By: Lam Thuy Vo and Jacob Goldstein
Via: NPR Planet Money

Last year, the federal government collected $2.3 trillion in taxes. Most of that came from two sources: Individual income taxes and payroll taxes.

Source: Tax Policy Center
Credit: Lam Thuy Vo/NPR

Payroll taxes are deducted automatically from your paycheck, and paid in part by employers. Payroll taxes fund Social Security and Medicare.

Individual income taxes are what everybody is scrambling to file right now. Individual income taxes pay for most of what the government does other than Social Security and Medicare.

Quick rundown of the others: Estate tax comes from large inheritances; corporate tax is paid by corporations (obviously); and “other” includes customs duties, excise taxes on products such as gasoline, and everything else.

Here’s how federal taxes fall on households across the income spectrum.

Source: Tax Policy Center
Credit: Lam Thuy Vo/NPR

This chart is based on data compiled by The Tax Policy Center in this table. A few somewhat wonky notes on the data:

The income numbers are for total cash income, rather than adjusted gross income. This PDF discusses the distinction between the two.

Taxes paid combines income, payroll, estate and corporate taxes. It assumes that corporate taxes come out of profits that would otherwise have gone to shareholders.

If you leave out corporate taxes, the rate paid by top earners falls significantly. (Most corporate profits go to the top earners.) But tax rates still tend to be higher for those with higher incomes. You can see that trend in this table.

It’s hard to comprehend how $3.7 trillion is divvied up among countless Federal agencies and programs. To better understand President Obama’s 2013 budget proposal, both The New York Times and The Washington Post have created helpful interactive data visualizations.

The New York Times slices the data four ways: All Spending; Types of Spending; Changes; and Department Totals. Clicking from one view to the next creates an animated tour of the budget. Scroll over each circle to see which department is gaining or losing funds.

All Spending


Changes


Department Totals

The Washington Post uses boxes to show both revenue and spending. Click on a box to see trends in each category since 1981.

via The Baltimore Sun


Baltimore Inner Harbor from Federal Hill – photo by ktylerconk on Flickr

Frustrated by Maryland’s high rate of health disparities, state leaders are proposing a new attack — one more commonly associated with economic development. Gov. Martin O’Malley’s 2012-2013 budget will include funding to create Health Enterprise Zones, where doctors and community groups in areas with large health disparities, such as Baltimore, could add medical and support services for minorities. Tax credits and other financial incentives would be available to spur interest.

The plan is designed to save lives and healthcare dollars, according to Lt. Gov. Anthony G. Brown, who last summer formed a work group on disparities led by Dr. E. Albert Reece, dean of the University of Maryland School of Medicine.

“Maryland has world-class hospitals, top medical schools and one of the highest rates of primary-care physicians per capita, and yet we continue to see disparities in health care and outcomes among Maryland’s racial and ethnic communities. It’s clear that a lack of access to primary care in many communities is a significant factor driving these disparities,” Brown said, adding that funding is in the governor’s budget proposal, which has yet to be released.

According to state and national data, the disparities are many: In Maryland, the infant mortality rate among blacks is almost three times that for whites, the incidence of new HIV infections among blacks is almost 12 times that of whites, and Hispanics are more than four times as likely not to have health insurance as whites. Moreover, nearly twice as many African-Americans suffer from diabetes as whites, and hospital admission rates were three times higher for blacks with asthma and 41/2 times as high for blacks with hypertension. Treating such illnesses is costly, according to the work group, which cited data showing nearly $230 billion in direct medical costs could have been saved from 2003 to 2006 if there were no racial and ethnic health disparities.

The proposed program would work something like economic enterprise zones, where businesses receive subsidies to create jobs and activity in certain areas. The health zones program would be a pilot, available in two or three geographic areas. New and existing primary-care practitioners could receive loan assistance repayment; income, property or hiring tax credits; and assistance in installing health information and other technology. Subsidies would be capped, likely in the tens of thousands of dollars. Local health departments might get involved in recruiting participants.

Brown said he would push to expand the program statewide if it proves successful in a couple of years — not a given, considering the logistical and cultural complexity of the problems. For example, residents of some neighborhoods don’t have easy access to grocery stores that sell fresh fruit and vegetables, or don’t visit the doctor until there is an emergency. Reece said many groups have tackled disparities, but the work group wanted to focus its attention on chronic diseases responsible for 80 percent of health costs. They drilled down to a few key maladies that often have “ripple” effects. They include diabetes, hypertension and asthma.

