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Shopping At The Irs Mall Essay

648 words - 3 pages

SHOPPING AT THE IRS MALL In the article the economic point that was made was similar to the welfare situation we were discussing in class. The article states that an employer can increase his employees salaries by $5000.00 which more than half of that amount can go to taxes or offer him/her medical benefits and which will suit the employee better because he keeps all the money and not just half. Well this exactly like the welfare situation because in our mind we think that the money will go for food and only for food but as economist say who are we to decide where and how the money should be spent. The point is that receiving half the money is more productive in the employees mind than pretending all the money will go for health care. The employee's happiness is greater with the cash then it would be the health benefits. Especially if all you can get with the money is health care and even with that one realizes that more half of the money will end up to waste. Another point that was not discussed in the article but might be valid is maybe in a family the other spouse can have health care benefits through their job therefore receiving health care benefits is unnecessary. (Refer to graph on A-1).The economic importance of this is that in reality the employees are not even getting the $5000.00 worth of benefits that is being pretended. The inflation that comes with health care is far greater than the Consumer Price Index. The reason that is, according to the article is that "95% of the mandated health coverage we pay will end up as a waste". By thinking he/she is receiving double of what was expected can causes inflation and by thinking he has so much health care it can encourage unnecessary use of the service.Another issue that needs to be discussed is that the...

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