TCF fellow Edward Kleinbard's latest book, We Are Better Than This, calls for an even more aggressive tax policy on our already highly progressive system.READ MORE
Statistically speaking, the U.S. economy is due for its next recession (with the model that a recession occurs every 6 years). While the economy is in fact looking healthy now, the government has perhaps not taken the smartest steps to prevent this approaching recession. TCF's Dan Alpert suggests that in addition to “an oversupply of labor, productive capacity, and capital,” the U.S. largely ignored working-class and middle-class workers regain financial stability.
Sixty percent of Americans saw their real incomes fall, but they didn’t complain because the “shower” of easy money “allowed them to make up for lost income and maintain living standards — at least for a while.”
Read the full article.
The problem of stark inequality is still a big issue in the U.S. TCF fellow Edward Kleinbard offered his take on why this inequality persists as it has, and describes it in his book, We Are Better Than This. His suggestion for improving the inequality issue? A better tax system that reflects investments in our future.
USC law professor Edward D. Kleinbard, meanwhile, described the mountains of “depressing data” he used to write "We Are Better Than That" (Oxford), a book that seeks to reframe the conversation about taxing into one about spending, about how we need a smarter government to restore our social safety net, and how all of this serves to end what he calls a “shameful inequality.”
Read the Kleinbard's commentary in the LA Times.
TCF fellow Charles Morris explains that despite the strong base of free trade that the U.S. economy is built upon, it may now be decreasing in its effectiveness due to the shifts in Chinese industries and manufacturing.
Yet, over much of the past year, low-cost Chinese steel has flooded U.S. markets, which, DiMicco says, is clear evidence of illegal “dumping.” Beijing, of course, says it complies with all fair trade rules.
But China plays by different rules. Its powerful manufacturing enterprises are largely state-owned, and blessed with a host of subsidies, including Party-determined prices for financings, land purchases, taxes and fuel.
Read the full article from Reuters here.
Apparently certain very wealthy American citizens have decided to take up residence, that is, spend at least 283 days, in Puerto Rico where the US cannot impose federal income tax on Puerto Rican sources and Puerto Rico cannot impose on them local Puerto Rican taxes. TCF fellow Ed Kleinbard says that these loopholes make for some unfortunate capital gains evasion.
The law here is clear, and the only risks are political (that Congress or the Puerto Rican legislature amend their respective tax laws to close down this loophole). But the costs of rolling the dice on the politics are minimal for a superaffluent taxpayer with a big potential capital gains tax bill — sell the homes in Atherton and Telluride, and buy an ocean view estate on the island.
Read Kleinbard's article from The New York Times here.
TCF fellow and economist Mark Thoma revisits the methodological revolution of the 1970s, suggesting that modeling at the level of the individual firm or household is not always the best method of macroeconomics. He takes a look at modern models as alternatives to explain economic trends and policy.
Thus, the approach to take depends critically on the question the researcher is asking. For some questions, the aggregate approach is best despite the criticism it has received in recent years from those using modern models, and we shouldn’t think of it as going backwards if we adopt this approach when it provides simple, fast, and accurate answers to our questions.
Read Thoma's full article featured in The Fiscal Times.
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.
Sign up for our mailing list and stay up to date on the latest happenings at The Century Foundation