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Pre-2005 Content Archive

Report

Podcast: Discussing the May Employment Report and What it Means for the Economy

 "[May's] jobs report shows a labor market that is still deteriorating but that offers signs that the worst of the current recession may be over.

"Job losses in May, while still high at 345,000, were less than half of January’s level. The unemployment rate jumped to 9.4 percent but, for the second month in a row, the labor force grew as more people entered it to look for work than left it."

Duration: 4:10

Report

Podcast: Will Fischer, Senior Policy Analyst, on the Section Eight Voucher Reform Act

The Section 8 Voucher Reform Act (SEVRA) would take a series of important, timely steps to strengthen the voucher program, the nation's most widely-used low-income housing program.  At a time when poverty and homelessness are rising, this bill would make housing affordable to more needy families, and provide more flexible and effective assistance.

Duration: 3:56

Report

Limiting the Tax Exclusion for Employer-Sponsored Insurance Can Help Pay for Health Reform

Key Findings

  • Congress is unlikely to be able to finance health reform legislation that includes universal coverage unless it limits the exclusion of employers’ health insurance payments from workers’ income and payroll taxes.
  • The nation’s costliest tax subsidy, the employer exclusion is not focused on those who most need help affording coverage, and it contributes to greater health care spending.
  • Limiting the exclusion can provide a significant source of financing for health reform without eroding employer-sponsored health insurance or causing other undesirable effects — if both the limit and the rest of the legislation are well designed, including a provision barring insurers from varying premiums based on the health of enrollees. 
  • The limit should contain several features that past cap proposals have lacked.  For example, the limit can be adjusted to reflect the age of a firm’s workforce and regional variations in health care costs, so that people are not disadvantaged because of where they live or work.  A limit also can readily be designed so no type of family or household is disproportionately affected.
  • The limit also should cover other types of health benefits that employees may receive as tax-exempt compensation, such as flexible spending accounts, premium conversion, health reimbursement arrangements, and health savings accounts. Otherwise, employers and employees could circumvent the limit to some degree.
Report

Holding Down Increases in Utility Bills Is a Flawed Way To Protect Consumers While Fighting Global Warming

Key Findings

  • To protect consumers from the higher energy prices resulting from a cap on greenhouse-gas emissions, some have proposed using a substantial portion of the proceeds from climate legislation to give local utility companies subsidies to hold down increases in their customers’ bills. This approach has three flaws.
  • First, it would offset half or less of the added costs that households would face under an emissions cap, because the majority of the added costs come in areas other than home utility bills.
  • Second, it relies on state utility regulators to ensure that the local utility companies use the subsidies to produce well-targeted and effective consumer relief, but the quality of state regulation of utilities is uneven across the country.
  • Third, as the Congressional Budget Office and leading economists have noted, incentives to conserve home energy would be weaker, which would keep home energy consumption higher than it otherwise would be. That, in turn would force emissions reductions outside the utility sector to be greater, pushing up the prices of gasoline and other energy-related products further and increasing the economic cost of meeting the emissions cap.
  • A more straightforward and effective way to provide consumer relief would be to provide consumers with direct refunds through an energy rebate paid for with some of the proceeds from auctioning emissions allowances.
Report

Ensuring Affordable Health Coverage and Health Care Services in an Insurance Exchange

Key Findings

  • Most uninsured people cannot afford to pay for health coverage on their own, so they will need subsidies to help them pay for coverage.
  • Low- and moderate-income people also need protection against high deductibles and co-payment charges. Even relatively modest changes cause such individuals to forgo needed care, research shows.
  • Accordingly, a cap should be placed on the total out-of-pocket costs that low-and moderate-income families must bear (as is done under the Children’s Health Insurance program). These families should have access to health plans without high deductibles, so people who are sick can afford health services that they need.
  • Costs of health services that a health plan does not cover don’t count against an out-of pocket cap. This is another reason that all health plans should be required to provide at least a basic, comprehensive package of essential benefits.
Report

Obscure Tax Provision of Federal Recovery Package Could Widen State Budget Gaps

Key Findings

  • A federal tax break in the federal recovery package could cost states up to $5.5 billion in revenue over the 2009-2011 period unless they “decouple” their tax codes from the provision.
  • The provision allows businesses that buy back their debt at a discount to wait four years before beginning to pay taxes on the income the discount represents.
  • Forty-three states could lose revenue from the provision because their tax laws are linked to the federal code. (Florida, Maryland and Minnesota have already decoupled.)
  • In other similar situations, states have used decoupling to protect their revenues from changes in federal tax laws.
  • States that fail to decouple could lose substantial amounts of revenue to provide tax savings to multistate corporations that have few facilities or employees in the state. There is no economic justification for conforming to the provision. If anything, doing so will hurt the state economy.
Report

Podcast: The 2009 Social Security and Medicare Trustees' Reports

The Social Security and Medicare Trustees' report on Medicare underscores the urgency of health care reforms to slow health care cost growth, starting with President Obama’s proposed Medicare reforms.  The Trustees’ report shows Social Security doesn’t face an immediate crisis but does require changes, and the sooner they’re made, the better.

Duration 14:58

Report

Minority of States Still Granting Net Operating Loss “Carryback” Deductions Should Eliminate Them Now

Key Findings

  • Nineteen states could avoid unnecessarily com-pounding their fiscal problems during the current economic downturn by repealing deductions from their personal and/or corporate income taxes for “net operating loss carrybacks.” The states are:
Alaska Mississippi
Delaware Missouri
Georgia Montana
Hawaii New York
Idaho Ohio
Indiana Oklahoma
Iowa Utah
Louisiana Virginia
Maryland West Virginia
Michigan  
  • These states allow businesses to use current losses to offset past profits and receive refunds of prior-year taxes paid — at exactly the time that current-year tax collections are falling.
  • The majority of states don’t grant NOL carryback deductions.
  • All states already provide almost the same tax benefit to businesses by allowing them to use current losses to offset future profits — a policy that is not nearly as disruptive to state fiscal management.
  • 7 of these 19 states could be especially hard-hit if they don’t repeal their carrybacks because of direct links between their carryback laws and the federal tax code; legislation has been introduced to grant bigger NOL carrybacks to corporations.
Report

Podcast: Discussing the April Employment Report and What it Means for the Economy

"Today’s jobs report brings more sobering news about the depth and duration of the recession.  Even if the economy hits bottom soon and begins growing again, it will take time to reverse the severe job losses and sharp increase in unemployment that have already occurred.... [I]t is important that as many states as possible take advantage of the incentive funding to modernize their [unemployment insurance] programs."

Duration: 5:57

Report

Podcast: Where Do Our State Tax Dollars Go?

Given the budget problems states face due to the recession, policymakers will confront important choices about how to pay for important government services and programs. To inform this crucial decision making, it is useful to examine where state tax dollars go as well as changing trends over time.

Duration: 5:35

Report

Fact Sheet: How a “Climate Rebate” Would Work

Key Findings

  • “Climate rebates” can shield low- and middleincome consumers from the higher energyrelated prices they will face as a result of restrictions on greenhouse-gas emissions.
  • Three existing tax and benefit mechanisms would be used to deliver the rebate. (1) Lowand middle-income working families would be issued a rebate through a tax credit. (2) People receiving Social Security, SSI, or veterans’ benefits would receive their rebates directly from the agency administering those benefits. (3) Very low-income consumers could be issued climate rebates through states’ Electronic Benefit Transfer systems.
  • Together, these approaches could deliver climate rebates automatically to 95 percent of households in the bottom fifth of the income spectrum and 98 percent of households in the next two income quintiles, without new bureaucratic structures and with low administrative costs.