Congress Should Promptly Enact Legislation to Help Close Tax-Driven Corporate “Inversions” Loophole

May 21, 2014 at 2:30 pm

U.S. drug giant Pfizer’s recent effort to merge with much smaller United Kingdom-based AstraZeneca, and then convert itself into a “U.K. company” and avoid U.S. corporate taxes — even though its U.S. shareholders would continue to own a majority in the merged company — highlighted a gaping hole in current corporate tax law.  With that in mind, Senator Carl Levin (D-MI) and 13 Senate co-sponsors, and Representative Sander Levin (D-MI) and nine House co-sponsors, introduced companion bills yesterday to halt a possible renewed spate of such tax-driven corporate “inversions,” whereby corporations shift their headquarters overseas to avoid paying U.S.… Read more

House’s Skewed Funding Choices Amidst Non-Defense Funding Squeeze

May 21, 2014 at 12:31 pm

The House Appropriations Committee’s recent decisions on how to divide up the available money for non-defense discretionary programs for next year represent a poor allocation of insufficient resources, our new analysis explains.  Here’s the opening:

The House Appropriations Committee recently adopted its fiscal year 2015 funding allocations for its 12 subcommittees.  The allocations are consistent with the defense and non-defense discretionary funding caps set in last year’s agreement between Senate Budget Committee Chair Patty Murray and House Budget Committee Chair Paul Ryan.  Despite that agreement’s partial relief from the sequestration budget cuts, the overall funding level is much tighter than many observers appreciate.  Further, the House allocations to meet the tight non-defense cap reflect skewed policy choices, likely imposing deeper cuts on programs serving low-income populations and certain other priority programs than on other areas.  These choices are particularly inappropriate in a period of rising inequality.

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Will Congress Undercut Progress Against Childhood Obesity?

May 20, 2014 at 3:13 pm

Senior Policy Analyst Zoë Neuberger’s new commentary explains why a lobbying campaign to reverse recent reforms in the school meals, school snacks, and WIC programs threatens to set back efforts to reduce childhood obesity.  Here’s the opening:

With congressional committees expected this week to approve the annual Agriculture Department funding bill, which covers the child nutrition programs, industry lobbyists are promoting measures that would undercut reforms designed to improve children’s nutrition and combat childhood obesity.

Child obesity has more than doubled in the past 30 years and poses a serious health threat.  

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Community Eligibility: An Important New Tool to Reduce Childhood Hunger

May 20, 2014 at 1:18 pm

In a blog post on TalkPoverty.org, CBPP President Robert Greenstein explains that community eligibility, through which schools in high-poverty areas can provide students with free meals, is an important new tool that schools can use to reduce childhood hunger.

The option has been phasing in since 2011, and now, for the first time, will become available nationwide for the 2014-2015 school year.  The lists of eligible schools in all states are available here.  But schools have only until June 30 to opt in, so school districts need to move quickly to embrace this opportunity.

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One Easy Improvement to Senate “Tax Extenders” Bill: Don’t Outsource the IRS

May 20, 2014 at 10:15 am

A bill to extend various temporary corporate tax breaks (“tax extenders”), which failed to advance in the Senate last week, will likely reemerge in coming weeks.  While it suffers from several flaws, one is easy — and important — to correct.  The bill would outsource to private debt collectors the job of collecting back taxes from taxpayers whom the IRS has been unable to locate.  Senator Ben Cardin (D-MD) has filed an amendment to strike this unwise provision.

The IRS has already tried this outsourcing policy and it failed — actually losing money for the government, according to IRS Commissioner John Koskinen. … Read more

Where We Agree, Disagree with the Tax Foundation on Taxes and Migration

May 19, 2014 at 3:43 pm

The Tax Foundation has responded to our recent paper showing that interstate differences in taxes (especially income taxes) have only a negligible impact on peoples’ decisions about whether and where to move.  On the core question that a number of states experiencing net out-migration are debating — whether cutting their income taxes would stem this trend — the Tax Foundation seems to agree with us: “Mazerov has a point in critiquing the simplistic argument that high-earners are running from state-to-state in pursuit of slightly lower taxes.”

