In Which We Wonder Why Corporations Are So Levereged

And outsource the task to Felix Salom here.

Click the link - it's instructive. Corporations that finance operations through debt pay a negative six percent tax rate. They simply raise enough debts that they pay more in interest than they earn in income. The tax deductibility of interest payments takes care of the rest.

In a world where everyone would like to return to some semblance of thrift, subsidizing companies to take on debt and taxing equity at rates in excess of thirty percent, can politely be called "a large misalignment of priorities."

A Note On Incentives

The Strawman Blogger is quite the fan of the dismal science - because of this, we find it stimulating to look at the world as a system of incentives. For example:

As we've discussed previously, you have no reference point about the cost of your insurance. Because of that, the only feedback you can provide is based on quality. Did you see you favourite doctor? Did you get your treatment? Was your copay too large?

If you don't get want you want, you complain. And insurance companies have every incentive to respond to your complaint. They can make preferred provider plans more expansive, provide better access to treatment, and reduce your copay.

This, of course, costs money. Your employer, certainly, can shop for more affordable policies, and they do. But in the war between quality and price, there's really only one thing you respond to.

If that doesn't sound crazy, it should. Think about it - Everything else you purchase is a balance between quality and price. The Strawman Blogger does not drive a Subaru Impreza because it suits his bloody image. We make decisions about food, clothing, shelter, and transportation, all based on the premium we're willing to pay for the product we get. Everything except healthcare.

Boggles the bloody mind.