Max Sawicky takes on this comment from Michael Lind: Why do right-wing Republicans, and conservative Southern Democrats like Lloyd Bentsen, love the EITC? Because it is a taxpayer subsidy to employers which enables them to pay below-poverty wages to their workers. In other words, the EITC is corporate welfare, a massive redistribution of wealth to […]

In thinking about the merits and faults of the VAT, I came across some interesting data. The first source is a paper by Timothy Smeeding entitled “Public Policy and Economic Inequality: The United States in Comparative Perspective“. Professor Smeeding used a unique data set from a project called the Luxembourg Income Study to gain various […]

Via Brad Setser comes a very nice summary of the competing views on the sustainability our massive trade deficit from Barry Eichengreen. While I’m not buying the “savvy investor” view of John Kitchen, his paper is worth the read. Kitchen notes the Dark Matter thesis and adds: Cline (2005, p. 262), one of the few […]

Imagine waking up in Chicago on some cold wintry morning, putting on your heavy overcoat – only to have someone tell you that the coat will not keep your any warmer. After all, who in Hawaii ever wears a heavy overcoat? Now, I know this tale sounds absolutely stupid but check out the latest from […]

In the new issue of The Economists’ Voice, Robert Shiller has a piece on house prices: “Long-Term Perspectives on the Current Boom in Home Prices.” Here’s the picture that tells a thousand words: Despite massive population growth over the periods shown in all three countries, there’s very little upward trend in home prices. Fluctuations in […]

The issue of immigration has been well-documented as exposing a rift among Republicans in recent days; articles in the Washington Post, The Economist, and the Financial Times are but a few examples. But the political left seems to me to be nearly as split on the issue. Numerous readers of this blog have expressed serious […]

The BEA released its final estimate of GDP growth and the national income account for 2005. The figures on GDP show no surprises. But the news release also highlights corporate profits in 2005. The figures show that 2005 was a good year to be an owner of a corporation: Profits from current production increased 16.4 […]

In my previous post, I suggest one possible rationale for levying a VAT: if you think that the US needs to raise more tax revenue, and if you think that political opposition to significant increases in income taxes is strong, then adding a new VAT on top of existing income taxes is one important option […]

Bruce Bartlett’s post on his NYTimes blog last week highlighted the long-term fiscal problems faced by the US. He mentioned that his preferred solution would be to impose a national value added tax (VAT) to help close the gap between expected federal revenues and spending. His most recent NYTimes post (see Mark Thoma for excerpts, […]

Some of you have wondered why I haven’t yet made much of an effort to distinguish between legal and illegal immigration. It’s a fair question. Let me share my thoughts with you about the two, and explain why my sentiments about immigration in general mean that I don’t worry much about the distinction between the […]