{"reports":[{"id":"19519421","slug":"basic-income","title":"Basic Income","publishedStatus":"featured","datePublished":"2021-02-10","_updatedAt":"2023-10-13T11:52:18-04:00","heroLede":"The persistence of poverty amidst our plenitude has vexed economists for centuries. Despite all our progress, the safety net in America leaves too many citizens in behind. Basic income offers a surprisingly simple solution. But would investing in basic income be more effective than other strategies?","heroImage":{"id":"47169827","url":"https://www.datocms-assets.com/42525/1656911785-basic-income-hero.jpg","alt":null,"title":null,"responsiveImage":{"src":"https://www.datocms-assets.com/42525/1656911785-basic-income-hero.jpg?auto=format&q=40&w=2500","alt":null,"aspectRatio":1.9921874999999998,"base64":"data:image/jpeg;base64,/9j/4AAQSkZJRgABAQAAAQABAAD/2wCEAAoHBwgHBgoICAgLCgoODhUODw0NDRIVFg0MFxMZGBYVFhUaHysjGh0oHRUWJDUlKC0vMjIyGSI4PTcwPCsxMi8BCgsLDg0OHBAQHDscHR07Ly8vLy87Ly8vLy8vNS8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vL//AABEIAA0AGAMBIgACEQEDEQH/xAAXAAEAAwAAAAAAAAAAAAAAAAAFAAIH/8QAHBAAAgMAAwEAAAAAAAAAAAAAAAECAwQREiEF/8QAFgEAAwAAAAAAAAAAAAAAAAAAAgME/8QAGBEAAwEBAAAAAAAAAAAAAAAAAAEREgL/2gAMAwEAAhEDEQA/ANZ2alVSw7H9DtYxHZTCVT5D82WtT8QL1Q1mCL0x4IUdEepBiTJ+nzT/2Q==","bgColor":"#d42f29","height":1254,"width":2500}},"heroImageUsesCodedBackground":true,"stContent":{"value":{"schema":"dast","document":{"type":"root","children":[{"type":"heading","level":2,"children":[{"type":"span","value":"What Is Basic Income?"}]},{"item":"121563692","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Despite significant federal spending on anti-poverty programs, poverty and economic insecurity remain defining features of American life."}]},{"type":"paragraph","children":[{"type":"span","value":"In the rapidly shifting economy of the past 50 years, progress has become uncoupled from shared prosperity. In the impending volatility of the coming decades, even more Americans are in danger of being left behind by stagnating wages, power asymmetries between employees and employers, mounting wealth inequality, and the specter of job automation."}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"A basic income is an unconditional, regular cash payment that guarantees a baseline of economic stability to all citizens."}]},{"type":"paragraph","children":[{"type":"span","value":"Despite significant variation among proposals, all basic income programs "},{"item":"121520273","type":"itemLink","children":[{"type":"span","value":"share four key characteristics"}]},{"type":"span","value":":"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Periodic:"},{"type":"span","value":" a recurring payment, as opposed to a one-time grant."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Cash"},{"type":"span","value":": the payment is strictly cash, to be spent however the recipient sees fit."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Individual"},{"type":"span","value":": the payment is made to individuals, not households."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Unconditional"},{"type":"span","value":": the only eligibility criteria to receive the payment is citizenship."}]}]}]},{"type":"paragraph","children":[{"type":"span","value":"Basic income offers a way to improve the economic safety net, providing a stronger foundation of income security for all Americans, no matter what."}]},{"type":"paragraph","children":[{"type":"span","value":"Despite the simplicity and appeal of basic income, as well as mounting positive evidence from small experiments, big questions remain: Is basic income the best use of government funds, or would alternative investments prove more effective? How much is “basic,” and what would be the best way to offset the program’s cost? How might the effects of a national-scale program differ from those that have been demonstrated in small-scale experiments?"}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Proposals differ on:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Whether the payments are \"universal\" to all citizens, or \"targeted\" towards those with lower incomes."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"The amount of income guaranteed by the program."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Whether guardians receive additional payments for children."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"How much of the existing welfare safety net the income would replace."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"How to offset costs."}]}]}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Depending on its design, advocates argue a basic income could:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Significantly reduce or eliminate poverty."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Stimulate growth by redistributing cash towards those who are more likely to spend it."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Promote entrepreneurship by decreasing risk."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Increase the bargaining power of workers and reduce inequality."