The upcoming annual basketball tournament known as March Madness inspired TCF policy associate Mike Cassidy to pinpoint the five recurring aspects of inequality that are happening today. He says that if the economy was more like a sports tournament where teams determine their success based on talent and drive, citizen's income distribution would be more equal.
While inequality has increasingly become a part of the national dialogue, with 2016 hopefuls from both parties promising to address the plight of the poor and the middle class, the fact remains that political influence has become as concentrated as wealth, or even more so.
Read Cassidy's full article in US News & World Report.
TCF fellow Mark Thoma fears that the Federal Reserve is on thin ice when it comes to the timing of regulating interest rates. He outlines the ways in which investing rates can affect other aspects of the economy, such as less lucrative investment returns and fewer purchases of durable goods.
If the Fed moves rates too late, the risk is inflation. However, that would likely be short-lived because the Fed has effective inflation-fighting tools. Indeed, many analysts, myself included, believe if the Fed is going to make a mistake, the more costly error would be to raise rates too soon rather than too late.
Thoma's full article from CBS Moneywatch can be read here.
According to an article from the New Republic, Republican senators Mike Lee and Marco Rubio have come out with a new tax plan that appears to penalize poor families and their children. The plan has hints of social engineering because it essentially prevents low-income families who need benefits the most from receiving such credits. The article cites TCF fellow Jeff Madrick and policy associate Clio Chang's newest work on cash allowances.
The Reformocon tax proposal is intentionally designed to exclude the poorest 20 percent of families from these new child benefits, as plan architect Robert Stein previously explained. According to Stein, the plan is intentionally "not designed to encourage fertility in the poor over and above what we already do," meaning that its disproportionate boost to the wealthy is a piece of social engineering, not an unintended facet of the policy.
Read the New Republic article.
Read Madrick and Chang's blog post on cash allowances.
The corporate tax rate has needed to be addressed for years, and TCF fellow Edward Kleinbard says that the time may finally have come for policymakers to lower the current rate of 35 percent. The two hurdles to corporate tax reform are pass-through entities and figuring out what to do about the international income of U.S. multinationals.
Offering bargain corporate-tax rates to induce small- and medium-sized companies to accept tax reform might seem distasteful to some, but it’s a good deal for America. One comprehensive and sensible tax system for all businesses above a certain size should be the ultimate objective.
Read the full article by Kleinbard featured in Bloomberg View.
Among the few tax experts who claim they are hopeful to see some corporate tax reform in the near future is TCF fellow Edward Kleinbard. He says in a recent Forbes that one of the priorities for this reform includes a tolerance for losing revenue.
"Among the lessons of the many failed tax reform attempts of the last three decades are that tax reform will not come from a commission; it will not result from a bill drafted by a committee chair behind closed doors; it will not be a flat tax; it will not be a consumption tax as a replacement for the income tax; and it will not succeed through dynamic scoring. Rather, tax reform will result from the establishment of a fully bipartisan architecture for the bill at the outset."
This article can be read here.
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.
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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