Barry is a Senior Economist with the National Center for Policy Analysis, one of the most influential think tanks in America today.
The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, Social Security, welfare, criminal justice, education and environmental regulation.
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Daily Policy Digest
Provided courtesy of: http://www.ncpa.org/
Daily Policy Digest
- What Is the Tax Gap?
- 18 Dec 2014 07:00:58 CDT -
The American tax code is confusing. Senator Tom Coburn (R-Okla.) has released a 300-page report on the U.S. tax code, detailing just how complex filing taxes has become. Between 2001 and 2012, more than 4,600 changes were made to the tax code -- an average of more than one per day. As of 2012, the Internal Revenue Code was 9,000 pages long.
That the tax code is complex is evidenced by the amount of time Americans spend complying with it:
- Americans spend 6.1 billion hours annually complying with IRS filing requirements, which Coburn notes is equal to an entire year's work for 3 million full-time workers.
- Most people rely on third parties to prepare their taxes. For individual filers, 59 percent used tax preparers in 2010, and 30 percent used tax software.
- Businesses also use tax preparers, and compliance is especially costly for small businesses -- according to the NFIB, it costs small businesses 67 percent more to comply with the tax code than it costs large businesses.
- Small businesses spend between $18 and $19 billion annually in tax compliance costs. That money, the report says, could otherwise "be used to hire new employees, invest in research and development, or market products."
There is another cost to this complexity: the tax gap. The tax gap is the difference between the amount owed to the federal government and the amount actually paid; in 2006 (the most recent data available), that gap was at $450 billion. It dropped to $385 billion after late payments were made and the IRS took enforcement action. The government's collection rate for that year was 86 percent, in line with previous rates. If these trends continue, the 2014 tax gap will be close to $500 billion; were it paid, the Coburn report says the entire 2014 deficit ($483 billion) could disappear.
How to close the tax gap? The report offers a few options, one of which is to prevent serious tax delinquents from being employed by the federal government, as their salaries are paid by taxpayers. According to a 2013 IRS report, 318,000 federal workers owed more than $3.3 billion in federal taxes, not including the taxpayers already paying back tax debts through installment agreements.
But, according to the report, the easiest option would be to make the tax code simpler and eliminate the likelihood of mistakes. Not only do payment errors result from the complexity, but more complexity leads to more confusion, with the IRS increasingly unable to meet its demands:
- The IRS saw an increase in phone calls from taxpayers seeking help from 71 million to 108 million between 2004 and 2012.
- Over that same time, the number of phone calls answered fell from 36 million to 31 million.
- During the same period, the IRS had a written correspondence backlog that tripled from 357,151 cases to 1,028,539 cases.
The report also notes that an overly complex tax code opens the door to tax avoidance, and taxpayers look for loopholes and ambiguities hidden within its 9,000 pages.
Source: "Tax Decoder," Office of Senator Tom Coburn, December 2014.
For more on Tax and Spending Issues:
- Economic Pessimism after the Recession
- 18 Dec 2014 07:00:57 CDT -
How do Americans today feel about the American dream? Karlyn Bowman, Jennifer K. Marsico and Heather Sims of the American Enterprise Institute analyzed polls over the last several decades, finding that 13 percent of Americans in 1986 said the American dream had no meaning for them, according to a Wall Street Journal poll. When that same question was asked by the Washington Post and the Miller Center in 2013, that figure had risen to 19 percent. In both polls, over 60 percent of Americans said the American dream had meaning.
Much of the skepticism toward people's ability to succeed in today's economy has roots in the 2008 financial crisis, say the authors. According to polls:
- Just 29 percent of Americans believe the recession created temporary changes in the economy, while 71 percent believe the recession had created a permanent change in economic conditions.
- In 1952, just 8 percent of Americans believed that the average person had little opportunity to succeed in America. In 2013, 43 percent of respondents in a Gallup poll agreed with that statement.
- In 2000, almost three-quarters of Americans said that, compared to their parents, their opportunities to succeed were better, while 5 percent said they were worse. In 2014, 42 percent said their opportunities were better than their parents' opportunities, while 32 percent contended they were worse.
- In 1990, 50 percent of Americans believed the next generation of children would have a better life than the current generation; in 2014, just 21 percent of Americans agreed.