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Bring about a variety of social benefits, including improved physical and mental health, improved educational and familial outcomes, and reductions in crime."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Decrease the bureaucratic inefficiencies of welfare provision by merging patchwork income support programs into a single program."}]}]}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Skeptics argue that a basic income could:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Discourage work and foster welfare dependence."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Be prohibitively expensive and irresponsibly spent."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Be less effective at reducing poverty than other uses of tax revenue."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Cause price inflation."}]}]}]},{"type":"paragraph","children":[{"type":"span","value":"What does the evidence say?"}]},{"type":"heading","level":2,"children":[{"type":"span","value":"Effects Basic Income on Growth"}]},{"item":"81701720","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Basic income could grow the economy by increasing demand for goods and services and raising long-term earnings through educational and professional investments."}]},{"type":"paragraph","children":[{"type":"span","value":"Whether basic income increases aggregate demand for goods and services may ultimately depend on the balance between the redistribution of spending power, and the effects of taxes used to fund the income."}]},{"type":"paragraph","children":[{"type":"span","value":"By redistributing money from higher-income to lower-income citizens, "},{"item":"23933760","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"basic income puts more money in the hands of those who are more likely to spend it"}]},{"type":"span","value":". This is because, in general, as income increases, more of a person’s needs and wants are satisfied, raising their likelihood to save instead of spend additional income. Although this would raise aggregate demand across the economy, "},{"item":"99763898","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"the potentially countervailing effects of higher taxes must be considered to determine overall impacts"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Besides increasing aggregate demand, basic income may also "},{"item":"118562862","type":"itemLink","children":[{"type":"span","value":"lead to educational and professional investments"}]},{"type":"span","value":" that lead to higher wages in the medium to long term. In California’s SEED pilot program, for instance, receiving basic income "},{"item":"121520117","type":"itemLink","children":[{"type":"span","value":"enabled recipients to work fewer part-time shifts. Instead, they spent more time searching for better employment"}]},{"type":"span","value":", completing training programs and internships, and taking greater risks in search of better opportunities."}]},{"type":"paragraph","children":[{"type":"span","value":"In a long-run study of cash transfers, "},{"item":"122563736","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Mexican infants whose mothers received conditional cash transfers showed significant benefits"}]},{"type":"span","value":" in education, wages, and geographic mobility twenty years later. And across a series of basic income experiments in the US in the 1970s,"},{"item":"101119963","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" receiving basic income was associated with an increase in the number of adults pursuing higher education, as well as increased high school completion rates"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Research on the impact of expanding the child tax credit into a child allowance - effectively implementing a basic income for kids - found that the program’s cost of "},{"item":"99763865","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"$100 billion per year would be offset by $865 billion in annual monetary and non-monetary benefits"}]},{"type":"span","value":". These include $80 billion per year from children’s increased future earnings, and $670 billion from improvements in child health and longevity."}]},{"type":"paragraph","children":[{"type":"span","value":"In developing countries, where cash transfer programs are externally funded (without taxation, often through charity), their economic effects on growth are significant and positive. In Namibia, "},{"item":"121520124","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"basic income raised the rate of those engaged in “income generating activities” from 44% to 55%"}]},{"type":"span","value":". In Mexico, "},{"item":"116532586","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"basic income recipients invested 26 cents of every peso in productive assets, raising agricultural income by nearly 10% and raising long-term consumption by 1.6 cents"}]},{"type":"span","value":". In Kenya, a one-time cash transfer of $1,000 to over 10,500 poor households "},{"item":"116396621","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"led to sharp increases in income and consumption"}]},{"type":"span","value":", with "},{"item":"116396602","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"roughly 2.6 dollars worth of increased economic activity per dollar spent"}]},{"type":"span","value":" (and despite the sudden spike in money supply, minimal price inflation occurred)."