Yet, while largely conceding our major point — that very few people move to reduce their taxes — the Tax Foundation (like the American Legislative Exchange Council, or ALEC) argues that taxes have a significant indirect effect on migration because lower taxes strengthen state economies, thereby attracting workers.… Read more

In Case You Missed It…

May 16, 2014 at 12:54 pm

This week on Off the Charts, we focused on nutrition programs, health care, state budgets and taxes, and income inequality.

  • On nutrition programs, Zoë Neuberger explained why nutrition experts, not lobbyists, should decide which foods the WIC program provides; countered the potato industry’s misleading claims regarding farmers’ markets; and pointed to editorials supporting a science-based approached to the WIC foods issue.  Neuberger also highlighted our paper on the new “community eligibility” option, which can eliminate hunger in more than 25,000 schools.  
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The Week Misuses CBPP Analysis of Health Reform’s Employer Requirement

May 16, 2014 at 11:38 am

A recent column in The Week incorrectly used a 2009 CBPP paper about health reform’s employer responsibility requirement, under which large employers must offer their workers health coverage or pay a penalty.  As we’ve explained, that paper described an early version of the so-called “employer mandate” that’s very different from the one enacted in 2010.  In fact, Congress overhauled the provision specifically to deal with the criticisms we raised, so our paper doesn’t apply to the enacted version.  For details, see here.… Read more

Why Schools Are Adopting Community Eligibility

May 16, 2014 at 11:07 am

Participating schools report that community eligibility, which enables schools in high-poverty areas to serve meals to all students at no charge, improves children’s access to healthy meals, cuts paperwork for parents and schools, and makes school meal programs more efficient.  Previously available in 11 states, the option will be open to more than 25,000 high-poverty schools and more than 2,800 school districts in all states starting this fall.  Below are a few recent statements by school officials — the first two from districts that have already implemented community eligibility, the rest from newly eligible schools that will implement it this fall — on the new option’s benefits.… Read more

ALEC Critique Misses the Mark

May 16, 2014 at 9:30 am

The American Legislative Exchange Council (ALEC) has now responded to our recent paper on interstate migration, in which we found that interstate differences in tax levels have a negligible impact on whether Americans move from one state to another and where they go.

ALEC didn’t much contest that conclusion.  Instead, its main criticism is that we did not acknowledge that low-tax states, because they are low-tax states, have stronger economies that create more jobs, thereby indirectly attracting more migrants from (allegedly) poorly performing states with income taxes.  … Read more

White Potatoes, WIC, and Farmers’ Markets: Just the Facts

May 15, 2014 at 12:15 pm

As potato industry lobbyists push Congress to override a well-established, science-based rule by dictating that WIC offer white potatoes, they claim that WIC participants can purchase white potatoes at farmers’ markets but not grocery stores.  This claim is extremely misleading.

The vouchers for fruit and vegetables that WIC participants receive each month cannot be used to purchase white potatoes at grocery stores or farmers’ markets.  Some WIC participants can, however, buy white potatoes using coupons they receive once a year through the very small, separate Farmers’ Market Nutrition Program (FMNP).… Read more

Community Eligibility: A Path to Eliminating Hunger in Over 25,000 Schools

May 14, 2014 at 10:29 am

Community eligibility, a provision of the Healthy, Hunger-Free Kids Act of 2010, will allow more than 25,000 schools in high-poverty neighborhoods to offer nutritious meals to all students at no charge next year, as we explain in a new paper.

School districts can offer community eligibility district-wide or in selected schools within a district if more than 40 percent of their students are approved for free meals without an application based on data from other programs, like the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program), that serve low-income children.… Read more