Only Republicans outsource to lose money

It's tax season, judging by the W-2 forms and mailers with multiple perforations showing up in my mailbox. So here'a a thought about how those tax dollars are being spent, in one specific tax-related agency.

The IRS is outsourcing tax collections to private collections firms because of a shortage of in-house revenue officers. The collectors will help bring in billions of tax dollars that might otherwise go unpaid. For their fee, the collections agencies will keep 22-24 cents of every dollar they collect. Not a bad deal for keeping the IRS lean and mean, eh?

Except that the overhead for the IRS to do the work itself is only three cents of every dollar. That's right, government is 7-8 times more efficient at collections than the private sector. And it adds up. Over 10 years, the IRS reports that it could collect up to $87 billion in underpayments, compared to less than 2 billion from the contractors.

Note: this isn't the only way the Republican administration has hamstrung the IRS. It also prevents them from providing free tax e-filing.

U.S. Health Care: It's not the private part that makes us innovative

A tip of the hat to Paul Krugman for this piece that debunks the idea that universal health care will undermine the U.S. lead in medical innovation.

The single biggest source of medical research funding, not just in the United States but in the entire world, is the National Institutes of Health (NIH): Last year, it spent more than $28 billion on research, accounting for about one-third of the total dollars spent on medical research and development in this country (and half the money spent at universities)...

As books like Marcia Angell's The Truth About the Drug Companies and Merrill Goozner's The $800 Million Pill point out, a lot of the alleged innovation we get from private industry just isn't all that innovative. Rather than concentrating on developing true blockbusters, for the last decade or so the pharmaceutical industry has poured the lion's share of its efforts into a parade of "me-too" drugs--close replicas of existing treatments that offer little in the way of new therapeutic advantages but generate enormous profits because they are patented and because companies have become exceedingly good at promoting their sales directly to consumers. (emphasis mine)

The most well-known example of this is Nexium, which AstraZeneca introduced several years ago as the successor to Prilosec...AstraZeneca promoted Nexium heavily through advertising--you may remember the ads for the new "purple pill"--and, as a result, millions of patients went to their doctors asking for it. Trouble was, the evidence suggested that Nexium's results were not much better than Prilosec's--if, indeed, they were better at all. And, since Prilosec was going off patent, competition from generic-brand copies was about to make it a much cheaper alternative. (The fact that Prilosec's price was about to plummet, needless to say, is precisely why AstraZeneca was so eager to roll out a new, patented drug for which it could charge a great deal more money.)

There's your private sector health care innovation - it's in the marketing department.

Do corporations have more right to a patent than universities?

Slashdot asks if universities should be able to hold patents and intellectual property if they get grants and donations (and taxpayer funds) as an educational institution.

I have another perspective? Why not?

If taxpayers funded the studies through an educational institution, shouldn't it be able to reap some of the benefits? In some cases, corporations can sponsor university research and obtain the intellectual property rights. Shouldn't a taxpayer-funded institution have the same rights?

If the concern is letting universities profit from research funded by third parties, then call me confused. Most universities have a wide range of funding sources for their research, from public money (state and federal), alumni donations, and corporate sponsorships. Is the variety of funding sources somehow more repugnant than a corporation who receives money from consumers?

If the concern is freedom of information, then it seems that patent law generally would be the source for concern. Are patents too broad in scope? Too long? Should certain things not be patented? The constitutional source of patents (Article I, Section 8) is a good start:

The Congress shall have power to...promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;

Making bank from recycling

Thanks to TriplePundit for the heads up on this innovative new way of encouraging recycling - paying people to do it.

Municipalities (that's cities in non-wonk speak) often have to budget extra for recycling programs because many people pledge to recycle, but often don't put up the volume to make ends meet for the city. Instead, a lot of half-empty trucks trundle off to the recycling center.

Enter Recycle Bank. It helps increase recycling rates by signing on corporate sponsors to reward recyclers with gift cards (think rewards Mastercard, but you get points for giving plastic instead of using plastic). RB helps reduce city's recycling costs and takes a cut of the savings, all while increasing recycling rates. Win win win.