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Fiscal Policy

Tax Day 2012: Two Views

  • By
  • Reid Cramer,
  • New America Foundation
April 17, 2012 |

For over 26 million American households, tax day is a relief. Thanks to the Earned Income Tax Credit (EITC), filing taxes triggers a refund that may be the largest lump sum of cash these families receive all year. Unfortunately, for many other families, it’s just another day. One in four who qualify for the EITC don’t file, and they don’t benefit from what’s really the country’s largest anti-poverty policy effort—currently at over $55 billion. For those with low-incomes and few resources, their tax refund is a welcomed infusion of cash that can be used to manage their poor finances.

US Must Address Its Balance Sheet

  • By
  • Marc Goldwein,
  • Jason Peuquet,
  • New America Foundation
April 17, 2012 |

It is fitting, and perhaps ironic, that today is both Tax Day and Financial Literacy Day. Taxes and finances are intimately intertwined, and as the U.S. budget crisis underscores, that relationship is not always a positive one. Today, as our elected leaders ask households around the country to take a look at their own balance sheets, they might be wise to do the same. What they will find isn’t pretty — a ledger filled with a mountain of debt and no real long-term plan to bring spending and revenues more closely in line.

A Federal Budget that Puts Higher Education within Reach: the ASPIRE Act and Inclusive 529s

April 17, 2012
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Going to college and getting an education has long been regarded as a reliable path out of poverty. And for good reason. Research by the Pew Economic Mobility Project shows that children in the bottom income quintile have a forty-five percent chance of remaining in the bottom quintile if they only have a high school education; those who get a college degree only have a sixteen percent chance. Likewise, the average college graduate makes $29,000 more per year than someone with only a high school diploma.

Yet when a college education isn’t even an option because of its excessive cost—as is increasingly the case for many U.S. families—this narrative falls apart. Today, the average American household must devote a significant portion of their annual income to tuition in order to make attending college a reality. Although in the long run the educational system needs greater structural changes, two policy reforms that would facilitate saving for college from a young age—the ASPIRE Act and improved 529 accounts—would allow a greater number of low-income students to access higher education.

What My Television Says About Our Broken Tax Code

  • By
  • Rachel Black,
  • New America Foundation
April 16, 2012 |

My television is 100-pound behemoth from an era when Seinfeld was still must-see TV. So, when a couple of friends offered to sell my husband and me their "old" set a month ago—a svelte 32'' flat screen I could have carried home without getting winded—we jumped at the chance.

We immediately boasted about our purchase to my in-laws. My former banker father-in-law reminded me that, as a bonus, we could deduct the cost of the ancient set from our taxes after we donated it.

The Saver’s Bonus and Removal of Asset Tests: Making Federal Spending Work Better for Low-Income Families

April 16, 2012
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In many ways, the asset poverty line is a better and more complete indicator of how a particular family is faring financially than the traditional poverty measurement. Asset poverty acknowledges that income only goes so far; even earning a wage sufficient to meet basic expenses, a household without any savings is always one emergency away from disaster. Unfortunately, while some segments of the U.S. population are strongly encouraged to save, others, such as most recipients of public benefits, are effectively banned from saving due to restrictive asset tests. Additionally, lower-income households have inadequate access to products and incentives that facilitate saving. Two policy interventions that could significantly increase the abilities of lower-income families to save include the elimination of asset tests in public assistance programs, and the implementation of the Saver’s Bonus.

The Sidebar: Inequality in the Tax Code & Campaign Updates

April 13, 2012
Inequality in the tax code and updates from the Presidential campaigns are topics for this week's episode of The Sidebar. Host Pamela Chan is joined by Rachel Black and Franklin Foer.

The Relationship Among Homeownership, the Federal Budget, and the Racial Wealth Gap

April 12, 2012
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The Asset Building Program’s analysis of the President’s FY 2013 budget reveals two key trends about the accessibility of homeownership and its relationship to overall wealth over the past few years. First, the benefits of the2013 federal budget’s investment in homeownership, which are delivered primarily through tax deductions, accrue chiefly to those who already have high incomes and substantial assets. Second, the housing crisis disproportionately affected black and Hispanic families, significantly widening the racial wealth gap and creating further barriers to savings and economic mobility.

Introducing The Assets Report 2012 and Infographic!

April 10, 2012
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Every year, the Asset Building Program analyzes the President's budget request to see how much goes to support asset building policies. More importantly, we keep tabs on how this money is spent because this is the key to understanding who the spending is benefiting.

Paul Ryan’s Risky Ideas

  • By
  • Fred Kaplan,
  • New America Foundation
April 5, 2012 |

Few things shock anymore, but it came as a bit of a surprise last week when Rep. Paul Ryan, chairman of the House Budget Committee, revealed how little he knows about the making of the budget.

The moment occurred on March 29, when Ryan told a National Journal forum in Washington, “We don’t believe the generals are giving us their true budget.”

The Sidebar: The U.S. Budget and Community WiFi

April 6, 2012
The U.S. Budget and Community WiFi are topics for discussion this week, as host Pamela Chan is joined by Preston Rhea and Jason Peuquet.
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