}]},{"type":"paragraph","children":[{"type":"span","value":"Econometric simulations of the effects of a US nationwide program produce conflicting results depending on the model’s assumptions. The Roosevelt Institute, using the Levy Model, found that "},{"item":"49378893","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a tax-financed universal basic income (UBI) of $6,000 per year would increase GDP by 1.65%"}]},{"type":"span","value":", and that a $12,000-per-year UBI "},{"item":"49378753","type":"itemLink","children":[{"type":"span","value":"would increase GDP by 2.62%"}]},{"type":"span","value":". The Penn Wharton Budget Model, however, which was built with different assumptions, predicts that "},{"item":"49378930","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a tax-financed UBI of $6,000 per year would decrease GDP by 1.7%"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"A robust, global body of research finds that receiving unconditional cash does not create dependency or discourage work. However, existing experiments are limited in what they can tell us about the effects of a full-scale, national program. Few experiments have studied higher-level payments in the US."}]},{"type":"paragraph","children":[{"type":"span","value":"A 2020 systematic review of 38 empirical studies on the relationship between unconditional cash transfers and basic income in different parts of the world "},{"item":"117693440","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"found no evidence that receiving unconditional cash transfers creates dependency or discourages work"}]},{"type":"span","value":":"}]},{"item":"121520921","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Regarding concerns that unconditional cash transfers discourage work, the Stanford Basic Income Lab writes: \"The evidence from existing UBI related schemes, however, negates many of these concerns and, overall, indicates that UBI-related programs have marginal effects on labor market participation.\""}]},{"type":"paragraph","children":[{"type":"span","value":"The results are especially clear in the developing world. Nobel laureate Abhijit Banerjee and colleagues conclude, in their paper titled “"},{"url":"https://www.economicpossibility.org/sources/debunking-the-stereotype-of-the-lazy-welfare-recipient-evidence-from-cash-transfe","meta":[{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"Debunking the Stereotype of the Lazy Welfare Recipient"}]},{"type":"span","value":",” that they \"find no systematic evidence that cash transfer programs discourage work.\""}]},{"type":"paragraph","children":[{"type":"span","value":"In the US, monthly recipients of an unconditional $500 in California’s Stockton Economic Empowerment Demonstration (SEED) "},{"item":"23932812","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"obtained full-time employment at more than twice the rate"}]},{"type":"span","value":" of non-recipients."}]},{"type":"paragraph","children":[{"type":"span","value":"Research on the child tax credit - effectively a basic income for the families of children - finds similar outcomes. When President Biden expanded the existing Child Tax Credit (CTC) into an unconditional program with no work requirements, "},{"item":"99763888","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"there was no change in recipients’ employment rates."}]},{"type":"span","value":" Similarly, research on expanding the CTC finds that "},{"item":"116356875","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a $1,000 increase in the benefit amount is associated with a 0.37 hour"}]},{"type":"span","value":", or "},{"url":"/1a6f41ca136b40c387b5cb7662ab6316","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"1.1% "}]},{"item":"121520280","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"increase"}]},{"type":"span","value":" in working rates of recipient single mothers. As this and the SEED basic income experiment suggest, receiving unconditional cash may sometimes increase, rather than decrease, employment rates."}]},{"type":"paragraph","children":[{"type":"span","value":"One notable exception is a series of experiments with negative income tax ("},{"url":"https://www.economicpossibility.org/tags/negative-income-tax","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"NIT"}]},{"type":"span","value":") – a form of basic income – conducted in the 1970s across the US and Canada. Although initial results found significant reductions in work participation for NIT recipients, subsequent research "},{"item":"112059079","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"discovered errors in the earlier methodology"}]},{"type":"span","value":". After correcting for the errors, the findings suggested minimal reductions in work participation, in line with findings from more recent studies."