• Daily Digest - April 15: What Makes Taxes Worth It?

    Apr 15, 2014Tim Price

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    Read My Lips: More New Taxes! (New Republic)

    Tax Day would be a time for celebration if there were a clearer connection between paying taxes and receiving the many valuable public services and benefits they fund, writes Jonathan Cohn.

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    Read My Lips: More New Taxes! (New Republic)

    Tax Day would be a time for celebration if there were a clearer connection between paying taxes and receiving the many valuable public services and benefits they fund, writes Jonathan Cohn.

    TurboTax Maker Linked to 'Grassroots' Campaign Against Free, Simple Tax Filing (ProPublica)

    Giving taxpayers the option to use pre-filled tax returns could save them money and time, but tax software developer Intuit is lobbying hard against the proposal, reports Liz Day. 

    Chances of Getting Audited by IRS Lowest in Years (AP)

    Deep budget cuts have put such a strain on IRS resources that the agency audited only 1 percent of individual returns last year, writes Stephen Ohlemacher, and that number will drop in 2014. 

    C.E.O. Pay Goes Up, Up and Away! (NYT)

    Despite efforts to restrain the growth of executive pay through increased transparency and regulation, median CEO compensation grew 9 percent in 2013, hitting $13.9 million, writes Joe Nocera.

    The Single Mother, Child Poverty Myth (Demos)

    Family composition in the U.S. is not much different from that of Northern Europe, writes Matt Bruenig, but the European countries have much more generous welfare systems to keep children out of poverty.

    What the French E-mail Meme Reveals About America's Runaway Culture of Work (The Nation)

    French workers are often mocked because they continue to fight for work-life balance, writes Michelle Chen, but American work culture's disregard for those boundaries is the real historical outlier.

    How 250 UPS Workers Fired for a Wildcat Strike Won Back Their Jobs (In These Times)

    An outcry from union members, activists, elected officials, and customers forced UPS to reverse its decision to fire hundreds of drivers at a Queens facility for protesting a co-worker's dismissal, reports Sarah Jaffe.

    New on Next New Deal

    What is Economic Growth Without Shared Prosperity? 

    Roosevelt Institute | Campus Network National Field Strategist Joelle Gamble argues that economic policy should focus on improving life for all Americans, not just those at the very top.

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  • What Is Economic Growth Without Shared Prosperity?

    Apr 14, 2014Joelle Gamble

    It's time for the U.S. to recognize that policies to push economic growth must focus on average Americans, not "job creators."

    It's time for the U.S. to recognize that policies to push economic growth must focus on average Americans, not "job creators."

    Rampant inequality is putting the future of the American economy in peril. The financial recovery we have experienced the past few years has only led to massive gains for top earners and little to no change for average Americans. Decades of policies that throw more benefits to the top have not “trickled down” to the average household.

    But more importantly, our current idea of economic progress is skewed. The wealthy have created this idea that “job creators” are a class of people who can magically restore out economy, ignoring the fact that entrepreneurship and innovation come from all economic statuses.

    America needs to shift our economic narrative away from a heavy emphasis on GDP-based growth and toward a model that promotes prosperity for everyone. We need to think about how we generate demand in order to create jobs. This demand comes from average Americans having the ability to engage meaningfully in the economy, with fair wages without discrimination in the workplace. In short: economic progress must involve prosperity for all Americans, not just “job creators.”

    Legislative battles at the local, state, and federal levels around equal pay and the minimum wage will prove crucial to changing our conception of what constitutes good economic policy. Victories in these fights represent tangible ways in which the average American worker can better his or her own economic prospects and simultaneously grow the economy.

    We are seeing progress now. In January, the city of Seattle began pushing to raise the minimum wage for city workers to $15.00 per hour. Earlier this week, the state of Maryland voted to raise its minimum wage from the federal $7.25 to $10.10 per hour. Meanwhile, President Obama continues his push for federal action.

    Meanwhile, in the United States, women make an average of $0.77 for every $1.00 earned by men, but growing movements are pushing the needle in the right direction. The President signed directives to clamp down on gender discrimination by federal agencies and contractors. Americans show strong bipartisan support for paid sick leave and family leave. Municipalities, are pushing through bills to make this support a reality –in New York City, Mayor De Blasio has already expanded the paid sick leave law that was established in 2013.

    While the most sustainable and sweeping changes on these fronts may be best achieved at the federal level, many of the real policy battles are playing out in cities and states. This presents a real opportunity to involve a wide swath of Americans in economic justice work in their neighborhoods. If organizers on the ground build power to push a prosperity-centric policy agenda forward through both community building and new technology platforms, we can see a real shift in the narrative of what economic progress looks like in this nation.

    Joelle Gamble is the Roosevelt Institute | Campus Network National Field Strategist.

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  • Daily Digest - April 14: A Business Plan for a Better Environment

    Apr 14, 2014Rachel Goldfarb

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    MBAs Will Turn Brownfields Into Green—if Investors Help Them Out (Quartz)

    Roosevelt Institute Fellow Georgia Levenson Keohane writes that the social venture competitions becoming common in MBA programs could push sustainability and social change, if Wall Street will fund the proposals.

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    MBAs Will Turn Brownfields Into Green—if Investors Help Them Out (Quartz)

    Roosevelt Institute Fellow Georgia Levenson Keohane writes that the social venture competitions becoming common in MBA programs could push sustainability and social change, if Wall Street will fund the proposals.