However, Bowman, Marsico and Sims note that there are certain consistencies across time in Americans' perceptions about the American dream. For example, 61 percent of Americans in 2012 rated their own standard of living as being better than their parents' standard of living. Two decades ago, 63 percent of people agreed.
Source: Karlyn Bowman, Jennifer K. Marsico and Heather Sims, "Public opinion and the American Dream," American Enterprise Institute, December 15, 2014.
For more on Economic Issues:
- New Department of Education Rules Target Single-Sex Classrooms
- 18 Dec 2014 07:00:56 CDT -
Some public schools use single-sex classrooms and teaching techniques based on students' genders, but the programs may not last. Lydia Wheeler reports for The Hill that the Department of Education has issued new guidance on the use of single-sex classrooms in the public school system.
In 2006, new regulations expanded the ability of public schools to offer education based on students' gender, allowing school districts to offer voluntary single-sex classes and schools. But various groups have been challenging the policies, arguing they violate federal law by not providing equal educational options. The ACLU has sued schools in four states and filed 10 complaints with the Department of Education's civil rights division:
- One of its lawsuits was filed in 2009 against a Louisiana middle school that offered all-girl and all-boy classes and in which the girls' classes included quizzes about bracelets while the boys were given quizzes that involved bikes.
- The school assigned the book "Where the Red Fern Grows" to boys and "The Witch of Blackbird Pond" to girls, which challengers say was based on stereotypes that boys like hunting, whereas girls prefer love stories.
But proponents of single-sex schooling say that using different teaching styles for boys and girls can be very effective for some students, and offering single-sex classes can allow teachers to engage those students. Boys, for example, tend to enjoy competing with friends, and school districts offering boy-only classes have employed competitive team activities in their classrooms. But the approach does not work as well with girls, says Leonard Sax, founder of the National Association for Single Sex Public Education, who tend to enjoy competing against strangers, but not against their friends.
The new Department of Education rules will likely make single-sex education difficult to offer:
the rules require co-ed public schools to identify their objectives in offering single-sex classes and not rely on gender stereotypes. Programs must be evaluated every two years.
Source: Lydia Wheeler, "Feds target 'sex stereotypes' in US classrooms," The Hill, December 13, 2014.
For more on Education Issues:
- Millennials Leaving the Government Workforce
- 18 Dec 2014 07:00:55 CDT -
How do millennials feel about government? J.D. Tuccille, managing editor at Reason.com, reports that the younger generation's perceptions of government may be changing.
According to a report in the Washington Post, just 7 percent of Americans employed by the federal government were under the age of 30, despite the fact that 25 percent of the American labor force is under the age of 30. Moreover, 9 percent of federal workers who left government employment in 2013 were under 30.
Why are they leaving? Tuccille points to a bureaucratic culture and limited opportunities after hiring. According to a 2014 survey from the government's Office of Personnel Management, millennials do tend to feel less positive about their own work than those in other generations: just 63 percent of government millennial workers said their work gave them "a feeling of personal accomplishment," compared to 71 percent among other generations. Similarly, just 75 percent of millennials said that they liked the work that they did, compared to 83 percent for other generations.
Tuccille says the less favorable view of government extends beyond millennials' own employment experiences. Forty-two percent of millennials in 2009 said the government was "unusually inefficient and wasteful," compared to 60 percent of Americans over 30 who held that view. But this year, 66 percent of millennials agreed with the statement.
Source: J.D. Tuccille, "'Pro-Government' Millennials Take Government Jobs, Discover They Suck, Move to the Private Sector," Reason.com, December 17, 2014.
For more on Government Issues:
- U.S. Carbon Emission Cuts Will Raise Energy Costs
- 18 Dec 2014 07:00:54 CDT -
United Nations' countries recently gathered in Lima, Peru, to develop a framework for greenhouse gas reduction. Tom Tanton, senior research fellow at the Reason Foundation, writes that the United States wants other nations to voluntarily reduce their carbon emissions. Already, the United States has pledged in an agreement with China to reduce its emissions by more than 25 percent below 2005 levels by 2025. Moreover, American businesses face increasing numbers of costly environmental regulations.
