Over at ThinkProgress, I highlight concerning economic news buried in the Congressional Budget Office’s latest update to their budget and economic outlook:
The CBO now estimates that the economy will grow even slower than it expected in its previous economic outlook. Not only that, it now expects that wages and salaries will comprise a smaller portion of that reduced economic pie. The report suggests that troubling long-term trends in our economy are getting worse. Middle-class wages have been stagnant for over a decade. Steven Greenhouse notes in the New York Times that “overall employee compensation — including health and retirement benefits — has also slipped badly, falling to its lowest share of national income in more than 50 years while corporate profits have climbed to their highest share over that time.”
At the same time, the CBO increased its estimate for corporate profits. Workers’ low wages are good news for corporations: the CBO explains that “lower labor costs are expected to reduce businesses’ expenses,” which means higher profits.
Read the full post here.
There are tax breaks, and there are tax breaks. It’s one thing to get an income tax cut – there are lots of ways to do that. Getting a payroll tax cut is a bit more special, and there are only a handful of tax breaks that are up to that task. Continue reading
The House celebrated tax day last month by considering the Federal Employee Tax Accountability Act, which cracks down on federal employees who aren’t paying their taxes. Basically, if the IRS files a public lien on a federal employee for a tax debt, they would be fired, and people with tax liens would be ineligible for federal employment. When our country is running large budget deficits, going after people who aren’t paying taxes to support the government they work for seems like a no-brainer.
Except it turns out the Federal Employee Tax Accountability Act “would have a negligible effect on revenues,” according to the nonpartisan Congressional Budget Office. That’s probably because if the IRS has a lien on someone, they’ve already discovered the tax delinquency and are aggressively collecting on it. Also, if someone owes money, it helps if they have a way to pay. Like their job. It’s a shame we fired them.
The CBO did make clear that the law would have some effect on the federal budget. It would cost $1 million in 2014 for agencies to implement the new rules. That’s not a lot of money in the context of the federal budget, but it’s probably more than the government should be spending to needlessly antagonize their workforce.
Ezra Klein is a big fan of this explanation of the budget debate from CBO Director Doug Elmendorf:
I agree that it’s a solid summary of some of the key elements of each budget, but my earlier post on the budget process suggests that Elmendorf’s focus misses the most important part of the budget debate.