Tag Archives: social safety net

Biden Administration, Build Back Better, Climate Action, Economic Development, Infrastructure, Joe Biden, Taxes

Analysis: Build Back Better Legislation Will Reduce Deficits

Analysis by US Treasury tax policy expert Lily Batchelder indicates that the Build Back Better legislation would generate $2 trillion, fully paying for its investments in families, workers and climate, and actually reduce deficits. © Karen Rubin/news-photos-features.

By: Lily Batchelder, Assistant Secretary for Tax Policy

The Build Back Better invests meaningfully in American families and workers, while laying the foundation for meeting imperative climate goals. When the President released the Build Back Better framework last week, he proposed $2 trillion in savings that would more than pay for the critical investments in the legislation – and in fact generate net deficit reduction.  With the release of the text of the Build Back Better Act in the House and scoring from the Joint Committee on Taxation, we can update the estimate of fiscal savings.

The legislation would, as the President proposed, generate more than $2 trillion in savings. These savings come from ensuring large multinational corporations and wealthy Americans pay their fair share and reducing the cost of prescription drugs. These provisions will not raise taxes on any taxpayer making less than $400,000.

The table below includes the latest estimates by the Joint Committee on Taxation, Congressional Budget Office, and the Treasury Department of the revenue raising provisions in the bill. The bottom line is that the Build Back Better Act under consideration in the House of Representatives will be fully paid for and reduce the deficit.

At the crux of reforms to the tax code is a historic overhaul of the international tax regime, whose global adoption has been successfully negotiated with 136 countries representing nearly 95% of the world’s economy. As a result of these changes, the ability of large corporations to shift profits abroad will be substantially limited, and the race to the bottom in corporate taxation will no longer be a driving force weakening capital taxation. The Build Back Better Act adopts the agreed-upon 15% country-by-country minimum tax on the foreign profits of U.S. multinational corporations and includes strong incentives for any hold-out countries to join the agreement through a separate tax on companies based in such hold-out jurisdictions. Together with other international and business tax reforms and loophole closers, these provisions are estimated to generate over $350 billion in additional U.S. tax revenue.  

The Act further ensures that large, profitable corporations will pay a minimum amount of tax by imposing a 15% minimum tax on companies that report over $1 billion in profits to their shareholders. Less than 0.00075% of U.S. businesses will owe this tax in a given year, which will raise more than $300 billion over the course of the next decade.

Over $200 billion is generated from a surtax on multi-millionaires (the top 0.02% of taxpayers making $10 million or more annually), and about $400 billion comes from closing loopholes that allow some wealthy taxpayers to avoid paying Medicare taxes on their earnings and permit well-off taxpayers to offset ordinary income with business losses.

The largest pay-for in the bill is not a tax increase at all. By collecting taxes that are already owed—and disproportionately unpaid by the highest-earners—the Build Back Better Act will generate at least $400 billion in additional revenue. Over the last decade, an under-resourced IRS has been unable to appropriately focus attention on top earners who are most responsible for the tax gap. Indeed, audit rates decreased more over that period for high earners than for Earned Income Tax Credit recipients. This additional revenue will result from providing the IRS with much-needed resources to pursue wealthy tax evaders, modernize outdated technological infrastructure, and provide meaningful taxpayer services.

Even beyond their sizable revenue-raising potential, these collective policies make the American economy more competitive by reducing profit shifting, ending a corporate tax race to the bottom, and overhauling a two-tiered system of tax administration—where American workers pay what they owe, but the wealthiest often do not.

These are historic policy achievements in and of themselves—and they also pay for transformational investments that will improve the lives of American workers, our children, and the generations that will follow.    

Revenue Raisers in Build Back Better Act

 Revenue
(in billions)
 
International and Other Business Reforms		 
$371
15% Minimum Tax on the Largest Corporations$319
AGI Surtax for Multi-Millionaires$228
Medicare Tax Loophole for High Earners$252
Limit Business Losses for High Earners$160
Stock Buybacks$124
IRS Investments in Compliance, IT, and Taxpayer Services*$400
Reduce the Cost of Prescription Drugs**~$250
Other Provisions$47
 
Total		 
~$2,151
 
Unless otherwise noted, all estimates are from the Joint Committee on Taxation.

* Source: U.S. Department of the Treasury.

** Source: The framework released by the White House last week proposed repealing the prescription drug rebate rule as negotiations continued on prescription drug reform. Based on the Congressional Budget Office, adjusted downward for reforms in bipartisan infrastructure framework, this would have saved about $150 billion. Other components of the Administration estimate the deal reached on prescription drug reform announced this week, which includes additional reforms, will generate about an additional $100 billion in savings, based on Congressional Budget Office estimates of prescription drug negotiations in previous legislation. A more precise CBO estimate will be available in the future.
 