China has the highest carbon dioxide emissions in the world, followed by the United States. However, American "emissions intensity" is better than most nations -- the United States uses a much smaller amount of energy than other nations producing a comparable amount of goods. Tanton notes that American companies can produce a dollar of goods using just 30 percent of the energy that Chinese businesses would use to produce a dollar of goods. Thanks to new technologies such as fracking, America's energy efficiency has increased in recent years; in 2013, the United States increased its electricity consumption yet its carbon dioxide emissions were 15 percent below 2005 levels.
Tanton writes that imposing emissions reductions domestically will only hurt the United States. With greater carbon dioxide regulation, domestic energy and production costs will rise, hurting the American economy. Moreover, says Tanton, most other nations will not require similar cuts to their carbon dioxide emissions. As such, energy-intensive businesses may flee overseas, offsetting any benefits from emission reductions in the United States.
Source: Tom Tanton, "To 'Beat' Climate Change, the U.S. Will Pick Up the World's Tab," Real Clear Markets, December 12, 2014.
For more on Environment Issues:
- Despite Steady Temperatures, Policymakers Plow Forward with Climate Change Agenda
- 17 Dec 2014 07:00:53 CDT -
While pundits continue to talk about the dangers of global warming, the globe actually hasn't seen warming since 1998, says Institute for Energy Research CEO Robert Bradley. Despite increases in carbon dioxide emissions, Bradley notes that the world has not seen the explosion in extreme weather events, famine or loss of ice forecast by warming activists. In fact, he cites research from scientist Roy Spencer who analyzed 90 different climate models and found that 95 percent of climate simulations have overestimated warming since 1979.
Despite this reality, Bradley says lawmakers and government actors are doubling down on global warming policies:
- The United Nations is working on a global agreement to combat warming by limiting greenhouse gas emissions.
- The United States and China recently entered into an agreement that could require U.S. carbon emissions to fall by 28 percent below 2005 levels.
- The EPA is plowing forward with its Clean Power Plan rules to limit carbon emissions from coal-fired power plants. Research firm Energy Ventures Analysis says the plan would increase customers' household energy costs by 35 percent between 2012 and 2020.
- President Obama has refused to approve the Keystone XL pipeline out of concerns about the environment, despite a State Department report concluding the pipeline will have no impact on emissions.
- Senators Sheldon Whitehouse (D-N.H.) and Brian Schatz (D-HI) have introduced a $2 trillion tax bill that would tax carbon emissions at $42 per ton.
And climate legislation is not limited to the national level. Bradley writes that city councilmen in Berkeley, California, recently voted to put stickers on all gas pumps reminding drivers that emissions lead to global warming.
When it comes to global warming, policymakers are out of touch with reality, as well as out of touch with everyday voters -- Bradley notes that just 3 percent of voters identified climate change as the United States' biggest concern in a recent Reuters poll.
Source: Robert Bradley, "Doubling Down On Climate Alarmism," Forbes.com, December 1, 2014.
For more on Environment Issues:
Health Policy Digest
Provided courtesy of: http://www.ncpa.org/
Consumer Driven Health Care
- Health Care Reform Tax Will Hurt Franchisees
- 04 Oct 2011 12:43:58 GMT - When the employer mandates go into effect in 2014, many franchised businesses will be motivated to reduce the number of locations and move workers from full-time to part-time status...
REAL CLEAR MARKETS
- Saving Jobs from Health Reform's Harmful Regulations
- 04 Oct 2011 12:43:58 GMT - If the rate of health care cost growth had not exceeded general inflation, a typical family would have had $545 more per month in spendable income instead of $95 -- a difference of $5,400 per year...
- Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
- 04 Oct 2011 12:43:58 GMT - Gaining health insurance and using more primary care services leads to more hospitalizations as a result of physicians' discretionary decisions regarding aggressive and intensive treatment...
AMERICAN ENTERPRISE INSTITUTE
- The Case for Competition in Medicare
- 04 Oct 2011 12:43:58 GMT - A well-functioning marketplace would set in motion the forces needed to transform American medical care into a model of efficient patient-centered care...
- Potential Effect of Health Care Reform on Emergency Department Utilization Not Clear
- 04 Oct 2011 12:43:58 GMT - In 2010, 71 percent of emergency physicians said that they expected emergency department visits to increase due to the implementation of the Affordable Care Act...
NEW ENGLAND JOURNAL OF MEDICINE
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