TCF fellow Harold Pollack goes through the recent reforms proposed by President Obama on the 529 college savings account. Pollack says that only about 3 percent of families own 529 accounts, and they are for the most part in the affluent income bracket. Pollack says that he hopes the reforms on 529 accounts will shift to include the demographic groups that need college tuition assistance the most.
...there is something unseemly about affluent taxpayers becoming so irate when someone threatens to take away our goodies. The Government Accountability Office (GAO) issued a fascinating report describing who in America actually owns 529 accounts. Only about three percent of families do. According to the GAO, the median annual income of 529 account holders was about $142,000. Median financial holdings (which do not include housing wealth) were about $413,000. GAO indicates that this is about 25 times the typical financial wealth among families that don’t have 529 accounts.
Read Harold's piece for Washington Monthly.
TCF policy associate Jake Anbinder goes over the dropping gas price repercussions in Detroit, saying that much of the city's transit service is motivated by divided political efforts. He says that funding for city-wide transportation systems is rare and the ability for local and state transit authorities to agree on policy is even rarer, leaving riders at a loss for effective, wide-spread transportation networks.
To some extent, though, it’s a problem that affects nearly every major American city. In the 41 urban areas in the U.S. with more than 1 million people, there are currently 247 distinct transit agencies, according to the American Public Transportation Association — an average of six per metro region. The rare areas with just one transit agency, Jacksonville and San Antonio among them, tend, unsurprisingly, to have fewer political divisions.
Read Anbinder's full article featured in US News & World Report.
With the economy back in check and some modest growth happening, TCF fellow and economist Mark Thoma says "homeowners are missing out on billions of dollars in potential savings" and might consider refinancing their mortgages. Thoma gives a non-technical overview of what a refinancing might look like:
"... a household with a 30-year, fixed-rate mortgage of $200,000 at an interest rate of 6.5 percent that refinances when rates fall to 4.5 percent will save over $80,000 in interest payments over the life of the loan, even after accounting for typical refinancing costs. With long-term mortgage rates at roughly 3.35 percent, this same household would save roughly $130,000 over the life of the loan by refinancing."
Read the full article featured in CBS Moneywatch.
The nearing 2016 presidential election is likely to bring up the tricky question of taxing the wealthy on their capital gains, dividends, interest, and inheritances, says TCF fellow Mark Thoma. Thoma goes through the advantages and disadvantages of imposing an additional tax on the wealthy including the effects that such a situation would have on innovation and economic growth.
When each individual strives to get ahead, when we truly have an equal opportunity meritocracy that rewards each individual according to her contributions, we collectively propel ourselves forward. The more people who are subject to this meritocracy rather than relying upon inherited wealth, the faster we will grow.
Read the full piece here.
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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