Goodman Institute for Public Policy
The Goodman Institute is a public policy research think tank founded in 2015. The organization is virtual; that is, its goal is to find the best scholars in the academic and scholarly world in key public policy areas and form a partnership with them. Institute scholars have been working with members of Congress on health reform and tax reform. It has also produced research on entitlement programs and is beginning a new program on environmental issues.
The budget for 2017 is approximately $1 million.
History[edit]
The organization was founded by John Goodman who is best known as a health economist. In 1983, Goodman founded the National Center for Policy Analysis (NCPA) and served as its president for 31 years.The NCPA closed in July 2017 and many of the scholars who were previously associated with it are now involved with the Goodman Institute. Under “Our Accomplishments,” the organization’s website lists Health Savings Accounts, Roth IRAs, automatic enrollment in 401(k) plans and the ability of seniors to receive Social Security benefits without penalty if they keep on working. Many of these accomplishments were produced by Goodman and his colleagues while they were at the NCPA.
Tax Center[edit]
The Republican tax plan proposed by Speaker of the House Paul Ryan and House Ways and Means Committee Chairman Kevin Brady is based on the ideas of two Goodman institute scholars: Laurence Kotlikoff and Alan Auerbach. Kotlikoff is the William Fairfield Warren Professor at Boston University. Auerbach is the Robert D. Burch Professor of Economics and Law at Berkeley. In July, 2017 Kotlikoff conducted a Capitol Hill Briefing on the plan, sponsored by Chairman Brady. The briefing shared the latest research results of the economists and their colleagues.[1]
One of the most contentious issues in corporate tax reform is: who gains as a result? The answer to that question is very dependent on who pays the corporate income tax – an issue that has historically been unclear to economists because of inadequacy of the tools needed to answer it. However, in a 2013 National Bureau of Economics Research (NBER) Working Paper, Kotlikoff and his colleagues found that the corporate tax is almost totally borne by workers, not shareholders.[2] In a New York Times editorial Kotlikoff argued that workers would be the biggest gainers if we abolished the corporate income tax altogether.[3]
That conclusion was reaffirmed in another study by Kotlikoff and Auerbach.[4] As a result, a cash flow tax with a labor carve out, such as proposed by the House Republicans, is actually quite progressive. It replaces a tax on labor with a tax on wealth. In fact, Kotlikoff and Auerbach find that the entire House GOP proposal (corporate plus individual income tax reform) has very little impact on the overall distribution of consumption across income groups. In a Wall Street Journal editorial, Kotlikoff argued that Democrats and liberals should support tax reform just as enthusiastically as Republicans.[5]
Backgrounders at the Goodman Institute web site summarize the Kotlikoff/Auerbach approach to analyzing fiscal policy and their approach to measuring inequality[6]
The most recent study estimates the effects of changes in US corporate taxation on every major country in the world and extends the estimates until the end of the century. The study uses UN demographic data and IMF fiscal data for 17 large countries or combinations of countries, which span the entire global economic system. The model has more than 3 million equations. It provides the most convincing evidence to date that the burden of corporate income taxation is born by labor, not capital.[7]
Over all, the economist estimate that the proposed tax reform will lead to a massive inflow of capital (roughly $11 trillion) and this inflow will raise the income of the average household by $4,000 a year and more in future periods. Both unskilled and skilled labor can expect to gain.[8]
Health Center[edit]
Health reform has been an enduring interest for John Goodman and other health economists associated with the Goodman institute. In Characteristics of an Ideal Health Care System, he identified ten ways in which government policies were creating the very problems many reformers want to solve. In Designing Ideal Health Insurance he showed how public policies were preventing the insurance market from meeting people’s needs. In the Journal of Legal Medicine, he argued for a do-no-harm approach– under which government policies that are causing problems would be repealed and replaced before any other reforms are considered.[9]
One of Goodman’s most important reform ideas is to replace all the ways government currently subsidizes health insurance through tax and spending programs with a universal, refundable tax credit – essentially giving every citizen a fixed number of dollars for health insurance. That idea was elaborated with Mark Pauly in Health Affairs[10] and it became the core health insurance plan endorsed by John McCain in his presidential run against Barack Obama in 2008.[11] The legislative vision of the McCain approach was introduced by Tom Coburn and Richard Burr in the Senate and Paul Ryan and Devon Nunes in the House of Representatives.
More recently, the idea forms the core of one of the Republican alternatives to Obamacare in the House and the Senate.