“We decided to identify … areas where we thought we could make an effective impact within a reasonable time frame,” he said. The health enterprise zones approach is unique, he believes. Work group members got the idea from a similar program built around children’s needs in the community of Harlem in New York City. Program applicants are likely to come predominantly from rural and urban area where disparities are most pronounced.

In Baltimore, studies show a 20-year gap in life expectancy between upper-income, predominantly white neighborhoods and poorer, predominantly minority neighborhoods. Recently, city health department officials began working with community leaders in 55 neighborhoods to identify the most pressing health needs and develop plans to tackle them. The state’s zones would complement these efforts, Reece said. His work group also proposed other elements to promote health and track outcomes.

The group suggested Health Innovation Prizes with small financial rewards and public recognition for individuals and groups that improve health and well-being in their community. The group also recommended tracking disparity data for programs that already exist for primary care physicians and hospitals. Incentives and penalties assessed through these programs could eventually be linked to disparities.

Reece said the prize and the enterprise zones are two things Maryland can do now to help reduce disparities in a few key geographic and health areas. If legislation to create the zones is passed during the current legislative session, the details will be worked out by the state Department of Health and Mental Hygiene.
Already, Dr. Joshua M. Sharfstein, department secretary, supports the move: “The creation of Health Enterprise Zones will help communities target resources to have the most powerful impact.”

meredith.cohn@baltsun.com

Coinciding with Veteran’s Day, a number of new initiatives were announced to help put veterans back to work. Here are a few resources for communities with large military operations, as well as veterans returning home.

President Obama has announced a new initiative to support veterans looking to return to the workforce. The Returning Heroes Tax Credit provides firms that hired unemployed veterans with a maximum tax credit of $5,600 per veteran. The Wounded Warriors Tax Credit offers firms that hire veterans with service-connected disabilities a maximum credit of $9,600.

Indeed.com and Google also launched products aimed at supporting the veteran community this month. At military.indeed.com, veterans can now enter their Military Occupational Code (MOC) to search for civilian jobs on Indeed that match their skills and experience. In a similar spirit, Google launched a Veterans Job Bank in partnership with the Department of Veterans Affairs.



These initiatives are timely in light of the Bureau of Labor Statistics report that put the unemployment rate for veterans who served in the military at any time since September 2001 (known as Gulf War-era II veterans) at 11.5% in 2010 (as compared to 8.7% for all veterans and 9.4% for nonveterans). Additionally, about 25% of Gulf War-era II veterans reported having a service-connected disability, compared with 13 percent for all veterans.

In a recent National Public Radio (NPR) report veterans describe a job market that presents some unique challenges. These challenges include a generation of managers who are less likely to have direct military experience (and therefore less likely to fully comprehend the range of skills veterans bring to the job) and the fact that some military qualifications do not automatically transfer to the private sector. However, David Loughran, senior economist at the Rand Corporation, goes on to describe how veterans actually have an employment advantage over the long run, including lower unemployment levels than civilians (8.7% vs 9.4%).

via NYTimes, By BARRY MEIER and JANET ROBERTS

One afternoon last spring, a little-known congressman from Minnesota made an impassioned plea before a House oversight committee.

Rein in the Food and Drug Administration’s uncertain approval process for new medical devices, urged the Minnesota congressman, Erik Paulsen, or Minnesota and other states stand to lose up to 400,000 jobs because of lost investment in the device industry.

Over the following month, Mr. Paulsen’s campaign committee took in $74,000 from people with a stake in device regulation, much of it from executives affiliated with venture capital funds and their spouses. Now Mr. Paulsen, a two-term Republican, is a sponsor of a bill that would make it easier to bring new medical products to market.

As Congress considers reauthorizing a law that sets the fees for medical device makers, venture capitalists are emerging as a rich and influential ally of device companies eager to remove what they say are regulatory roadblocks in the approval process. The push has alarmed patient advocates and some doctors, who have been calling on the F.D.A. to intensify its oversight of devices, particularly in light of some all-metal artificial hips that are failing prematurely at an unusually high rate.

