Fiscal Policy

“Do not pass go, do not collect $200,” the harsh cliché made ubiquitous by Monopoly, is essentially what the Internal Revenue Service told a group of universities recently. A special report from the IRS found several institutions had inflated their Baltic Avenue social statuses to Boardwalk for the purpose of setting executive compensation. Roughly 20 percent of the private, nonprofit subset of colleges and universities that were selected for inclusion in the report have been told they are not in compliance with statutes governing executive pay in charitable organizations. One result is that “the IRS plans to […] ensure, through education and examinations, that tax-exempt organizations are aware of the importance of using appropriate comparability data when setting compensation.” This statement constitutes a clear shot across the bow of universities locked into the never-ending game of reputational enhancement—often sacrificing important work for visible work and attempting to become cool-by-association (e.g., rank, “tier,” membership in exclusive groups). The implications for proliferation of the IRS-approved measures of comparability extend well beyond executive pay, and the potential for new precedent in reducing competitive perversities among universities is enormous.

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include housing, unemployment, financial products, taxes, and inequality.

Fresh off the presses are two reports highlighting the dismal state of college affordability: the first was released Wednesday by the State Higher Education Executive Officer's Association showing that college costs rose 8.3 percent last year and the second from Sallie Mae released last Tuesday (slightly less fresh) showing that less families are savings for college and thos

The strategic landscape of the 21st century has finally come into focus. The great global project is no longer to stop communism, counter terrorists, or promote a superficial notion of freedom. Rather, the world must accommodate 3 billion additional middle-class aspirants in two short decades -- without provoking resource wars, insurgencies, and the devastation of our planet's ecosystem. For this we need a strategy.

If there is to be any durable hope for a social contract that transcends left-right partisanship, that contract must rest upon a majority consensus about policies that are efficient, fair, and sustainable. Once the smoke has cleared from this November’s battle over the role of government, what will endure are several policy prescriptions kept alive by an objective reading of economic history and a general consensus among economists.

The last thirty years of American history have witnessed, at least rhetorically, a battle over the size of government. Yet that is not what the history books will say the next thirty years of American politics were about. With the frontiers of the state roughly fixed, the issues that will dominate American politics going forward will concern the complexity of government, rather than its sheer size.

Tax reform is like the weather – everyone talks about it, but no one ever does anything about it. But unlike inclement weather, the problems of the tax system don’t go away; they continue to fester and compound. Today there are a number of unpleasant trends in the federal tax system that are crying out for attention:

For much of the last three decades, policy debates in the United States have been dominated by a quixotic concern about deficits, debt, and demographics. This concern has distracted policy from fundamental economic issues that have much more direct bearing on economic well-being, most notably the growth (and bursting) of the housing bubble in the last decade. While large deficits can have a negative impact on economic growth, this impact has been hugely misrepresented in public debates.