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.
- Published on Thursday, March 15, 2012
Michael Cohen, director of The New School's graduate program in international affairs, discusses how Argentina's successful response to the global economic recession of 2008 was not to slash the budget to reduce debt, but to invest in their economy. He presents an alternative to U.S. policy makers who are intensely focused on a path of austerity and shows that austerity is not the only path. The graph below is discussed in the video and exemplifies how targeted stimulus spending can be very effective.
This discussion follows Cohen's presentation at a SCEPA panel discussion on austerity in politics and economics held in late 2011, "Do Budget Cuts Lead to Growth." SCEPA will be holding a second panel discussion on this theme on April 17, 2012. The event will focus on "What the US Should Learn From Austerity’s Fallout in Europe and Latin America."
- Published on Wednesday, March 14, 2012
A March 7, 2012 American Prospect article, Freelance Nation, reports on the growing number of people working for themselves and how policy makers can facilitate self-employment and micro-entrepreneurship. Teresa Ghilarducci's GRA is one such policy measure that can insure people have enough money for retirement.
"A GRA would be a portable individual account that you could pay into as a self-employed person and also have your employer pay into when you do have a job. It's like an IRA and 401(k) rolled into one with elements of social insurance—and, in that way, nicely captures the reality that many workers today will spend periods both on their own and working for organizations. The difference is that the funds would be invested in large pools by the government and accounts would be annuitized at retirement with a guaranteed rate of return."
- Published on Wednesday, March 14, 2012
Eduardo Porter summarizes his point in today's Economic Scene column in the New York Times when he states, "Tax expenditures die hard." SCEPA's economists have long called for reform, raising the issue during the many deficit commission and budget negotiations since the 2008 recession took over the nation's headlines. As Porter correctly notes, a little sunshine on tax expenditures could be a game-changer in terms of who gets what from Washington.
Porter echoes our argument that tax expenditures are both inefficient and regressive through his analysis of the lopsided effects of $1.1 trillion in tax breaks that are designed to promote social policy - like housing, medical insurance and retirement savings- but operate through the back door of the budget. Because these tax breaks – or foregone tax revenue – never see the light of day in a budget hearing or as part of the annual appropriations process in the U.S. Congress, it often goes unnoticed that they don't work.
In April of 2007, SCEPA co-hosted "Tax Expenditures and Social Policy: Are We Getting Our Money's Worth?" with the New American Foundation. The event focused on three of the largest tax expenditures in the U.S. budget: the health care premium exclusion, the home mortgage interest deduction, and the retirement plan exclusion. SCEPA next went directly to Capitol Hill, holding a briefing for lawmakers, their staff and advocates in October of 2010. David Walker, former Comptroller General of the U.S., called for the need to implement statutory budget controls that address tax preferences, and and Eric Toder of the Urban Institute presented data supporting the fact that the well-off are more likely to benefit.
Teresa Ghilarducci, SCEPA director and long-time advocate for reform in retirement policy, notes that retirement savings tax breaks are particularly lopsided. Rather than increasing retirement plan coverage and savings rates, most of these subsidies go to high earners who already have adequate retirement savings and can simply shift savings to tax-favored accounts. A 2005 GAO report cites research showing that no more than 9% of savings under the IRA tax expenditure are new savings engendered by the program. Taxpayers in the highest-earning 20% claim nearly 80% of the total benefits of entitlement programs for retirement accounts. If the total sum of these tax breaks were turned into tax credits, every taxpayer would receive $600 per year.
This behind-the-scenes tradition trickles down to the states. With little fanfare or acknowledgment, many states pass through these tax breaks. In Connecticut, New York and California, a credit would yield an extra $53, $158, $145, respectively. This means that on top of a federal tax credit, taxpayers in New York could receive as much as $758 per year to contribute to their retirement account. This may not sound like much, but it would be seed money for the workers who need it most: those that have little to no retirement savings.