Source: Lauren E. Jones, Katherine Michelmore, Journal of Policy Analysis and Management, Volume 37, Issue 3, Summer 2018
From the abstract:
Using a simulated instrument strategy, we analyze how expansions to the federal and state Earned Income Tax Credits (EITC) affected household finances over the past two decades. Using data from the Survey of Income and Program Participation wealth topical modules, we also test whether responses differ over time, as well as whether there are different responses to the federal and state expansions, and how responses vary by educational attainment. A $1,000 policy‐induced increase in the average household EITC leads to a 3 percentage point increase in the likelihood of holding money in a savings or checking account, and approximately $700 more held in savings balances. These results are coupled with large increases in pre‐tax family earnings. We also find some evidence of decreases in unsecured debt holdings. We interpret these results as further evidence that the EITC increases the financial stability of low‐income single mothers.
Source: Ryan Koronowski, ThinkProgress, June 13, 2018
Trump’s corporate tax cut hasn’t benefited workers like he said it would.
Real Earnings Summary – May 2018
Source: Bureau of Labor Statistics, Economic News Release, USDL-18-0996, June 12, 2018
Real average hourly earnings for all employees increased 0.1 percent from April to May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from a 0.3-percent increase in average hourly earnings being offset by a 0.2-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).
Real average weekly earnings increased 0.1 percent over the month due to the increase in real average hourly earnings combined with the unchanged average workweek.
Real average hourly earnings were unchanged, seasonally adjusted, from May 2017 to May 2018. Combined with a 0.3-percent increase in the average workweek, real average weekly earnings increased by 0.3 percent over this period. ….
…. Production and nonsupervisory employees
…. From May 2017 to May 2018, real average hourly earnings decreased 0.1 percent, seasonally adjusted…..
Source: Laura Paddison, Huffington Post, June 1, 2018
….The idea of a robot tax has bubbled up over the past couple of years, thanks to the backing of some high-profile figures, proposing it as a way of trying to prevent all the benefits of automation from flowing to a tiny slice of wealthy people.
Benoît Hamon — a socialist candidate in the French presidential elections last year — made a robot tax a plank in his campaign. Perhaps the most famous advocate is Microsoft billionaire Bill Gates. He told Quartz last year, “Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”
He says he believes taxing machines could slow the pace of automation, giving people a chance to retrain and giving governments time to put in place policies to protect people from intensifying inequality…..
Source: Elliot Schreur and Benjamin Veghte, National Academy of Social Insurance, June 2018
From the abstract:
The 2018 Report of the Social Security Trustees projects that revenues will be sufficient to pay all scheduled benefits until 2034 and roughly three quarters of scheduled benefits thereafter. In 2017, Social Security income from payroll contributions, tax revenues, and interest on reserves exceeded outgo by $44 billion. Reserves, now at $2.9 trillion, are projected to begin to be drawn down in 2018 in order to pay full scheduled benefits. The Disability Insurance (DI) Trust Fund is projected to cover scheduled benefits until 2032, and the Old-Age and Survivors Insurance (OASI) Trust Fund until 2034.1 On a combined OASDI basis, Social Security is fully funded until 2034, but faces a projected shortfall thereafter. After the projected depletion of the combined OASDI trust funds, Social Security contributions and tax revenues would continue to be received and would cover about 79 percent of scheduled benefits (and administrative costs, which are less than 1 percent of outgo). The long-range actuarial shortfall over 75 years is projected to be 2.84 percent of taxable payroll – that is, 2.84 percent of all earnings that are subject to Social Security contributions. This projected long-term revenue shortfall is substantially unchanged from the 2.83 percent of taxable payroll reported in the 2017 Trustees Report. Timely revenue increases and/or benefit reductions could bring the program into long-term balance, preventing the projected shortfall.
Social Security 2018 Trustees Report
Source: Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds
Source: U.S. Census Bureau, America Counts: Stories Behind the Numbers, May 2018
Are you interested in how much your state is spending on college education or parks and recreation? Have you ever wondered if your state or local governments are putting more funds into public safety and health care compared to last year? How does your state compare to other states? Where would you go to find this financial information?
State and local governments are responding to a growing demand for transparency by posting more government data online. That information, however, has been primarily accessible to the public who have a strong background in internet research and accounting — until now. ….
