The War on Poverty Moves to the Tax Code (Article/Tax Facts)
In 1975, the federal income tax code joined the "War on Poverty" with the enactment of the earned income tax credit (EITC). Today, tax credits form some of the largest and most effective anti-poverty programs in the US. In 2012, the Census Bureau estimated that tax credits cut poverty (under a broad measure that includes the effect of programs like Supplemental Nutrition Assistance Program benefits and the EITC) by 3 percentage points – more than SNAP (1.6 points) and TANF (0.2 points). The tax credits cut child poverty by a whopping 6.7 percentage points.
New Perspectives on Homeownership Tax Incentives (Research Report)
|Posted to Web: January 07, 2014||Publication Date: January 06, 2014|
This report presents three tax reforms designed to promote homeownership through a channel other than the deductibility of mortgage interest. These reforms include a first-time homebuyer tax credit, a refundable tax credit for property taxes paid, and an annual flat amount tax credit for homeowners—all paid for by limiting current tax expenditures for housing. Although far from perfect, these reforms would provide a more efficient and equitable allocation of housing subsidies. Our simulations show that relative to existing incentives, each policy would raise home prices and make the tax code more progressive.
Closing the Wealth Gap: Empowering Minority-Owned Businesses to Reach Their Full Potential for Growth and Job Creation (Testimony)
|Posted to Web: January 06, 2014||Publication Date: January 06, 2014|
The racial wealth gap grows sharply with age. When people are in their 30s and 40s, whites have about 3.5 times more wealth than people of color. By the time people reach their 60s whites have about 7 times more wealth. Skewed federal subsidies exacerbate wealth disparities and the racial wealth gap. Five suggestions to close the racial wealth gap are: make homeownership tax subsidies more progressive; promote retirement savings through IRAs and expand the Saver's Credit; reauthorize the Assets for Independence program; increase access to high-quality education; and improve access to micro and small business capital for low-wealth groups.
Validating Longitudinal Earnings in Dynamic Microsimulation Models: The Role of Outliers (Research Report)
|Posted to Web: November 26, 2013||Publication Date: September 18, 2013|
Rapid growth in the earnings of the highest earners over the past 25 years has contributed to strains on Social Security’s finances and made projecting lifetime earnings on a year-by-year basis-already a complicated technical problem-even more challenging. This project uses descriptive techniques and high-quality administrative data matched to household surveys to explore questions about the changing earnings distribution. We describe high earners' characteristics, both at a point in time and over longer periods (from 1983 through 2010). We then evaluate how well SSA's MINT7 model projects inequality in the earnings distribution and the long-term characteristics of earnings paths.
Social Security and Medicare Taxes and Benefits over a Lifetime: 2013 Update (Fact Sheet / Data at a Glance)
|Posted to Web: November 15, 2013||Publication Date: November 08, 2013|
These tables update to 2013 previous estimates of the lifetime value of Social Security and Medicare benefits and taxes for typical workers in different generations at various earning levels based on new estimates of the Social Security Actuary. The "lifetime value of taxes" is based upon the value of accumulated taxes, as if those taxes were put into an account that earned a 2 percent real rate of return (that is, 2 percent plus inflation). The "lifetime value of benefits" represents the amount needed in an account (also earning a 2 percent real interest rate) to pay for those benefits. All amounts are presented in constant 2013 dollars.
Has Social Security Redistributed to Whites from People of Color? (Research Report)
|Posted to Web: November 12, 2013||Publication Date: November 12, 2013|
This brief considers how Social Security’s many benefit and tax features have redistributed across groups over time. Using Current Population Survey data from 1970 through 1994 and microsimulation projections from the Urban Institute’s DYNASIM3 model, we find that for many decades, Social Security redistributed from blacks, Hispanics, and other people of color, to whites. These transfers will likely to continue in future decades. Our findings suggest that future reforms that place the burden of Social Security reform solely on younger, more diverse generations may have undesired distributional consequences if the aim of the program is to provide greater relative protections to more vulnerable groups.
Housing Finance at a Glance: A Monthly Chartbook: October Edition (Research Report)
|Posted to Web: November 07, 2013||Publication Date: November 06, 2013|
At A Glance is the signature monthly publication of the Housing Finance Policy Center. It is designed as a single reference for mortgage market data, through a public policy lens. Drawing from a range of sources that are often difficult to access and interpret, At A Glance contains key measures of housing affordability, credit availability, and other topics related to the government role in the mortgage market. The authors compile and illustrate this critical information in a comprehensive and easily digestible format so that stakeholders across the housing finance sphere—government, advocacy, academia, and private markets—can contribute to data-driven policy debates. Highlights of the October issue include the GSE portfolio wind-down, tapering HAMP and HARP activity, and housing affordability by MSA.
Asset Poverty and the Importance of Emergency Savings (Slideshows)
|Posted to Web: October 24, 2013||Publication Date: October 24, 2013|
What percent of families are asset poor-lack sufficient resources to live at the poverty line for three months -and why does asset poverty matter? A third of U.S. families are liquid asset poor and these families are disproportionately minority, young, and low-income. A lack of assets threatens families' ability to weather adverse events. After experiencing an involuntary job loss, asset-poor families are nearly three times more likely to experience hardship than non-asset-poor families. These large differences exist across the income spectrum-for low-, middle-, and
Poverty in the United States (Research Report)
|Posted to Web: October 01, 2013||Publication Date: October 01, 2013|
Poverty rates were largely unchanged in 2012, remaining at high levels since the Great Recession, though unemployment rates have fallen. Child poverty rates have remained high, and racial and ethnic gaps and differences by family structure remain large.
Prohibitions, Price Caps, and Disclosures: A Look at State Policies and Alternative Financial Product Use (Research Report)
|Posted to Web: September 17, 2013||Publication Date: September 17, 2013|
This study uses nationally representative data from the 2009 National Financial Capability State-by-State Survey to examine the relationship between state-level alternative financial service (AFS) policies (prohibitions, price caps, disclosures) and consumer use of five AFS products: payday loans, auto title loans, pawn broker loans, refund anticipation loans, and rent-to-own transactions. The results suggest that more stringent price caps and prohibitions are associated with lower product use and do not support the hypothesis that prohibitions and price caps on one AFS product lead consumers to use other AFS products.
|Posted to Web: August 30, 2013||Publication Date: August 30, 2013|