- On Capitol Hill
- On Wall Street
- In the Press
- Policy Reform Work
Our projects are designed to empower policy makers to create positive change. With a focus on collaboration and outreach, we provide original, standards-based research on key policy issues.
SCEPA joined with the Economic Policy Institute on Capitol Hill to brief congressional staff and policy experts on tax expenditures, or incentives given through the tax code without scrutiny by Congress.
SCEPA economists are working on the prospects for a more progressive economic order to emerge from the shock of the recession. They have published papers and documents that place current events in a longer-term context as well as policy proposals to deal with short-term concerns. They are also documenting the emerging discussion of how the discipline of economics is reacting to the Great Recession and the questioning of conventional economic analysis.
Lance Taylor, a SCEPA Faculty Fellow, presents an overview of his new book, Maynard’s Revenge, in a Google Tech Talk.
The book, published this November by Harvard University Press, is a timely analysis of mainstream macroeconomics, posing the need for a more useful and realistic economic analysis that can provide a better understanding of the ongoing global financial and economic crisis.
The government spends $143 billion through tax breaks in an effort to expand pension coverage and security. Yet, over half of the American workforce does not have a pension. Retirement insecurity hurts business plans, workers’ lives and retiree well-being. Reform is needed.
SCEPA’s Guaranteeing Retirement Income Project, sponsored by the Rockefeller Foundation and in collaboration with Demos and the Economic Policy Institute, has a plan to guarantee safe and secure retirement income for all Americans.
On November 16, 2012, SCEPA Director Teresa Ghilarducci was included in a list of experts asked to add commentary to Bill Moyers' “Group Think: Fiscal Cliff” blog.
In her post, “Jobs and Growth, Not Austerity”, Ghilarducci responds to the fiscal cliff problem by disputing the common argument that tax cuts for the rich create jobs. In reality, the wealthy are more likely to spend on foreign goods or to save, rather than spur domestic consumption or investment. Instead she argues that middle and working class consumers need increased buying power to increase growth, and that the government can make this possible by extending unemployment insurance and tax cuts for low and middle income households. Ghilarducci proposes four measures included in the Economics Policy Institute’s Plan to reduce the federal deficit while spurring growth:
· Extend Emergency Unemployment Insurance (EUI) for the long-term unemployed;
· Gradually phase out the temporary payroll tax cut and increase the earned income tax credit so that lower middle class people will be paid for the increase in payroll taxes;
· Allocate federal expenditures for infrastructure spending;
· Raise top tax rates to about those in the 1990s in order to pay down the debt.
On November 15, 2012, Mark Z. Jacobson, Professor of Civil and Environmental Engineering and Director of the Atmosphere/Energy Program at Stanford University, joined SCEPA to present the inaugural lecture of SCEPA's new Economics of Climate Change Speaker Series. His presentation was titled, "Wind, Water and Sunlight: How to Address Global Warming, Air Pollution, and Energy Security."
On November 25, 2012, the New York Times unveiled a thoughtful series on the deficit, Debt Reckoning: The Fiscal Deadline in Washington. In "Study Questions Tax Breaks' Effect on Retirement Savings," economic policy reporter Annie Lowrey identifies the lopsided and ineffective tax breaks for retirement accounts as a major contributor:
"Every year, the federal government spends more than $110 billion on tax deductions to encourage Americans to save more for retirement. A new study suggests such provisions may have little effect on the amount Americans save." That's because they go to people who least need the help!
We agree that these tax breaks are ineffective in raising retirement savings and benefit the highest earning tax payers (read SCEPA's analysis of retirement tax expenditures). But instead of eliminating them, we should rearrange retirement tax deductions into a tax credit. This would allow every American to set aside money in a retirement account of his/her own. If we cut the retirement tax expenditure and merely use it to reduce the government debt, we will still face an overwhelming retirement income debt that will result in a retirement crisis (the gap between what Americans need for an adequate retirement and what they have is close to $6 trillion, according to Anthony Webb at Boston College's retirement Research Center).
America's debt crisis has forced Congress to re-evaluate and possibly reform the tax code. They should use this opportunity to restructure the tax code to solve the upcoming retirement crisis.
For further investigation into this topic, below is video of a forward-thinking event hosted by SCEPA and the New America Foundation in 2009 that asked academics and lobbyists to defend and critique three major tax breaks – those for retirement, housing and employee health care. You can also read Lauren Schmitz's analysis of the costs of these tax expenditures at the state level.