}]},{"type":"paragraph","children":[{"type":"span","value":"Econometric models - across all assumption bases - predict similarly negligible impacts of a nationwide basic income on employment. The Levy Model "},{"item":"49378898","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"predicts a 0.31% increase in employment rate"}]},{"type":"span","value":", while the Penn Wharton Budget Model "},{"item":"49378957","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"predicts a 3.2% reduction in hours (roughly 1.2 hours) worked by households"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Even if a nationwide basic income did lead to modest reductions in overall working hours, standard economic theory suggests that "},{"item":"101119703","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"those hours could be filled by presently unemployed job seekers, tightening the labor market and improving the overall efficiency"}]},{"type":"span","value":" of the economy."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Basic income could increase entrepreneurship and small business formation by decreasing the risks of failure."}]},{"type":"paragraph","children":[{"item":"115027540","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"The share of US employment accounted for by young firms has declined by nearly 30% over the past 30 years."}]},{"type":"span","value":" A growing body of evidence suggests that more generous safety nets lead to higher rates of entrepreneurship. One rationale is that "},{"item":"114773137","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"strong safety nets reduce the risks of failure faced by entrepreneurs"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"For example, one study found that "},{"item":"114773092","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"expanding access to public health insurance led to a 15% increase in self-employment"}]},{"type":"span","value":". Another study on expanding "},{"item":"114773136","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"food stamp eligibility found an increase of 12%"}]},{"type":"span","value":" in new firm incorporation. Notably, in the case of expanded food stamp eligibility, "},{"url":"https://www.theatlantic.com/politics/archive/2015/03/welfare-makes-america-more-entrepreneurial/388598/","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"Walter Frick of the Harvard Business Review observed"}]},{"type":"span","value":" that many of the newly eligible entrepreneurs didn’t enroll in the expanded food stamps program. Instead, \"simply knowing that they could fall back on food stamps if their venture failed was enough to make them more likely to take risks.\""}]},{"type":"paragraph","children":[{"type":"span","value":"In France, unemployment benefits were expanded to allow those transferring from unemployment to self-employment to temporarily continue drawing benefits. In addition, the expansion guaranteed that, should their venture fail, they would once again be eligible for unemployment benefits. "},{"item":"113763964","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"This expansion to unemployment benefits led to a 25% increase in new firm creation"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Research on the Alaska Permanent Fund Dividend ("},{"url":"https://www.economicpossibility.org/tags/alaska-permanent-fund","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"PFD"}]},{"type":"span","value":") found that "},{"item":"112058802","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"receiving unconditional dividends boosted entrepreneurship rates"}]},{"type":"span","value":", but that the effects dissipated over time. The study’s authors speculated that the gradual decline in the size of the dividends might partly account for the decreasing effect."}]},{"type":"paragraph","children":[{"type":"span","value":"Although previous studies have established a negative relationship between overall government spending and entrepreneurial activity, a recent study suggests that what matters is not so much the overall size of government, as the composition of its spending. Given a fixed “pie” of government spending, increasing budget allocation toward social and public goods (such as basic income) relative to private subsidies (such as subsidies to agriculture, energy and fuel, manufacturing, defense spending, and mining) "},{"item":"113764635","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"is associated with higher entrepreneurial activity"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Nonetheless, there has been little direct study of how basic income programs may impact entrepreneurship, in part due to the limitations inherent in small pilot programs. Thus, where entrepreneurial growth is concerned, the question of whether basic income would be the most effective expansion of government programs relative to other possibilities—such as universal healthcare, job guarantees, or the expansion of existing programs—remains unclear."