“They have this unwritten assumption that every new device is innovative,” Dr. Rita Redberg, who is the editor of the Archives of Internal Medicine, said, referring to the venture capital funds. But some devices, she said, “are killing people or causing significant harm.”



People associated with funds that underwrite companies developing new devices and other health products have made more than $3.3 million in political donations to Republicans, Democrats and political action committees over the past five years, according to an analysis of federal contributions by The New York Times.

Though such people donate for many reasons, about 20 percent of the money from the 182 donors identified by The Times went directly to candidates and political action committees supporting a streamlining of F.D.A. policy or other issues of importance to medical products producers. The total contributions from such donors could be much higher; The Times limited its analysis to individuals affiliated with venture capital funds that have joined two lobbying associations.

Investment funds and business groups have also increased their lobbying in Washington and have generated a stream of reports arguing that regulations are crippling innovation and driving away investment.

Simply put, the industry’s champions argue that the F.D.A. suffers from high personnel turnover, an unwieldy bureaucracy and a regimen that forces start-up device companies to run new and costly tests constantly, often duplicating past efforts.

“This is about survival,” said Michael Carusi, a general manager at an investment fund in Palo Alto, Calif., Advanced Technology Ventures, who contributed $1,000 to Mr. Paulsen. “We are deeply concerned about the future.”

Medical devices encompass a wide array of products, such as heart defibrillators, artificial joints and diagnostic equipment.

Lobbying to smooth the approval process has intensified over the last year as Congress prepares to reauthorize the law that requires device producers to pay fees to the F.D.A., fees that are used to pay the agency’s operating costs. Lawmakers have an opportunity to alter the agency’s regulatory procedures for the first time since the law last came up for renewal in 2007.

An industry lobbying group, the National Venture Capital Association, has intensified its focus on device regulation. In 2010, the association, which lobbies on many issues, spent more than $2.5 million, according to data from the nonpartisan Center for Responsive Politics. About $350,000 of that was related to devices, drugs and health care, a figure that is expected to increase to $450,000 this year, said an association spokeswoman, Emily Mendell.

While it is not unusual for businesses to point to regulation as a barrier to economic and job growth, medical device investors have found a particularly receptive audience on Capitol Hill in recent months. In October alone, 10 bills have been introduced by Republicans in the House to speed up the F.D.A. device approval process; in the Senate, similar legislation has been introduced by Amy Klobuchar, a Democrat of Minnesota.

Since February, four House panels have held hearings on the impact of F.D.A. procedures on device approval. At those sessions, 19 of the 26 listed witnesses were investors, entrepreneurs, industry consultants, trade group officials or patients who said that agency delays in approving a device had harmed them or a loved one. The list included no patients injured by a flawed device; one hearing in the Senate had a more varied witness list. Two weeks ago, four Democratic congressmen wrote to their Republican counterparts about the imbalance in the House testimony and suggested the hearings had failed to address potential dangers “if medical devices are not appropriately regulated.”

The letter, signed by Henry A. Waxman of California, Diana DeGette of Colorado, John Dingell of Michigan and Frank Pallone of New Jersey, also urged that hearings be held on the metal hip problem and similar issues.

Venture fund executives like Mr. Carusi and lawmakers like Mr. Paulsen insist that they are equally concerned about safety. However, in their view, a big part of the problem at the F.D.A. is philosophical; top officials, these critics say, have overreacted to recent episodes involving flawed products and become risk-averse. As a result, devices are available first in Europe, they say.

“The key is to strike the right balance,” said Dr. Josh Makower, a device developer and a consultant to New Enterprise Associates, a venture fund in Palo Alto.

F.D.A. officials said they have recently tried to address investors’ concerns by announcing programs to encourage innovation and reduce regulatory burdens. Still, the head of the agency’s device division, Dr. Jeffrey E. Shuren, said that executives like Dr. Makower seemed more interested in politicizing the issue than resolving it through discussion.

“The dialogue has become more political and adversarial,” Dr. Shuren said.

Some medical experts have also questioned recent studies about the negative impact of regulations, calling the reviews flawed in methodology.

William Vodra, a lawyer in Washington who has worked closely with medical device producers, said that investors had legitimate concerns about regulatory speed. That is because the approval of a new device can begin a process in which a start-up company is acquired by a larger manufacturer and early investors profit by cashing out.

