Tactics used to generate competition and therefore economic growth are the tax cuts, rebates, and other promises by governments that draw businesses to a specific locale. Some studies have shown, however, that these tactics are only effective in getting businesses to relocate, but fall short in terms of actual financial boosts. TCF fellow Mark Thoma weighs the pros and cons that these types of incentives generate.
Proponents of lower taxes and reduced regulation generally favor this type of competition, while those who worry about the social services government is able to provide and want to maintain regulations that enhance their quality of life are generally opposed.
Read the full article from CBS Moneywatch.
The newest banking scandal accusation surfaced in January, one that TCF fellow and Cornell Law Professor Robert C. Hockett likens to the Libor and Forex scandals that occurred a few years back. Hockett says that this time the Department of Justice investigation deals with the price of precious metals, specifically gold, and how it may be the result of several financial institutions colluding for personal gain.
HSBC revealed yesterday that the CFTC had issued their U.S. branch with a subpoena in January, demanding documents and details regarding their precious metal trading operations. In November 2014, the DoJ also requested HSBC issue documents as part of an antitrust investigation regarding precious metals.
Hockett's commentary is featured in a Newsweek article.
There has been long-time dissension between how Republicans and Democrats view and assist the middle-class. Unfortunately, many of the government benefits that taxes provide are actually portrayed through what TCF fellow Suzanne Mettler calls the "submerged state," and many recipients do not realize their existence.
That is, the way the government actually benefits the middle class often goes unseen, while taxes, particularly the income tax, are very obvious. Mettler notes that our federal tax code is full of handouts like the Mortgage Interest Deduction, but these tax benefits primarily benefit the affluent and middle class. "Our government is integrally intertwined with everyday life from healthcare to housing, but in forms that often elude our vision," she argues.
Mettler's piece is featured in the Huffington Post.
"We can do better than this," says TCF fellow Mark Thoma on the topic of affordable higher education in the U.S. He provides shocking statistics on college tuition and the saddening student debt numbers that go with it. Since 2004, student loan balances have more than tripled for college-goers in America.
Our data indicate that both increased numbers of borrowers and larger balances per borrower are contributing to the rapid expansion in student loans. Between 2004 and 2014, we saw a 74 percent increase in average balances and a 92 percent increase in the number of borrowers. Now there are 43 million borrowers, up from 42 million borrowers at the end of 2013, with an average balance per borrower of about $27,000.
Check out Thoma's full article.
All is fair in love and taxes, right? TCF fellow and tax expert Mark Thoma says that tax fairness is a difficult issue to solve when considering income disparities and benefit principles. The progressive tax option would tax each income group at a rate in which each experiences the same amount of financial "pain." Some say the current progressive tax system is not strong enough in the United States.
The implication is that taxes for the wealthy should be increased, and taxes for the poor should be reduced until both sacrifice equally when they pay the last dollar of taxes.
Read Thoma's full article featured in CBS Moneywatch.
The approach to appropriate income and wealth distribution has always been at odds between Democrats and Republicans. Republicans seem to deny the existence of racial gaps when it comes to this distribution, whereas Democrats aim to alleviate them. TCF fellow Suzanne Mettler is cited in the Al-Jazeera America article saying that Republicans use items such as "subtle tax breaks and benefits such as marriage subsidies and the mortgage interest deduction," which are part of what she calls the "submerged state" to garner electoral support.
Black income growth stalls when a Democratic president is paired with a Republican Congress. Furthermore, the longer Democrats are in power, the stronger the economic gains for blacks. By contrast, blacks fare worse when Republicans are in office longer. There are similar racial gaps in the criminal justice system.
Read the full article from Al-Jazeera America.
In recent decades, and especially since 2000, the richest Americans have enjoyed soaring income and wealth while the rest of the population's living standards have stagnated. The Century Foundation was one of the first institutions to raise serious concerns about these trends and propose ideas for improving economic conditions for all Americans- not just the fortunate few.
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