Backing up Hassett’s assertions, former CEA chair Glenn Hubbard recently wrote in the Wall Street Journal that too many economists fail to consider the share of the U.S. corporate tax burden borne by labor -- 60 percent according to his research. Neither the TPC, the CBO, nor the JTC (Joint Tax Committee) model these results. Instead, they ignore the evidence.
A recent analysis of the House tax plan -- which is nearly identical to the Trump plan -- by professors Alan Auerbach (Berkeley) and Laurence Kotlikoff (Boston University) concluded that it would boost wages by 8 percent. That’s a big number.
It’s the difference between a prospering and optimistic middle class and a pessimistic middle class that lives day-to-day, paycheck-to-paycheck.
This Working Paper focuses on this challenge through multiple case studies, covering both state and local governments. The case studies demonstrate a marked increase in both employer pension contributions and unfunded pension liabilities over the past 15 years, and they reveal that in almost all cases that costs will continue to increase at least through 2030, even under the assumptions used by the plans’ governing bodies—assumptions that critics regard as optimistic. It examines the impacts of increased pension contributions on other expenditures, including services traditionally considered part of government’s core mission. Pension costs have crowded out and will likely to continue to crowd out resources needed for public assistance, welfare, recreation and libraries, health, public works, other social services, and in some cases, public safety.
California governments likely will make do with fewer teachers, parks employees and other public workers while they struggle to absorb fast-rising pension costs in the next few years, a former state lawmaker argues in a study released this week through Stanford University.
Former Democratic Assemblyman Joe Nation projects that many cities, counties and school districts will double their spending on pensions by 2030, “crowding out” their ability to fund public services.
The trend is an acceleration of the swelling pension costs that most California governments have recorded since the dot-com crash in the early 2000s, when pension plans that had been over-funded suddenly had to catch up with investment losses.
“As painful and as steep as these increases have been since 2003, my best estimate is that we are only about half way through these increases,” said Nation, who is now a researcher at the Stanford Institute for Economic Policy Research. “If you’re a public agency and you went from paying $1 million a year to $10 million a year, that’s an enormous increase. You’re likely to go from $10 million to $20 million by the year 2030.”
The Supreme Court said Thursday it would consider whether public employees can be required to pay union dues, revisiting an issue that deadlocked the court after Justice Antonin Scalia’s death last year.
Under a 1977 Supreme Court precedent, states may authorize contracts between public agencies and their employee unions that require represented workers to pay dues, or an equivalent fee, for collective bargaining costs.
California schools are on the hook for $24 billion in future health care costs for their retirees, a mountain of debt that's forcing some districts to curb benefits or spend less on teacher salaries and classroom equipment, according to a new state report. Los Angeles Unified School District boasts a whopping 56 percent share — or $13.5 billion — of the unfunded liability, although it educates nine percent of California's public school population. It's historically provided some of the most generous retiree health benefits, including lifetime coverage for retirees and their spouses. Teachers' union representatives argued good health care is an essential tool for recruiting and retaining teachers. But the looming debt means newer teachers are offered skimpier benefits and less money is available to spend in classrooms.