Friday, 17 April 2020

Benefit principles and cost-recovery

Tony Burton makes an interesting point over at The Spinoff.

When we're thinking about paying for all of this mess, should we be running the benefit principle somewhere in the back of our minds?

The benefit principle of taxation says that the burden of paying for something should, where possible, fall on the beneficiaries of it.
These are the kind of extraordinary times when the government might consider extraordinary responses. Will they recognise the main beneficiaries of the lockdown are over-65s and revisit a capital gains tax or consider a surcharge on New Zealand Superannuation? Both would more evenly distribute the financial costs among generations. Given New Zealand First is in the coalition, and will be implacably opposed to anything touching superannuation, the government is more likely to look at higher taxes for middle and upper-income earners ($48,000 to $70,000 per year and more than $70,000 per year respectively).
The latest metastudy on fatalities shows mortality is heavily concentrated among the elderly.
Results: Thirteen European countries were included in the review, for a total of 31,864 COVID-19-related deaths (range: 27-14,381 per country). In the main meta-analysis (including data from Germany, Hungary, Italy, Netherlands, Portugal, Spain, Switzerland; 21,522 COVID-19-related fatalities), the summary proportions of persons < 40, 40-69, and ≥ 70 years of age among all COVID-19-related deaths were 0.1% (0.0-0.2%; I2 24%), 12.8% (10.3-15.6%; I2 94%), and 84.8% (81.3-88.1%; I2 96%), respectively. Conclusions: People under 40 years of age represent a small fraction of the total number of COVID-19-related deaths in Europe. These results may help health authorities respond to public concerns and guide future physical distancing and mitigation strategies.
I'd argue the benefits are broader: mortality is only one cost, morbidity is another. I'd be willing to pay an awful lot to avoid catching Covid; the accounts of younger people whose cases weren't serious enough to warrant hospitalisation still sound simply horrible. But I have absolutely no sense of what proportion of cases that are short of hospitalisation fall into that kind of category.

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