Congress, Economic Policies, Economy, Financial Protection, Government spending, Health Care, Inequality, Republicans, Tax Reform, Taxes, Trump Administration

Trump, Republicans’ Dickens Vision of America: Where Money is Entitlement, ‘Please Sir, I’d Like Some More’

Long Islanders protesting for the 99% against foreclosures by banks too big to fail, bailed out by taxpayers. The Republican tax scam, combined with Trump deregulation and obliteration of the Consumer Financial Protection Bureau, sets up an even greater Recession and foreclosures. Seniors on Long Island, facing the inability to deduct state and local taxes and the likelihood of Republican cuts to Social Security and Medicare, will be forced out of their homes. © Karen Rubin/news-photos-features.com

by Karen Rubin, News & Photo Features

This is supposedly the season of “giving,” of “good will to all mankind.” Not with Donald Trump in the White House.

Trump is so giddy to take credit for displacing “Happy Holidays” with “Merry Christmas.” That’s all he cares about. But just as Trump, who makes money off of hotels but has no concept of “hospitality” and is more like the craven Snidely Whiplash than Barron Hilton, he has no clue and no care what “Christmas” means.

Indeed, this Christmas, 9 million children and pregnant women are losing access to health care and the ability to live a good life or realize their full potential. 13 million Americans don’t know if they will be able to afford or access health care.  800,000 Dreamers don’t know whether they will be thrown out of jobs, housing, and the nation, exiled to a country that is completely foreign to them. Seniors and retirees don’t know if they will be able to continue to afford living in their homes and whether their Medicare and Social Security benefits will be cut.

The Tax Scam rammed through by Republicans is just the beginning: they are giddy about how adding $1.5 trillion to the national debt, the same amount (coincidentally) that it redistributes from working people to the already obscenely rich and richest corporations sitting on $2 trillion in cash they refuse to use to raise wages will “justify” slashing the social safety net, cutting Medicare, Social Security, Medicaid – you know the so-called “entitlements” that working people have paid into their entire working lives.

Trump made it clear, in his ignorant, short-hand way, what will come next, in his speech in St. Louis:

“Then we will have done tax cuts, the biggest in history…I know people, they work three jobs and they live next to somebody who doesn’t work at all. And the person who’s not working at all and has no intention of working at all is making more money and doing better than the person that’s working his and her ass off. And it’s not going to happen. Not going to happen. (Applause.) So we’re going to go into welfare reform.”

You only have to look at what is happening in every quarter of civic life which is shifting the balance to the wealthiest while cutting off upward mobility for anyone else. The Trump FCC’s plan to overturn net neutrality is exactly that: it cements the control that the internet oligopoly wields not only to keep out upstart competitors but control what information or culture gets wide viewing. What Pai wants is for money to rule both content and access (that’s what “free market” means). Don’t have money to keep an internet subscription so you can access news, information or jobs? Tough luck. But the FCC intends to couple this with more government surveillance of what goes up over the Internet – quite literally the worst of both worlds.

It is apparent also in how Trump is pawning off national monuments to commercial exploitation – Bears Ears, Grand Staircase-Escalante, the Arctic Refuge and the Atlantic Marine Sanctuary – basically stealing what is our collective heritage and birthright to give to commercial interests. Interior Secretary Ryan Zinke, who has no compunction to waste taxpayer money for his own use, is even raising admission fees to the national parks, further putting what is owned by all Americans off limits for those who can’t pay the freight.

Money is the new “entitlement.” It determines who can afford to weigh the scales of justice in their favor, and, thanks to Citizens United, who runs for election and wins, and therefore what policy gets written and enacted, and even who has access to the voting booth. Billionaire venture capitalist Tom Perkins actually said that out loud: “But what I really think is, it should be like a corporation. You pay a million dollars in taxes, you get a million votes. How’s that?” Indeed.

This mentality is actually seeping down even into the disasters that have become all too common and catastrophic because of climate change: Freakonomics did a segment that a free market rather than anti-gouging laws should come into play after a disaster. A shopkeeper should be able to sell a bottle of water for $1000 to the father with a child dying of thirst if he wants to, because at $2 a bottle, someone will hoard. (The absurdity is that purchases are rationed for the rich and the poor.)

