Budget & Taxes

Sorry America, Your Taxes Aren’t High

Ben Steverman: “The Organization for Economic Cooperation and Development analyzed how 35 countries tax wage-earners, making it possible to compare tax burdens across the world’s biggest economies. Each year, the OECD measures what it calls the “tax wedge,” the gap between what a worker gets paid and what they actually spend or save. Included are income taxes, payroll taxes, and any tax credits or rebates that supplement worker income. Excluded are the countless other ways that governments levy taxes, such as sales and value-added taxes, property taxes, and taxes on investment income and gains.”

“Guess who came out at the top of the list? No. Not the U.S. At the top are Belgium and France, while workers in Chile and New Zealand are taxed the least. America is in the bottom third.”

All Those Warnings About the National Debt May Understate the Problem

Eric Pianin: “The CBO outlook paints a fairly grim picture, but a well-known spending watchdog says the national debt may be in even worse shape. A new analysis by the Committee for a Responsible Federal Budget finds that given the right set of policies and economic circumstances, the debt could actually rise as high as 225 percent of GDP over the next three decades.”

Want to See How America Is Changing? Property Taxes Hold the Answer

Andrea Riquier: “Americans paid nearly $300 billion in property taxes in 2016 – but as with everything in real estate, it’s all about location. Yet property taxes don’t just tell a story about local and regional housing markets – they also show how the country is changing.”

“Americans are fleeing areas with higher property taxes, making housing markets and local finances more stagnant in those areas. And even an influx of younger people into the urban areas that anchor those areas, like the Northeast and Midwest, isn’t enough to offset the exodus to low-tax areas like the Southeast and West.”

A Trump Crack Down On Legal Marijuana Would Hurt State Budgets

“If the Trump administration ends legal marijuana sales in America, an idea Attorney General Jeff Sessions supports, states collectively could lose billions of dollars in tax revenue. It’s another example of states making fiscal decisions only to have them potentially upended by the federal government,” Richard Auxier writes for the Tax Policy Center.

“The federal government taking a possible revenue tool off the table, even as it proposes cuts in federal support for states, would be unfortunate for states considering marijuana taxes and possibly financially devastating for states already planning spending that assumes those tax dollars continue.”

A Smarter Way for Trump to Cut Foreign Aid

Jared Pincin and Brian Brenberg: “First, the president should eliminate all tied foreign aid — assistance that must be spent by the recipient country on goods and services supplied by the donor country. Such rigidity drastically increases the cost of foreign aid, by as much as 30 percent — especially when it comes to food.”

“Second, the president should support distributing foreign aid only to countries in true economic need. This would dramatically reduce the number of countries receiving economic aid, allowing USAID to focus its resources where they can do the most good. If the United States focused its foreign aid on countries classified by the World Bank as low-income economies, it would distribute aid in 31 countries, rather than the 158 countries we’re sending aid to today.”

“Lastly, Trump should insist on a Leahy-style amendment for foreign aid. The Leahy Amendment prohibits any military assistance to parties who are guilty of human-rights violations. The same standard should apply to foreign aid, which is designed to promote human development and humanitarian purposes. Adopting this type of restriction on who can receive aid encourages accountability, both in terms of who is eligible for aid and how USAID distributes the aid.”

The Looming Budget Disaster

CNBC: “The Congressional Budget Office in its 2017 Long-Term Budget Outlook issued a dire warning to D.C. policymakers about the likely consequences of continued inaction on the budget deficit.”

“Thanks largely to the growing costs for programs like Medicare and Social Security, the federal debt will reach 150 percent of gross domestic product by 2047, the CBO projected, up from an expected 77 percent at the end of this year.”

“The CBO points out that the degree of change necessary depends a lot on how long the government puts off making changes. The accumulation of debt feeds back on itself as net interest payments rise. That means the longer lawmakers wait, the more they will have to invest in program cuts or tax hikes to solve the problem.”

No One Knows What to Do with the International Space Station

Sara Chodosh: “In 2024 the clock will run out on the International Space Station. Maybe. That’s the arbitrary deadline that Congress imposed back in 2014, at which point they’ll have to decide whether or not to keep funding the ISS. And yeah, that’s a whole seven years away. But then again…it’s only seven years away.”

“The ISS takes up half of NASA’s human exploration budget—half of the pile of money allotted for things like sending humans to Mars or to an asteroid. And if they want to push further into space exploration, NASA can’t keep sinking three to four billion dollars a year into the ISS. Not that it’s really their decision. Congress—specifically the House Committee on Science, Space, and Technology—decides how much money NASA will get. And because politicians aren’t experts in space travel, they keep holding hearings to discuss what they could possibly do with the ISS in seven years’ time. Let private industry take it over? Let it crash and burn into the South Pacific? Let the program keep running? The latest hearing took place last week.”

This Program Has Fed 40 Million Kids in the World’s Poorest Places. Trump Wants to Get Rid of It.

Washington Post: “Former senator Bob Dole, a pillar of the Republican Party and a staunch supporter of President Trump during his campaign, has accused the president of threatening “one of the proudest achievements of my lifetime” — by cutting a program that has provided school meals to more than 40 million children in some of the world’s poorest countries.”

“The McGovern-Dole Food for Education Program, a bipartisan aid enterprise championed by Dole and his Democratic Senate colleague George McGovern in the early aughts, was a casualty of the White House budget proposal released last Thursday.”

“Relative to other foreign aid programs, McGovern-Dole is both small and narrowly tailored: The Department of Agriculture requested $182 million to fund it this year, with the bulk of that money going toward commodity purchases and grants.”

President Trump Won Big in These Places. Now He Wants to Eliminate 3 Agencies Dedicated to Helping Them.

Washington Post: “In rural Appalachia, people are so poor that there is a federal program dedicated to lifting them out of poverty. Through the Appalachian Regional Commission, the government pitches in on projects that these rural communities badly need but can’t quite afford — everything from fixing roads, to building computer labs, to training workers, to opening health clinics.”

“President Trump, who won rousing victories in these same parts of rural America, would eliminate that funding.”

“In his budget outline for 2018 unveiled Thursday, none of the rural development agencies — the Appalachian Regional Commission, the Delta Regional Authority, the Northern Border Regional Commission — would receive any money. In effect, it would eliminate these programs, which are completely subsidized by the federal government.”