In an article at the Health Affairs Blog, Goodman argued that there were six major problems in the Affordable Care Act that will not go away without major reform.[12] For example, the first problem is that people are being required to buy a health plan whose cost is expected to grow at twice the rate of growth of their income. These ideas were expanded into A Better Choice, a monograph published by the Independent Institute.[13]
Beginning in 2015, Goodman helped House Rules Committee Chairman Pete Sessions (R-TX) and Sen. Bill Cassidy (R-LA) develop a replacement plan for Obamacare. The plan calls for a universal tax credit for health insurance, personal and portable health insurance for employees and a flexible Roth HSA. In a post at the Health Affairs Blog, Sessions, Cassidy and Goodman argue that their plan is not only better than Obamacare, it would create universal coverage.[14]
Entitlement Reform Center[edit]
Thomas Saving (a former Trustee of Social Security and Medicare) and Andrew Rettenmaier are two Texas A & M economists who have a long association with John Goodman. Together, the three economists devised a plan to reform Medicare with private accounts – a one-of-its-kind proposal to remove the long term unfunded liability in the program.
More recently, Saving and Rettenmaier showed that 21-year-olds would be better off If they completely opted out of Social Security in return for paying a life time payroll tax of about 4.5% of their wages. Since the current payroll tax is 12.4%, that would leave young people with almost 8% of their wages to invest and save – more than enough to replace social Security during their retirement years. Further, the remaining payroll tax would be enough to complete our obligations to those who remain in the system.[15]
The Saving-Rettenmaier proposal is an example of a win/win entitlement reform. Goodman expanded that idea in a presentation to the Mont Pelerin Society in September, 2016 – arguing that there were literally thousands of win/win opportunities to reform federal policies. Further, Goodman proposed a trial-and-error method for discovering them.
The presentation was published by the Independent Institute as Better Than Government: A New Way of Managing Life's Risks. The manuscript has since been expanded into a book that will be published by the Independent Institute in late 2017.
References[edit]
- ↑ The Better Way Tax Plan, Goodman Institute Brief Analysis 120, August 8, 2017
- ↑ Hans Fehr, Sabine Jokisch, Ashwin Kambhampati, Laurence J. Kotlikoff, Simulating the Elimination of the U.S. Corporate Income Tax, NBER Working Paper No. 19757.
- ↑ Hans Fehr, Sabine Jokisch, Ashwin Kambhampati, Laurence J. Kotlikoff, Simulating the Elimination of the U.S. Corporate Income Tax, NBER Working Paper No. 19757.
- ↑ Alan Auerbach, Laurence Kotlikoff and Darryl Koehler, Assessing the Republicans’ “Better Way” Tax Reform, June 21, 2017.
- ↑ Laurence Kotlikoff, On Tax Reform, Ryan Knows Better, Wall Street Journal, May 11, 2017.
- ↑ We’ve Been Measuring Inequality Wrong – Here’s the Real Story. Goodman Institute Brief Analysis 101, March 14, 2016.
- ↑ Seth G. Benzell, Laurence J. Kotlikoff, Guillermo LaGarda, Simulating Business Cash Flow Taxation: An Illustration Based on the "Better Way" Corporate Tax Reform, NBER Working Paper No. 23675, August, 2017.
- ↑ A New and Better Way to Analyze Tax and spending Policies. Goodman Institute Brief Analysis 118, January 13, 2017.
- ↑ John C. Goodman, “Applying the ‘Do No Harm’ Principle to Health Policy,” Journal of Legal Medicine, Vol 28, No 1, Jan-Mar, 2007.
- ↑ Mark V. Pauly and John C. Goodman, Tax Credits for Health Insurance and Medical Savings Accounts, Health Affairs, spring, 1995.
- ↑ John C. Goodman, “McCain is the Real Radical on Health Reform,” Wall Street Journal, July 30, 2008.
- ↑ John C. Goodman, Six Problems with the ACA That Aren’t Going Away, Health Affairs Blog, June 25, 2015.
- ↑ John C. Goodman, A Better Choice: Healthcare Solutions for America (Oakland, Ca: Independent Institute, 2015).
- ↑ Pete Session, Bill Cassidy and John Goodman, How We Can Repeal the ACA and Still Insure the Uninsured, Health Affairs Blog, January 18, 2017.
- ↑ Thomas R. Saving, Can Privatizing Social Security be a Win/Win for All Generations? Goodman Institute Brief Analysis 108, March 1, 2016.
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