Another segment suggested that people should be able to pay their way (a premium) to jump a line – that’s okay for a themepark, but they are suggesting the same for access to life-saving organ donation.

Trump is the first president to dare do what the Republicans have been salivating over since the New Deal but dared not do. It’s not that the Republicans haven’t had their sights set on reversing every progressive policy since the 1860s. (Alabama Senate candidate, the defrocked judge Roy Moore, said that every Amendment after the 10th, the state’s rights one, should be abolished, including the 13th amendment ending slavery, 14th amendment giving due process, the 19th amendment giving women the right to vote. Meanwhile, the Republicans are about to cancel the 10th amendment’s State’s Rights provision in order to require New York State to accept Conceal Carry Reciprocity and overturn its own gun safety laws.)

You actually have Senator Chuck Grassley defending abolishing the estate tax which affects only a tiny fraction of the wealthiest families and was intended since the founding to prevent an institutionalized aristocracy, argue that the previous tax code favors poor and working-class Americans who were “just spending every darn penny they have, whether it’s on booze or women or movies.”

Utah’s Orrin Hatch, justifying shifting $1.5 trillion in tax breaks to the wealthy and corporations and slashing the social safety net, declared, “I have a rough time wanting to spend billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger, and expect the federal government to do everything.”

Merry Christmas? Bah humbug.

“And so how do we as Christians respond, who serve a God whose prophets call for welcoming immigrants (Deuteronomy, Leviticus), caring for the orphans and widows (Jeremiah, Ezekiel), establishing fair housing (Isaiah), seeking justice (Micah 6), and providing health care (Isaiah),” a twitter conversation between MSNBC’s Joy Reid and Susan Gilbert Zencka wrote.

“What you’re witnessing tonight in the United States Senate is the weaponization of pure, unmitigated greed,” Joy Reid wrote after the Senate’s adoption of its tax plan. “Lobbyists are writing the bill in pen at the last minute. And Republicans are no longer even pretending to care about anyone but the super rich,“ wrote Joy Reid.

The America that Trump and the Republicans envision is not one of an American Dream where anyone who has the ability and works hard enough can rise up, but one in which communities must beg billionaires for funding for a public school, a library, a hospital, and be very grateful for their charity.

Tell me how this is not a modern, nonfiction version of Dickens’ “Oliver Twist.”

“Please sir, I’d like some more.”

________________________

© 2017 News & Photo Features Syndicate, a division of Workstyles, Inc. All rights reserved. For editorial feature and photo information, go to www.news-photos-features.com, email [email protected]. Blogging at www.dailykos.com/blogs/NewsPhotosFeatures.  ‘Like’ us on facebook.com/NewsPhotoFeatures, Tweet @KarenBRubin

Poverty, Social Safety Net

White House Report: SNAP Food Stamps Program Lifted 4.7 Million Out of Poverty in 2014

A new report released today from the White House Council of Economic Advisers (CEA) finds that the Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, is highly effective at reducing food insecurity—the government’s measure for whether households lack the resources for consistent and dependable access to food. The report highlights a growing body of research that finds that children who receive food assistance see improvements in health and academic performance and that these benefits are mirrored by long-run improvements in health, educational attainment, and economic self-sufficiency. The report also features new research that shows benefit levels are often inadequate to sustain families through the end of the month—resulting in high-cost consequences, such as a 27 percent increase in the rate of hospital admissions due to low blood sugar for low-income adults between the first and last week of the month, as well as diminished performance on standardized tests among school age children.

Each month, SNAP helps about 46 million low-income Americans put food on the table. The large majority of households receiving SNAP include children, senior citizens, individuals with disabilities, and working adults. Two-thirds of SNAP benefits go to households with children.

Today’s CEA report draws on a growing body of high-quality research about food insecurity and SNAP, finding that:

SNAP plays an important role in reducing both poverty and food insecurity in the United States—especially among children.

  • SNAP benefits lifted at least 4.7 million people out of poverty in 2014—including 2.1 million children. SNAP also lifted more than 1.3 million children out of deep poverty, or above half of the poverty line (for example, $11,925 for a family of four).
  • The temporary expansion of SNAP benefits under the American Recovery and Reinvestment Act of 2009 (ARRA) lifted roughly 530,000 households out of food insecurity. 

SNAP benefits support vulnerable populations including children, individuals with disabilities, and the elderly, as well as an increasing number of working families.

  • Nearly one in two households receiving SNAP benefits have children, and three-quarters of recipient households have a child, an elderly member, or a member with a disability. Fully 67 percent of the total value of SNAP benefits go to households with children as these households on average get larger benefits than households without children.
  • Over the past 20 years, the overall share of SNAP recipient households with earned income rose by 50 percent. Among recipient households with children, the share with a working adult has doubled since 1990.

