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How Much Do Taxes Affect Startup Investment Incentives?
Commentary from Donald Marron, Joseph Rosenberg     Posted: March 09, 2015

In a contribution to the Policy Dialogue on Entrepreneurship blog of Kauffman.org. Joseph Rosenberg and Donald Marron examine how tax policy affects investment incentives for startup companies. Startups often make losses, and thus cannot make immediate use of the R&D tax credit, accelerated depreciation, and other tax benefits. The value of those benefits declines the longer startups have to wait to use them. This puts startups and fast-growing young firms at a disadvantage relative to established companies.

Gregory B. MillsUnderstanding the Rates, Causes, and Costs of Churning in the Supplemental Nutrition Assistance Program (SNAP)
Testimony from Gregory B. Mills     Posted: February 26, 2015

In this testimony before the U.S. House of Representatives Committee on Agriculture’s Subcommittee on Nutrition, Greg Mills presents research findings on participant churning in the Supplemental Nutrition Assistance Program (SNAP) including the rates, causes and costs of participant churn in SNAP, which occurs when households receiving SNAP exit the program and then re-enter within several months. Findings include that churn rates across the six states that were studied range from 17 to 28 percent for FY 2011 and that the causes of churn are due primarily to procedural difficulties experienced by participants rather than fluctuations in the earnings of SNAP recipients.

Assessing the Proposed Housing Goals
Commentary from Jim Parrott, Laurie Goodman, Wei Li, Ellen Seidman, Jun Zhu     Posted: October 20, 2014

By establishing annual housing goals for mortgages purchased by Fannie Mae or Freddie Mac, the Federal Housing Finance Agency (FHFA) seeks to encourage lending to creditworthy borrowers with low incomes and those in traditionally underserved communities. Setting these goals requires FHFA to walk a fine line to meaningfully expand lending to all qualified applicants without encouraging lending to borrowers who cannot sustain mortgage payments. This commentary critiques the goals proposed by FHFA for 2015 - 2017, examining three central issues: How do the goals interact with other policy issues; Should the FHFA apply both benchmark (prospective) and market (retrospective) goals; and Did the FHFA set its benchmark goals appropriately?

Charting the Course to a Single Security
Commentary from Laurie Goodman, Lewis Ranieri     Posted: September 03, 2014

The Federal Housing Finance Agency has proposed a thoughtful path to creating a single security for Fannie Mae and Freddie Mac, using the Common Securitization infrastructure, in its August Request for Input. While the proposal would benefit from a more definitive time frame, its many strong provisions make it likely to succeed and benefit taxpayers, borrowers and lenders. A key strength of the proposal is the structural provisions – which ensure that the securities backed by both entities will trade equivalently, ending the costly subsidies Freddie has been forced to pay to stay competitive. Ultimately, moving toward this single security should make the market more responsive to borrower and lender needs, boost competition, increase the availability of mortgage credit and potentially help pave the way for GSE reform.

Jun  ZhuHARP Significantly Reduced Mortgage Default Rates
Commentary from Jun Zhu     Posted: September 03, 2014

This commentary discusses the impact of the federal government's Home Affordable Refinance Program (HARP) on mortgage loan default rates between April 2009 and November 2011. We analyze a unique borrower-level data set from Freddie Mac and conclude that HARP more than halved the default rate, a material and significant improvement.

Laurie  GoodmanA Realistic Assessment of Housing Finance Reform
Commentary from Laurie Goodman     Posted: August 01, 2014

In August 2008, the GSEs went into conservatorship, and the clear intent was that they were never going to re-emerge; a new system, with a larger role for private capital providers was to take its place. Nearly six years later, GSE reform remains a dream: the government essentially guarantees 80% of new mortgage debt, and credit availability is limited. In this paper, we take a look at the current system, evaluate the proposals for GSE reform, and offer some thoughts on what is being done and what more can be done without a legislative solution.

Guarantee Fees - An Art, Not a Science
Commentary from Laurie Goodman, Jim Parrott, Ellen Seidman, Jun Zhu     Posted: August 14, 2014

This commentary examines the potential impact of increasing the guarantee fees that Fannie Mae and Freddie Mac charge lenders. We identify the three most important assumptions made in determining the fees, conclude that transparency regarding these assumptions is critical, and that, under any reasonable set of assumptions, the fees should not be increased for the least risky loans. We also conclude that the GSEs' mission should be taken into account in determining the appropriate capital requirement.

Nonbank Specialty Servicers: What's the Big Deal?
Commentary from Pamela Lee     Posted: August 04, 2014

Following the crisis, nonbank specialty servicers rapidly expanded their portfolios of distressed loans. This has contributed to a significant market change: in 2011, the 10 largest mortgage servicers were all banks; by 2013, only five of the top 10 were banks, and the other five were nonbank servicers. The rapid growth and lack of a federal regulator have contributed to significant, heated regulatory scrutiny. This commentary discusses major concerns raised about the largest nonbank servicers, focusing on the three fastest-growing large nonbank servicers. We explore the regulatory and market framework driving their striking growth, then address the major charges against them, in an effort to elevate the debate and inform sound policy.

C. Eugene SteuerleWhat Every Worker Needs to Know About an Unreformed Social Security System
Testimony from C. Eugene Steuerle     Posted: July 29, 2014

In this testimony before the House Ways and Means Committee Subcommittee on Social Security, Eugene Steuerle, Institute Fellow and Richard B. Fisher Chair at the Urban Institute discusses the fairness, efficiency and adequacy questions that arise almost no matter how much growth Congress maintains in Social Security. In particular he addresses three troubling aspects of an otherwise successful program: unequal justice; middle age retirement; and impact on the young.

Eric ToderHow To Stop Corporations From Fleeing U.S. Tax Laws
Commentary from Eric Toder     Posted: July 28, 2014

In a contribution to The Wall Street Journal's MarketWatch, Eric Toder explains why corporations expatriate from the United States and argues that they will continue to do so until Congress addresses the fundamental flaws in the corporate income tax. He then provides some possible solutions to end the erosion of the U.S. corporate tax base.