Minor Thoughts from me to you

One of life's primary lessons is that you shouldn't just think about the immediate effects of a decision or policy, but the long-term secondary consequences as well. Here are a few examples.

Be careful about trying to soak the rich through taxes. It may backfire. Asymmetrical Information: Loser..er...Labor Pays

Recent research has cast an eye in a somewhat different direction, showing that the tax may be borne not entirely (or even principally) by owners of capital, but by workers. ... A recent paper by Kevin Hassett and Aparna Mathur of the American Enterprise Institute analyzes data across countries and over time, concluding that for countries that are part of the Organization for Economic Cooperation and Development (OECD), a 1% increase in corporate tax rates results in a 0.8% decrease in manufacturing wage rates. (Economic intuition suggests significant negative effects of the corporate tax on manufacturing wages because of the complementarity of capital and labor for skilled workers.)

Wage effects of this size suggest labor bears much of the burden of the corporate tax. In fact, workers collectively would be better off if they voted for higher taxes on labor with corresponding cuts in the corporate tax.

That's for tax policy. How about trying to reduce state healthcare costs by requiring state employees to pay a larger portion of their own healthcare costs? Agency: GOP benefit cuts problematic

A plan by Assembly Republicans to require most state employees to pay 10 percent of their health insurance premiums could actually end up costing taxpayers more money, the state Department of Employment Trust Funds warns.

Stella warned that by requiring workers to pay a flat 10 percent premium, it would undercut the state's three-tiered premium system. Under the current system, employees who enroll in more cost-effective plans pay a lower percentage of the premium than those in higher-cost plans.

"We believe the 10 percent mandate will end the tiering structure and will eliminate our ability to effectively control cost increases," Stella wrote. "In fact, if we are correct premium costs for the state will increase rapidly and, if significant enough, render any savings from this proposal illusory."

Finally, how about changing the way doctors are compensated? Doctors - Wages and Salaries - New York Times

In the United States, nearly all doctors are paid piecemeal, for each test or procedure they perform, rather than a flat salary. As a result, physicians have financial incentives to perform procedures that further drive up overall health care spending.

Doctors are also paid whether the procedures they perform go well or badly, Dr. Bach said, and whether they are crucial to a patient's health or not..

"Almost all expenditures pass through the pen of a doctor," he said. So a doctor may decide to perform a test that costs a total of $4,000 in order to make $800 for himself -- when a cheaper test might work equally well. "This is a highly inefficient way to pay doctors," Dr. Bach said.

This article doesn't list any unexpected consequences of changing the way doctors are paid, but I can take a few guesses. Doctors might start to work fewer hours if they're salaried instead of being paid by the procedure. If doctors are paid based on performance rather than procedure, they may start to avoid sicker patients in favor of healthy, easy to treat patients. It's not a guarantee, of course, but is a possibility.

When considering any policy changes, it's best to at least think through the possible secondary effects of the change.