SNAP’s impact on children lasts well beyond their childhood years, providing long-run benefits for health, education, and economic self-sufficiency.

  • Among adults who grew up in disadvantaged households when the Food Stamp Program was first being introduced, access to Food Stamps before birth and in early childhood led to significant reductions in the likelihood of obesity and significant increases in the likelihood of completing high school.
  • Early exposure to food stamps also led to reductions in metabolic syndrome (a cluster of conditions associated with heart disease and diabetes) and increased economic self-sufficiency among disadvantaged women.

SNAP has particularly large benefits for women and their families.

  • Maternal receipt of Food Stamps during pregnancy reduces the incidence of low birth-weight by between 5 and 23 percent.
  • Exposure to food assistance in utero and through early childhood has large overall health and economic self-sufficiency impacts for disadvantaged women. 

The majority of working-age SNAP recipients already participate in the labor market, and the program includes important supports to help more recipients successfully find and keep work.

  • Fifty-seven percent of working-age adults receiving SNAP are either working or looking for work, while 22 percent do not work due to a disability. Many recipients are also the primary caregivers of young children or family members with disabilities.
  • SNAP also supports work through the Employment and Training program, which directly helps SNAP beneficiaries gain the skills they need to succeed in the labor market in order to find and retain work. During fiscal year 2014, this program served about 600,000 SNAP recipients. 

Even with SNAP’s positive impact, nearly one in seven American households experienced food insecurity in 2014.

  • These households—which included 15 million children—lacked the resources necessary for consistent and dependable access to food.
  • In 2014, 40 percent of all food-insecure households—and nearly 6 percent of US households overall—were considered to have very lowfood security. This means that, in nearly seven million households, at least one person in the household missed meals and experienced disruptions in food intake due to insufficient resources for food. 

While SNAP benefits allow families to put more food on the table,current benefit levels are often insufficient to sustain them through the end of the month, with substantial consequences.

  • More than half of SNAP households currently report experiencing food insecurity, and the fraction reporting very low food security has risen since the end of the temporary benefits expansion under ARRA.
  • New research has linked diminished food budgets at the end of each month to high-cost consequences, including:

o   A drop-off in caloric intake, with estimates of this decline ranging from 10 to 25 percent over the course of the month;

o   A 27 percent increase in the rate of hospital admissions due to low blood sugar for low-income adults between the first and last week of the month;

o   An 11 percent increase in the rate of disciplinary actions among school children in SNAP households between the first and last week of the month;

o   Diminished student performance on standardized tests, with performance improving only gradually again after the next month’s benefits are received.

Administration Efforts to Build on Progress

To reduce hunger and improve family well-being, the Obama administration has been and remains dedicated to providing American children and families with better access to the nutrition they need to thrive. These investments make a real and measurable difference in the lives of children and their families, and ensure a brighter, healthier future for the entire country.

Through the Recovery Act, the Administration temporarily increased SNAP benefits by 14 percent during the Great Recession to help families put food on the table.  Reports indicate that food security among low-income households improved from 2008 to 2009 amidst a severe recession and increased unemployment; a significant part of that improvement is likely attributable to SNAP.

The Administration has also developed several initiatives to improve food security and nutrition for vulnerable children.  Through the Community Eligibility Provision, schools in high-poverty areas are now able to offer free breakfast and lunch to all students with significantly less administrative burden. Recent revisions to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) added a cash benefit to allow participants to purchase fruits and vegetables, a change that substantially increased the value of the package. The Administration also has expanded access for low-income children to nutritious food during the summer months when school meals are unavailable and the risk of food insecurity is heightened. The results of these efforts have been promising. In 2014, the U.S. Department of Agriculture (USDA) delivered 23 million more summer meals than in 2009.  And the Administration has successfully implemented Summer Electronic Benefits Transfer for Children (SEBTC) pilots, which provide additional food assistance to low-income families with children during the summer months. These pilots were found to reduce very low food security among children by 26 percent.  The President’s 2016 Budget proposed a significant expansion of this effort.

Finally, this Administration has provided select states waivers to test ways of reducing the administrative burdens of SNAP for elderly households, a population that continues to be underserved. After seeing positive results in participating states, including an increase of elderly participation by more than 50 percent in Alabama, the President’s 2016 Budget included a proposal to create a state option that would expand upon these efforts to improve access to SNAP benefits for the elderly.