Wealth Inequality
A great visual of wealth inequality in the US: Put in real numbers, in the period of 2008-10, the top 1% wealthiest Americans had net worths of at minimum $8.4 million. (69 times that of the median US household)
Author Archives: Tom Merritt
San Francisco’s Housing Dilemma
Most people from the Bay Area are likely familiar with the absurdly high rent and house prices in San Francisco. And in recent years prices have only been getting worse, pushing out large numbers of San Francisco’s lower-income residents. Currently, the median rent in the city is $1,463 a month, the highest in the country among large cities. Much of the blame for skyrocketing rents has fallen on the large influx of wealthy residents to the city, many in the booming tech industry centered in nearby Silicon Valley. While I share some of the anti-gentrification sentiment and hope that the Continue reading San Francisco’s Housing Dilemma
Subsidizing Megabanks
The bank bailouts of 2008 set a benchmark for how far the US and European governments will go to protect large financial institutions. It essentially said to these banks, shame on you for your shady investment practices, but you’re too important to the economy to pay the true cost of your bad decisions. And now that government protection of financial institutions has been established, these banks can reap the reward of an effective ‘government guarantee’ on their investments. According to an article from the New York Times Economix Blog citing a recent study by the I.M.F., this effective ‘government guarantee’ Continue reading Subsidizing Megabanks
The Real Job Creators
Job Creators. It’s a term that’s been thrown around a lot in the media in recent years. It’s most commonly used as a term of endearment for wealthy business owners, usually in an attempt to defend them from new taxes or regulations that would hurt their bottom line, and by the media’s logic, hurt the labor market. In this view, the wealthy are like benevolent dictators, creating jobs only when taxes and regulations are to their liking. But this simply isn’t the case. As venture capitalist Nick Hanauer points out, businesses do not just generate jobs out of the goodness Continue reading The Real Job Creators
Poverty, Equitable Taxation, and the Earned Income Tax Credit
Along with his proposal to raise the minimum wage, President Obama is trying to tackle poverty with a broad expansion of the Earned Income Tax Credit (EITC). The EITC program essentially gives those earning around and below the federal poverty line ($12,566 a year) a tax credit when they file their taxes. In 2012, it helped lift 6.5 million Americans, including 3.3 million children, out of poverty. President Obama is currently proposing a $60 Billion expansion of the tax credit’s benefits over 10 years. The program’s expansion will in part help to provide greater benefits to childless workers. Currently, the Continue reading Poverty, Equitable Taxation, and the Earned Income Tax Credit
Are Local Tax Incentives for Businesses Worth Their Cost?
For my senior thesis, I examined how cities react to economic decline. An all too common reaction by local governments is to offer more and more tax rebates and monetary incentives to try to attract large businesses. These incentives can range from sales, corporate, and property tax reductions, to guaranteed loans, and in some cases straight up cash. In total, local governments in the US spend $80 billion a year on business incentives. An article in the New York Times from 2012 paints a good picture of the problem. Now you may say, “Well isn’t it worth it in some cases for Continue reading Are Local Tax Incentives for Businesses Worth Their Cost?
Looking Closer at the US Farm Bill: Food Stamps
In the most recent US Farm Bill signed by President Obama, Food Stamps are set to be cut $8 billion over the next decade. This comes after a discontinuation of the $5 billion a year increase in funding that was allocated because of increased need during the recession. Also known as the Supplemental Nutritional Assistance Program (SNAP), the program provided assistance to 46.8 million Americans in 2013, a full 15.1% of the US population. Supporters of the recent cuts argue that programs like SNAP create a “dependence” on government and reduce incentives to work, while opponents point out that without SNAP, an Continue reading Looking Closer at the US Farm Bill: Food Stamps
Keystone XL Economics Part II
Following up on Collin’s article yesterday, I want to add an additional perspective on the economics of the Keystone XL pipeline. First off, while the State Department report on the Keystone XL pipeline suggested that the pipeline will probably not increase greenhouse gas emissions, a report by the nonpartisan Congressional Research Service found that the pipeline would increase greenhouse gas emissions anywhere between 3 and 21 million metric tons annually, assuming that the pipeline will accelerate tar sands oil production. This is mainly due to the fact that refining tar sands oil is far more energy intensive than refining normal crude oil. Another environmental Continue reading Keystone XL Economics Part II
More Evidence on the Effects of Raising the Minimum Wage
Following up on Collin’s article “$15 Minimum Wage.. It’s Happening Now”, the CBO has recently released it’s report on the economic impact of raising the minimum wage to $10.10 an hour. A New York Times Economix Blog article pulls a few nuggets from the report: -An estimated 16.5 million low-wage workers will see their wages increase as a result of the minimum wage increase. -900,000 people who are currently impoverished will move above the poverty threshold. -Raising the minimum wage will reduce low-wage employment by roughly 500,000. The article even questions the employment loss estimates as being too high, noting that the most precise Continue reading More Evidence on the Effects of Raising the Minimum Wage
How Should Governments Deal With Poverty?
With all the recent political debate over food stamp cuts and raising the minimum wage, the U.S. government is facing difficult questions of not only how to provide assistance to those living in poverty, but also how much. Brazil, on the other hand, is taking a much simpler approach: Just give people money. According to an article in the Washington Post, in 2002, Brazil began simply giving cash, loaded onto a card, to those living in poverty. Currently, 14 million people in Brazil are receiving these cash transfers. There is only one catch: these benefits are contingent on children in Continue reading How Should Governments Deal With Poverty?