Tag: government

When the Government Makes Poverty Worse

Posted on by Lone Candle

“a survey of more than 1,000 low-income Pennsylvanians found that taxes are often a major barrier to economic security—ranking ahead of more commonly discussed problems such as credit card debt and student loans. Among those surveyed, all of whom have incomes below 200 percent of the federal poverty level (about $53,000 annually for a family of four), the average respondent reported paying $4,575 per year in taxes.”

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“The paper asks officials to consider a counterfactual history: If Pennsylvania had enacted a rule in 2003 that capped future government spending increases at a combination of inflation and population growth (and had returned the surplus to taxpayers), the average low-income resident of the state would have an extra $20,000 in the bank today, simply due to the lower tax burden.”

Bringing the Child Tax Credit Back to Life Is Too Costly

Posted on by Lone Candle

“At the end of 2021, not quite a year into Joe Biden’s presidency, something unusual happened: Congress actually allowed a massive government program to expire. That program was the expanded child tax credit, which had been enacted as a temporary program under the American Rescue Plan (ARP), a roughly $2 trillion spending package passed exclusively with Democratic votes in March 2021.
A year after the expansion expired, however, Democrats began looking for ways to bring it back. The cost of doing that would be very high.

The ARP raised the maximum child tax credit from $2,000 to $3,600 per child for families making up to $150,000 a year. The one-year program made the credit fully refundable, meaning that people would qualify for it even if they owed no income taxes. That change expanded the benefit to millions of households that previously had earned too little to qualify.

The ARP also turned what had been an annual lump sum around tax season into a monthly payment that in many cases was directly deposited into parents’ bank accounts. In effect, the law set up a program of monthly checks, sent directly to the bank accounts of most families.

Although the program was initially designed as a one-year expansion, supporters hoped it would become permanent. As The New York Times reported in January 2022, the benefit “was never intended to be temporary,” and “many progressives hoped that the payments, once started, would prove too popular to stop.”

Yet at the end of the program’s first year, after paying out about $80 billion, Congress declined to extend the program. Even with Democrats in control of both the House and the Senate, there simply weren’t enough votes to keep it going. Sen. Joe Manchin, the moderate Democratic senator from West Virginia, was vocally opposed, citing cost concerns and warning that the expanded eligibility would subsidize unemployment. Progressive ambitions were foiled”

The Government Is Subsidizing Microchip Firms—While Making It More Expensive To Produce Microchips

Posted on by Lone Candle

“subsidized firms must provide “high-quality childcare for plant workers.” They can even divert some of the subsidies to build child care centers and hire providers—activities that do little to increase the supply of microchips. Companies will also be required to do all sorts of financial disclosures and share part of any unanticipated profits with the government. Preference for funding will be given to companies that promise not to buy back stock. The New York Times cleverly named this approach the “Chips and Strings.”

These strings will significantly undermine chip manufacturing by increasing production costs. For instance, when the administration says high-quality child care, it really means more expensive child care because of requirements that caregivers be college-educated and such. Building those child care and chip factories will be subjected to Buy American and environmental requirements, Davis-Bacon pay requirements, and minority and women material sourcing requirements, along with pressure to be more open to the demands of labor unions.”

Government Spending Billions To Expand Broadband but Can’t Tell Who Needs It

Posted on by Lone Candle

“the government currently has no idea where broadband actually is and is not available.
The government defines broadband as any high-speed internet connection that is always on without needing to dial up.”

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“To determine what areas need investment, the government relies on maps from the Federal Communications Commission (FCC). But despite costing $350 million, the FCC’s maps are notoriously unreliable and have been for many years. In 2021, The Washington Post noted the maps are based on census data, so “if even one household in a census block—a statistical area that conveys population data—has broadband available, then the agency considers the entire group served. In rural areas, one block could cover dozens of square miles.” The FCC’s maps also don’t take into account physical impediments, like trees and mountains, which can disrupt wireless signals.

As Karl Bode noted this week at Techdirt, the FCC’s maps were so unreliable that multiple states took it upon themselves to draw up their own. Vermont determined that more than 18 percent of its residents lack broadband access, while the FCC’s newly redrawn maps put Vermont’s shortfall at only 3 percent.

Now, with more than $40 billion in state grants on the line, states are scrambling to challenge the new maps, which cost the FCC nearly $45 million in addition to the $350 million previously spent.”

Americans Oppose Big Government, Unless Their Party Is in Power

Posted on by Lone Candle

“”Republicans and Democrats are more inclined to say the government has too much power when the president is from the other party, and less inclined when a president from their own party is in the White House.” For more than a decade, Republicans have said that government has too much power, but the intensity of their feelings fluctuates depending on whether they hold the White House. Democrats also vary in their feelings, though they tend to believe the government is too powerful only when the presidency is held by Republicans. Majorities of independents have pretty consistently stuck to their guns in opposing an overpowerful state no matter which party has the edge.”

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“”Negative partisanship is the idea that people choose a party not necessarily based on the party’s platform or even the candidate. They do so out of animosity or dislike or disdain toward the opposing party,” Chris Weber, an associate professor in Arizona State University’s School of Government and Public Policy, commented in 2020. Weber points out that Americans haven’t really changed their feelings towards their own parties over the years, but their dislike of political opponents has intensified.
“Viewing half of the country or a large section of the country as antithetical to American democracy is actually really harmful,” he added. “It’s an outgrowth of political polarization that has potentially very serious consequences.””