    Even As Jobs Numbers Seem Better… (Campaign for America's Future Blog)

    Unemployment claims have dropped, and the jobs lost in the recession have been restored, but that's just catch-up. Dave Johnson pulls job creation ideas from a new Roosevelt Institute report, "A Bold Approach to the Jobs Emergency: 15 Ways We Can Create Good Jobs in America Today."

    • Roosevelt Take: Read the full report, produced by the Bernard L. Schwartz Rediscovering Government Initiative.

    Low-Wage Workers Pay the Price of Nickel-and-Diming by Employers (LA Times)

    Michael Hiltzik points out that wage theft is most common in low-paid, labor-intensive, female-heavy industries. Without sufficient government enforcement, workers are forced to fight back on their own.

    What If the Minimum Wage Were $15 an Hour? (The Nation)

    Sasha Abramsky looks at the political situation in Seattle, where the push for a $15-an-hour minimum wage is taking center stage. He suggests that if Seattle pulls this off, it will dramatically shift the national conversation.

    • Roosevelt Take: Roosevelt Institute President and CEO Felicia Wong gave the closing remarks at Seattle's Income Inequality Symposium.

    Executive Pay: Invasion of the Supersalaries (NYT)

    Rising CEO pay is a major contributing factor to today's economic inequality, writes Peter Eavis. But there's disagreement on how to induce companies to pay CEOs less and average workers more.

    The Wall Street Second-Chances Rule: Scandal Makes the Rich Grow Stronger (The Guardian)

    Heidi Moore writes that on Wall Street, losses, bankruptcies, and even criminal investigations aren't enough to knock top CEOs out of the business. Profits conquer all, so even financiers embroiled in scandal keep their power.

    New on Next New Deal

    A Millennial’s Case for Fixing Social Security

    Brian Lamberta, Northeast Regional Communications Coordinator for the Roosevelt Institute | Campus Network, explains why and how Millennials should try to fix Social Security instead of giving up on it.

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  • A Millennial’s Case for Fixing Social Security

    Apr 11, 2014Brian Lamberta

    Instead of giving up of Social Security, Millennials should push an easy fix for the so-called funding crisis: lifting the earnings cap.

    Instead of giving up of Social Security, Millennials should push an easy fix for the so-called funding crisis: lifting the earnings cap.

    As a public policy student, I’m used to hearing lively debates and diverse perspectives from my professors, fellows students, and course materials. There is one issue on which they consistently agree: apparently, Social Security cannot work for my generation. Polling data confirms this sentiment. Between half and three-quarters of Millennials do not expect Social Security to exist when we retire. Despite all of the rhetoric and doubts, I know that Social Security can work for Millennials – but it’s crucial that we fix the program.

    I learned the importance of Social Security during my summer internship at The Alliance for Retired Americans, which was part of the Roosevelt Institute | Campus Network’s Summer Academy program. I learned that Social Security is the primary source of income for most seniors. The internship also taught me all about the program and its current issues, inside and out.

    To give some background, Social Security is the widest reaching public benefit program in the United States. Starting at age 62, almost all Americans are eligible to receive monthly checks based on the amount they or their spouse paid into the program during their working years, with the benefit amount increasing for those who delay taking payments. The benefits of Social Security for retirement must be earned – 12.4% of nearly everyone’s yearly income below an annually adjusted cap is taxed to fund the program. For 2014, the cap is set at $117,000. Any income above $117,000 is completely ignored, so a person earning $1,000,000 will pay a 2.2% tax rate in 2014 and person earning five-figures will pay a 12.4% rate. To put it another way, a millionaire finishes paying her Social Security taxes by mid-February (at the latest) while the average American pays those taxes all year long.

    Currently, there is a funding gap, which is often overstated as a “crisis.” Based on the Social Security Administration’s own predictions, only about three-quarters of benefits can be paid after 2033. Poor planning regarding the retirement of the Baby Boomers did not cause this gap. In preparation for the retirement of the Baby Boomers, we amended Social Security during the 1970s and 1980s; their retirement is almost entirely funded. This lapse (“the crisis”) is directly linked to the unintended consequences of reforming the taxable earnings cap in the 1970s.

    Since 1975, Congress has linked annual cap increases to the average growth in wages. Post-World War II wage growth has consistently favored higher earners, who already had total incomes above the cap. This led to two disturbing trends, the first of which is shown in this chart, taken directly from the Social Security Administration’s website:

     

     

    As seen here, the cap used to reduce taxes for many more Americans, but since the 1970s it's leveled out from reducing taxes for the top 15% to helping just the top 6%, establishing its status as a tool for the mega-rich to avoid paying taxes. Since the wealthiest Americans have benefitted most from wage growth in recent years, the amount of income that is untaxable for Social Security purposes has increased from 10% to 17% since 1975. In essence, the funding gap is a result of an antiquated and poorly calculated tax break that allows the wealthiest Americans to avoid paying their fair share.  

    Social Security can remain in perpetuity if we scrap the cap. Historically, regular adjustments have been applied to program to ensure its continued solvency, and this obvious change should be no different.

    Millennials: I urge you look more deeply into this issue and better understand the facts as the debate continues. Most of the money that our grandparents use to pay their bills comes from Social Security, so simply letting the program crumble would have disastrous effects. As a generation, we are far less likely to have union-backed pensions and extra money for savings. Fixing Social Security could be more necessary for our generation’s retirement stability than any before us.

    Brian Lamberta is an urban studies and public policy student at the CUNY Macaulay Honors College at Hunter College and currently serves as the Northeast Regional Communications Coordinator for the Roosevelt Institute | Campus Network.

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