….. The State & Local Government Snapshot is the most comprehensive and compact view of government data ever created by the Census Bureau. The visualization combines data from the Annual Survey of State and Local Government Finances and the Annual Survey of Public Employment & Payroll. ….
Source: Grant A. Driessen, Congressional Research Service, CRS Report, R45202, May 21, 2018
The federal budget is a central component of the congressional “power of the purse.” Each fiscal year, Congress and the President engage in a number of activities that influence short- and long-run revenue and expenditure trends. This report offers context for the current budget debate and tracks legislative events related to the federal budget. …. Trends resulting from current federal fiscal policies are generally thought by economists to be unsustainable in the long term. Projections suggest that achieving a sustainable long-term trajectory for the federal budget would require deficit reduction. Reductions in deficits could be accomplished through revenue increases, spending reductions, or some combination of the two. ….
Source: Mark J. Warshawsky and Michael Leahy, Health Affairs, Vol. 37 no. 4, April 2018
From the abstract:
The excise tax on high-cost health insurance plans (known as the Cadillac tax) under the Affordable Care Act (ACA) is an important part of the law’s attempt to control rising health care costs. Analysts using different data sources have come to divergent estimates of how many people would be affected by this tax. We used the National Compensation Survey from the Bureau of Labor Statistics, which is better suited to this analysis because of its law-relevant details on employer-provided health benefits. Our research clarifies an important area of empirical uncertainty, thereby informing the debate about the ACA and its proposed replacements. Our base estimate of impact, 12 percent of workers participating in employer-provided health plans in 2020, lies in the middle of other estimates, but it is considerably more comprehensive, accurate, and delineated by worker characteristics (region, number of employees at the firm, industry, occupation, and so on) than others. Workers affected at the highest rate include those in education occupations and high-income workers, while those in industries involving manual labor and public safety are affected at some of the lowest rates.
Source: The Economist, May 5, 2018
From a block away, the striking teachers camped out around Arizona’s capitol at first looked like a solid sea of red, the colour of their T-shirts and tents. On closer inspection, they distinguished themselves the way the teachers have always distinguished their classrooms—with handmade signs. Leah Falcon (“Arizona exports: Cotton, copper, teachers”), who teaches middle-school maths, said she was “fighting because my kids deserve better than 34 students in a class.” Megan Marohn (“Arizona Spending per Student: $9,000. Per Inmate: $24,000”) is a classroom aide and lifelong Republican who frets that Arizona’s Republican legislature and governor “put the value of corporations above students”. Jay Bertelsen (“Christian Non-Union Conservative Teacher Fighting for Funding”) has taught computer science outside Tucson for 25 years; his children qualify for Arizona’s state-subsidised health care for poor families.
Grievances such as these have motivated teacher strikes in five states. They look likely to continue—galvanising public-sector workers in states where Democrats hope to make gains in this autumn’s midterm elections. ….
Source: Elaine S. Povich, Stateline, May 7, 2018
Jeannette Belliveau lives with her dog and two cats in a 19th century house in the Upper Fells Point section of Baltimore, not far from Johns Hopkins Hospital, and rents out a couple of rooms for short-term stays to make a living.
In other parts of the city, Al Hallivis, a real estate investor and single dad, owns a half-dozen houses that he also rents by the night.
A few miles toward the city’s picturesque harbor, a variety of hotels offer traditional overnight stays.
All three models cater to Baltimore visitors, but that’s where the similarity ends.
Belliveau, Hallivis, and hotels have different business models, different perspectives and different agendas. These competing constituencies help account for the difficulty states have had in regulating and taxing the short-term rental industry, even as some cities have taken action to regulate short-term rentals….
….San Francisco this year began limiting the number of nights a year absentee owners can rent their properties through Airbnb or similar platforms. Owners who live in their residence can rent it out without limit. Owners also must pay a $250 registration fee to the city….
Source: Meg Wiehe, Institute on Taxation and Economic Policy, Press Release, May 11, 2018
….The misplaced priorities are evident: The recent tax cuts will provide the state’s millionaires with an average annual tax cut of more than $45,000, which is nearly as much as the average teacher’s annual salary of about $50,000…..