But such investors may be less interested in what happens to that device after it reaches the market because they have already moved on, said Mr. Vodra, who served on an Institute of Medicine panel that recently concluded the F.D.A. failed to properly assess the safety and effectiveness of many new devices.

Mr. Paulsen, the Minnesota congressman, did not respond to requests for an interview. But a spokesman, Tom Erickson, said that the lawmaker’s testimony this spring was unrelated to any campaign donations and reflected his long-held view that the F.D.A. was undermining an industry crucial to Minnesota.

“He gave his testimony because he feels these jobs are being threatened by an inconsistent and unpredictable F.D.A.,” Mr. Erickson said. Mr. Paulsen, along with Democrats and Republicans from states that are home to device makers, has also sought to repeal a tax on sales imposed on the industry under the health care overhaul law.

Dr. Makower, the venture fund consultant, has donated $5,000 to Mr. Paulsen, records show.

“I think that he understands this issue,” said Dr. Makower.

via NYTimes Bits Blog
by: Jenna Wortham

The battle royale brewing between New York and Silicon Valley to be the nation’s dominant epicenter for tech innovation and hot start-ups wages on. On Monday night in downtown Manhattan, Paul Graham stood before a packed auditorium of 800 entrepreneurs, developers, programmers and others who were curious about what makes a city a fertile environment for a thriving community of start-ups. Mr. Graham is a well-known investor and esteemed figure in Silicon Valley because he created Y Combinator, an incubator in Mountain View, Calif., that has given seed money and mentorship to start-ups.

At the Y Combinator event, Mr. Graham raised the question of the sustainability of New York’s future as a hotbed of technology innovation and whether the city could ever grow to rival Silicon Valley.

“The truth is that I don’t know what’s going to happen,” he said. “Hubs tend to stay hubs.”

Mr. Graham gave the keynote talk for the evening, but also welcomed several Y Combinator alumni to the stage, including Sam Altman of Loopt, Alexis Ohanian of Reddit and Joe Gebbia of Airbnb. Mr. Graham kidded that his speech could have been titled “On the Other Hand,” because for each theory he had about why New York, a decade after the dot-com bust, was springing back to life and whether it could give rise to the next Facebook or Google, he had a counterpoint to rival it.

He said that geographically speaking, there were several elements that contributed to a healthy ecosystem to nurture young start-ups. After all, he acknowledged, most start-ups don’t make it past their infancy.

“But places aren’t sprayed with start-upicide,” he said. “A start-up needs keys to success.”

He noted that New York, like Silicon Valley, had the same density of tech-savvy people working in similar industries required for the kinds of happenstance encounters and introductions that could revive a company’s flailing fortunes and help right its trajectory.

He recalled the serendipitous sidewalk meeting of Mark Zuckerberg and Sean Parker, the founder of Napster, who helped shape Facebook in its early days and became its founding president.

“The antidote for a failing start-up is Sean Parker,” he said.

However, Mr. Graham also said that New Yorkers tended to prize making money above all other goals — which could prove to be advantageous or disastrous for a fledgling company or business idea.

“The Valley is a magnet for nerdy visionaries,” he said. “New York is for rapacious deal makers.”

Mr. Graham went on to list a few other factors that detract from New York’s viability, including the distractions of city life and other, more lucrative industries, like Wall Street, along with the Valley’s perennially sunny climate.

But he did note that New York had surpassed Boston, long considered a nexus of technology and start-up culture.

“New York is solidly No. 2 right now,” he said.

New York, Mr. Graham said, was ripe for the kinds of companies that can disrupt and transform some of the city’s legacy businesses, like fashion, advertising and finance. Whether or not they can give rise to a large-scale technology company along the lines of Google and Facebook, he said, remains to be seen for now.

However, even Mr. Graham isn’t immune to the siren call of the hot start-ups cropping up in the boroughs of New York. Although he said he had no plans to bring a version of his incubator to the East Coast, like Ron Conway, a lauded angel investor, and Accel Partners, a well-known investment firm, who each have turned a keener eye to New York in recent months, Mr. Graham did say that he hoped to lure more New Yorkers to the annual Y Combinator start-up class.

But for those entrepreneurs who are accepted into Y Combinator and, after finishing their three-month incubation period, want to move back to New York? He wishes them the best of luck on their journey.

“I don’t try to stop them,” he said.