{"id":54,"date":"2018-08-14T15:42:37","date_gmt":"2018-08-14T14:42:37","guid":{"rendered":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/?p=54"},"modified":"2019-03-18T06:29:31","modified_gmt":"2019-03-18T06:29:31","slug":"public-finance-and-public-health","status":"publish","type":"post","link":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/2018\/08\/14\/public-finance-and-public-health\/","title":{"rendered":"Public finance and public health"},"content":{"rendered":"

I have argued for many years<\/a> that public finance is a public health issue.\u00a0 Against the odds, this view appears to be gaining credence.\u00a0 The Disease Control Priorities Project<\/a> is a massive effort to identify the most \u2018cost-effective\u2019 options for improving health, funded by the Bill and Melinda Gates Foundation and organised by the World Bank.\u00a0 The authors of a summary of its nine volumes of recommendations argued that<\/a> \u2018[i]n all likelihood, the finance ministry is the most important ministry (after health) for improving population health\u2019.\u00a0 Their argument related mainly to the options for taxing such health-destructive commodities as sugary drinks, while reducing subsidies on fossil fuels.\u00a0 These are all laudable and important objectives, but we must go further.\u00a0 Finance ministries are the most important<\/em> ministries for improving population health \u2013 first, because they determine the budgets available to health ministries; second, because their policies determine the capacity of governments to meet health-related economic and social policy objectives (through taxation) and the distribution of the benefits of those policies (through their expenditure priorities).<\/p>\n

In the United Kingdom, since 2010 we have witnessed an especially striking illustration of this point.\u00a0 Tax and benefit policy changes have substantially reduced<\/a> the incomes of those households near the bottom of the economic distribution, with minimal impact on those near the top. \u00a0Food bank use<\/a> has increased sharply, and this is almost certainly only the tip of the health impact iceberg; the most deprived local authorities, which derive much of their income from central government, have been hit hardest<\/a> by budget cuts and are closing libraries<\/a> and preventive services like smoking cessation<\/a>, even as the National Health Service simultaneously cuts back on stop-smoking prescriptions<\/a>.\u00a0 Indeed, the NHS as a whole is in a state of continued crisis<\/a> because of government\u2019s unwillingness to provide adequate funding from general tax revenues.\u00a0 Meanwhile, corporate tax policy allows firms like Amazon to pay minimal taxes in the UK<\/a>, even as their low operating costs \u2013 thanks to a perverse structure of business rates (taxes) \u2013 contributes to the destruction of high street retail.\u00a0 This is likely to have at least indirect health consequences, for example as town centre dwellers whose age, abilities or finances mean they cannot hop in the car and drive to a suburban shopping park lose \u2018control over destiny\u2019<\/a>.<\/p>\n

\"\"<\/p>\n

Against this background, central government continues to commit tens of billions of pounds to megaprojects like high speed intercity rail lines<\/a> and foreign-built atomic power stations<\/a>.\u00a0 (Since this posting was written, George Monbiot has pointed out<\/a> in The Guardian\u00a0<\/em>that a motorway from Oxford to Cambridge<\/a> is likely to be added to the craziness.)\u00a0 If the World Health Organization\u2019s important message of health in all policies<\/a> had been taken seriously, at the very least we would have independent, peer-reviewed health impact assessments of these expenditures, including<\/em> alternative uses of the funds committed and of the \u2018do nothing\u2019 option.\u00a0 Based on decades of experience with environmental impact assessments, these are essential.\u00a0 Such assessments are nowhere to be found; health economists\u2019 ritual incantation that resources are limited so priorities must be set clearly does not apply here.<\/p>\n

All this will be familiar even to casual observers of UK politics, and has parallels elsewhere, although the public health community has too often remained silent about them.\u00a0 At the same time, once-radical perspectives on the revenue side of the fiscal policy equation are moving into the mainstream of policy analysis, if not yet of politics. \u00a0In 2013, the former head of Canada\u2019s national public service and his son published a powerful edited volume called Tax is Not a Four-letter Word<\/em><\/a>, and decried Canada\u2019s \u2018dangerously distorted tax conversation\u2019<\/a> \u2013 sadly, to little effect.\u00a0 In February 2018, The Economist<\/em> warned<\/a> that \u2018[I]f Britons want good public services\u2019 as an alternative to the current collapse, then \u2018they will need to pay more\u2019 and hinted at the need for some form of wealth taxation. \u00a0In August, it was more explicit.\u00a0 A leader noted<\/a> that \u2018Amazon\u2019s British subsidiary paid \u00a31.7m ($2.2m) in tax last year, on profits of \u00a372 m\u2019 \u2013 an effective tax rate of less than three percent.\u00a0 The leader also foregrounded the need to tax windfall gains from rising property values \u2018in big, global cities\u2019 \u2013 which without an effective inheritance tax regime will magnify economic inequalities across generations – \u00a0and to reform corporate tax regimes to address the ability of firms like Amazon to shift their revenues to low-tax jurisdictions.\u00a0 Further, it noted that \u2018[a]s the labour market continues to polarize between high earners and everyone else\u2019, with labour\u2019s share of national income in much of the world in a decades-long decline<\/a>, \u2018income taxes should be low or negative for the lowest earners\u2019.\u00a0 A briefing in the same issue explores one intriguing option<\/a> \u2013 a land value tax, which would capture windfall gains in prosperous areas \u2013 in considerable detail. \u00a0(Today, taxes on residential property in England and Scotland are assessed on real or hypothetical value in 1991, with a capped \u2018top band\u2019 that corresponds to just a small fraction of today\u2019s seven- and eight-figure prices.)<\/p>\n

Unfortunately, The Economist<\/em> did not extend its analysis to such policy options as comprehensive wealth taxation or higher marginal tax rates and alternative minimum taxes on high-income individuals. \u00a0Nevertheless, its critical attention to public finance offers the possibility that \u2018distorted tax conversations\u2019 may become less so \u2013 offering prospects for reducing health inequalities by way of their essential economic substrate.\u00a0 In these grim and disturbing times, we must seek faint hope where we can.<\/p>\n

This posting appears as well on Policies for Equitable Access to Health<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

I have argued for many years that public finance is a public health issue.\u00a0 Against the odds, this view appears to be gaining credence.\u00a0 The Disease Control Priorities Project is a massive effort to identify the most \u2018cost-effective\u2019 options for … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1834,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[4,2,5,6,3],"class_list":["post-54","post","type-post","status-publish","format-standard","hentry","category-uncategorised","tag-austerity","tag-public-finance","tag-public-health","tag-retail","tag-taxation"],"_links":{"self":[{"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/posts\/54","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/users\/1834"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/comments?post=54"}],"version-history":[{"count":6,"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/posts\/54\/revisions"}],"predecessor-version":[{"id":104,"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/posts\/54\/revisions\/104"}],"wp:attachment":[{"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/media?parent=54"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/categories?post=54"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.ncl.ac.uk\/theodoreschrecker\/wp-json\/wp\/v2\/tags?post=54"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}