Health Bill Tax? » The Foundry

It is a well known economic policy rule that if you want less of something you tax it, and if you want more of something you subsidize it. Policymakers frequently follow this rule to influence behavior. This is why there are “sin taxes” on things like alcohol and cigarettes, and also why “cap and trade” taxes carbon. This is why there are subsidies for education and for “green” technologies. If taxes and subsidies make any sense at all, they make sense when used to tax “bad” things and subsidize “good” things.

Given this basic rule, can you guess which of these are being subsidized and which taxed in the Reid Health Bill currently in the Senate?

1. Innovative Medical Companies
2. Medical Devices, such as prosthetic limbs, wheelchairs and pacemakers
3. Over-the-counter medicines
4. Privately funded medical care – including private health insurance plans, private medical expenses paid out-of-pocket, and employer-provided care

(answers below the fold)

All of these are being taxed.