by Allan Sloan • The Washington Post
You can’t keep a bad idea down. That’s my reaction to a terrible proposal in President Obama’s budget — limiting how much money can be set aside on your behalf in 401(k)s, pensions and other tax-favored retirement accounts.
The idea, of course, is to limit retirement-related tax breaks for “the rich.” The Treasury wants to limit the value of pensions and retirement accounts to about $3.4 million for a married couple, and something less than that (it doesn’t say how much) for single people. Continue reading
By Michael Barone • RealClearPolitics
Last spring, you may remember, the French economist Thomas Piketty was all the rage in certain enlightened circles. His book “Capital” shot up to the No. 1 spot on bestseller lists, and many economists praised his statistics showing increased income and wealth inequality. Piketty argued that, absent a world war, returns to capital will exceed economic growth, inevitably producing growing inequality in the 21st century.
There are problems with Piketty’s — or anyone else’s — statistics. Reliance on U.S. income tax returns overlooks the fact that tax cuts encourage people to realize income and misses non-taxable income such as welfare and Social Security payments. Continue reading
Public policy intended to make layoffs less painful actually made layoffs cheaper and more common.
Why has the labor market contracted so much and why does it remain depressed? Major subsidies and regulations intended to help the poor and unemployed were changed in more than a dozen ways—and although these policies were advertised as employment-expanding, the fact is that they reduced incentives for people to work and for businesses to hire.
You probably heard about the emergency-assistance program for the long-term unemployed that ended only a few months ago after running for almost six years. But there is also the food-stamp program. It got a new name and replaced the stamps with debit cards. Participants are no longer required to seek work and are not asked to demonstrate that they have no wealth. Essentially, any unmarried person can get food stamps while out of work and can stay on the program indefinitely. Continue reading
There’s no doubt the Affordable Care Act will redistribute wealth in America. People at the top of the income ladder will pay more; people at the bottom will benefit. But how, exactly, will that work?
A new study finds that Obamacare’s redistribution will be stunningly lopsided. Scholars at the liberal Brookings Institution have discovered that Obamacare will increase the income of Americans in the lowest 20 percent of the income scale, and especially in the lowest ten percent. But all other income groups — even people who make very modest incomes in the $25,000 to $30,000 range, as well as all income brackets above that — will experience a decline in income because of Obamacare.
In other words, Obamacare is going to cost some of the very people it was designed to help. Continue reading
If President Obama is to be believed – and few conditional clauses give us more pause – the greatest economic challenge facing the nation is income inequality. He referred to it this month as “the defining challenge of our time,” the sort of superlative that always makes us suspect that a politician is up to something.
In this case, the strategy seems to be attempting to distract the nation from two undeniable realities that have much more plausible claims as “defining challenges”: an economy that has been lethargic for half a decade and a health care overhaul that may yet go down as the single-most conspicuous failure of big government in American history. Continue reading