Making fees and fines dependent on income is a good way to get incentives right. In Germany for example health insurance is based on your income, not a fixed amount like here.

I believe that health care in the US is subsidized to some degree by people with higher income.

—- Medicare payroll taxes are proportional to salary.

—- Low income people that use hospitals generally don’t end up paying for their surgery and care which is passed on to people that do pay their bills.

—- Big pharma offers heavy discounts to low income patients for expensive drugs resulting in higher costs for the rest of us.

—- Under the current Afforadable Care Act free/low cost insurance is provided by raising taxes on the upper income people.

I don’t know what’s the best way to improve the system; I just wish the costs, who was paying for it, and where the money was going was more transparent. It appears that it is intentionally designed to be inscrutable.

But only up to a certain point: the tax is only on the first 50k EUR or so of your salary, and there is a minimum charged (about 100 EUR/mo.) no matter how little you make.

Still fairer than the US, though.

No, they should just improve the economy and supplement income (minimum income, negative income tax) to ensure that everyone can afford the cost of living, $40 tolls included.

Great examples - thanks!

Both the "fake money" and the "cost scales with income" are great ways to extend the applicability of markets to areas without currency or to minimize wealth effects.

For (1) there was a really good Planet Money podcast (#665)