Public Budgeting and Finance
Health
The development of government spending is a sign of a more considerable increase in healthcare spending in the mean economy. From the government outlook, the elements of healthcare spending are Medicaid and Medicare.
Medicare
The overall payout for Medicare was estimated at $528 billion in 2010 and predicted to reach $ 1 trillion by 2020. Also, the beneficiaries of Medicare were expected to reach 61 million by 2020, from 46 million recorded in 2010. The prediction was right considering the current situation of health. The government’s spending on Medicare has sharply risen with the coronavirus (COVID-19) pandemic. With an increase in the unemployment rate since April, the government has spent an average of $ 43 billion monthly that exceeds the $ 35 billion set down in 2019. The increase in Medicare spending can be attributed to elements caused by the COVID-19 pandemic (Cavallo & Forman, 2020). They include an increase in the number of Americans entitled to Medicaid due to lack of employment and current legislation that has increased both the application and government financing for its cost.
Medicaid
Medicaid is driven by income demographic and shared between the federal government and states. The predicted state budget pressure from Medicaid to return by 2012 was right since the stress is still experienced even today. The impacts of the COVID- 19 pandemics have contributed to an increase in Medicaid spending for the government (Frenier, Nikpay, & Golberstein, 2020). COVID-19 epidemic resulted in the shutdown of countries, positioning the nation’s economy at a free fall. It resulted in an increased number of people who may qualify for the enlarged Medicaid.
Taxes
Joyce and Pattison anticipated that by 2020, there would be a further rise in the percentage earnings from local government obtained from earnings sources other than the property’s tax. Also, they anticipated that there would be an increment in federal income tax but not a rise of tax from the lines recommended by economists. They further predicted that there would be less pressure and government assistant. However, the predictions were not correct considering the current economic situation that has majorly been affected by COVID- 19 pandemic. With the effects impacted by COVID -19 pandemic, various countries are ratifying tax measures that can reduce tax expenses for business operators (Clemens, & Veuger, 2020). Such efforts include imposing deductions for depreciation, improved deductions for hygienic and health measures put in place to protect customers and employees, and allowing removal of a multiple of actual expenses.
Various countries are implementing and initiating VAT deductions, relaxed compliances, and credit requirements to vitalize trade. Governments are also providing and permitting for loss carrybacks to provide companies with funds to continue their operation. Countries actively involved in the pursuit of fiscal policy development are coming up with measures to help employees and employers. Such efforts include deductions of social taxes and multiple decreases in salaries and wages under defined situations. Some countries are also extending the deadlines to file tax returns, making payments of taxation, and offering interest and penalty-free period at which charge can be filled and returns filled.
References
Cavallo, J. J., & Forman, H. P. (2020). The economic impact of the COVID-19 pandemic on radiology practices. Radiology, 201495.
Clemens, J., & Veuger, S. (2020). Implications of the COVID-19 Pandemic for State Government Tax Revenues (No. w27426). National Bureau of Economic Research.
Frenier, C., Nikpay, S. S., & Golberstein, E. (2020). COVID-19 Has Increased Medicaid Enrollment, But Short-Term Enrollment Changes Are Unrelated To Job Losses: Study examines influence COVID-19 may have had on Medicaid enrollment covering March 1 through June 1, 2020, for 26 states. Health Affairs, 10-1377.