2015 Poverty Measures Released: Antipoverty Relief Delivered through the IRC = EITC & CTC

By:  Francine J. Lipman

“Few topics in American society have more myths and stereotypes surrounding them than poverty, misconceptions that distort both our politics and our domestic policymaking.” Mark R. Rank

The U.S. Census Bureau of the Department of Commerce: Economics and Statistics Administration has released the 2015 poverty measures and the news is eye-poppingly good. The Supplemental Poverty Measure (SPM), the most comprehensive poverty measure, dropped one percent from 2014. Down from 15.3% to 14.3% — nevertheless more than  Continue reading “2015 Poverty Measures Released: Antipoverty Relief Delivered through the IRC = EITC & CTC”

IRS Announces More 2016 LITC Grants

By:  Francine Lipman

There has not been a great deal of good news lately about underserved communities or the IRS. But today America received some great news about nine new Low-Income Taxpayer Clinics (LITCs) in underserved areas across America. Five of the nine are in law schools. Continue reading “IRS Announces More 2016 LITC Grants”

Tax Times @ ABA Section of Taxation

By Francine J. Lipmanth

Supervising Editor Professor of Law Linda Beale and her team of outstanding ABA – Tax Section editors, Anne Dunn and Isel Pizarro, and staff have put together an exceptional June 2016 issue of the digital Tax Times. Features include . . . Continue reading “Tax Times @ ABA Section of Taxation”

Universal Basic Income “Arithmetic”

Benjamin M. Leff

Last week, Eduardo Porter wrote a column pointing out that there is some interest currently – both internationally and in the United States – in a “universal basic income” (or “UBI”).  Under a UBI, the government provides each citizen with an annual cash payout of a certain amount.  The idea appeals to thinkers on both the left and the right, for slightly different reasons.  Porter argues that it’s a bad idea for a number of reasons, but he argues that “the first hurdle is arithmetic.”  He then goes on to argue that the cost to provide a universal basic income of $10,000 each for 300 million American citizens would be $3 trillion (pretty simple math so far), and that is “nearly all the tax revenue collected by the federal government.”  So, obviously, a nonstarter.

Daniel Hemel, a brand new assistant professor over at University of Chicago blogging at Whatever Source Derived, does a little “back-of-the envelope calculation,” in which he points out how silly Porter’s arithmetic is.  It’s ridiculous to think of instituting a universal basic income without simultaneously changing the tax code.  If the tax code stayed exactly the same, then a universal basic income would either be a tremendously expensive social program or a tremendous tax cut for everyone, depending on how you want to look at it.  But Hemel points out that we wouldn’t keep the tax code exactly the same if we instituted a universal basic income.  Instead, we could probably cut the personal exemption and the standard deduction.  Who needs a zero tax rate if the first $10,000 you earn is a gift straight from the government?  You also don’t need the earned income tax credit or child tax credit, since the universal basic income is basically a refundable credit available to everyone.  Then, Hemel suggests cutting a bunch of other deductions to pay for the UBI, like the deduction for state and local taxes, the mortgage interest deduction, and some others, and he produces $1.119 trillion dollars of savings, which would fund a UBI of $3,450 per person.  Not the $10,000 per person that would completely eliminate poverty for any family with children and almost completely eliminate poverty overall, but not a bad start.

But Hemel hasn’t gone far enough either, because he hasn’t considered a complete overhaul of the income tax.  Continue reading “Universal Basic Income “Arithmetic””

Oklahoma Decreases Working Poor Family Benefits

By Francine J. Lipman
OklahomaLRGThis Sunday New York Times editorial caught my eye (and heart) this morning, because I have been researching and writing about state EITCs and lobbying legislators to consider enacting or increasing this demonstrably effective work incentive and antipoverty tool. When I first looked into the issue I was pleasantly surprised to discover that twenty-six states and the District of Columbia have EITCs that build on the antipoverty success of the federal EITC. Continue reading “Oklahoma Decreases Working Poor Family Benefits”