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"By consolidating various welfare programs into a single basic income, the US could reduce bureaucratic inefficiencies while more effectively reducing poverty."}]},{"type":"paragraph","children":[{"type":"span","value":"Despite $361 billion of federal spending on safety net programs in 2019, "},{"item":"121520328","type":"itemLink","children":[{"type":"span","value":"34 million Americans remained in poverty."}]}]},{"type":"paragraph","children":[{"type":"span","value":"The US has a variety of overlapping welfare programs, each with different eligibility criteria, benefit amounts, and administrative infrastructures. As a result,"},{"item":"121520354","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" inadvertent “poverty traps” are created, disincentivizing low-income workers from increasing their incomes"}]},{"type":"span","value":" lest they lose more in benefits than they gain in wages."}]},{"type":"paragraph","children":[{"type":"span","value":"These various "},{"item":"121520393","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"income-support welfare programs"}]},{"type":"span","value":" could be "},{"item":"121520391","type":"itemLink","children":[{"type":"span","value":"consolidated into a single basic income instead"}]},{"type":"span","value":", reducing bureaucratic inefficiencies and poverty traps, while more effectively reducing poverty."}]},{"item":"121520489","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"In European econometric simulations, basic income—whether in the form of negative income taxes or universal basic income—"},{"item":"102567777","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"performs better at maximizing social welfare than existing systems of conditional welfare do."}]}]},{"type":"paragraph","children":[{"type":"span","value":"Similarly, in such econometric models, if it is assumed—in line with current research—that redistribution does not discourage work, then unconditional, "},{"item":"113013346","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"negative income tax–style programs perform better at optimizing social welfare than programs with work requirements"}]},{"type":"span","value":", such as the existing earned income tax credit ("},{"url":"https://www.economicpossibility.org/tags/earned-income-tax-credit","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"EITC"}]},{"type":"span","value":"), do."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"By lifting citizens out of poverty, basic income could reduce public spending on healthcare, incarceration, and housing."}]},{"type":"paragraph","children":[{"type":"span","value":"Money spent on lifting citizens out of poverty often has a fiscal multiplier effect, where every dollar spent returns more than a dollar’s worth of savings."}]},{"type":"paragraph","children":[{"type":"span","value":"A Vancouver experiment, for example, gave a one-time transfer of $7,500 to recently homeless individuals. Compared to a control group that did not receive the transfer, "},{"item":"116532858","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"the cash recipients saved an extra $8,172 per year of public expenditure"}]},{"type":"span","value":" by spending fewer nights in homeless shelters."}]},{"type":"paragraph","children":[{"type":"span","value":"As mentioned earlier in this report, research on the potential effects of a child allowance (a basic income given to children’s families) found that $100 billion of annual spending on the program would return $865 billion in annual benefits. The majority of these benefits would come from improved child health and longevity. In particular, the "},{"item":"121520269","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"public would save $3.5 billion per year in reduced expenditures on children’s and parents’ healthcare costs"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In North Carolina, giving "},{"item":"118617104","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"parents an unconditional $4,000 per year reduced arrests for minors by 22%."}]}]},{"type":"heading","level":5,"children":[{"type":"span","value":"There is no evidence - nor theory - that suggests a tax-financed basic income would cause significant price inflation."}]},{"type":"paragraph","children":[{"type":"span","value":"The Stanford Basic Income Lab writes:"}]},{"item":"121520490","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"The case of Alaska provides a large natural experiment. The Alaska Permanent Fund Dividend ("},{"url":"https://www.economicpossibility.org/tags/alaska-permanent-fund","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"PFD"}]},{"type":"span","value":") is an annual, unconditional payment of generally between $1,000 and $2,000 per year that has been given to each Alaskan citizen since 1981. Following the introduction of the PFD, "},{"item":"121520486","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Alaska's inflation levels actually declined. In the four decades since, Alaska has experienced lower inflation levels than the US average"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Other findings—from Kuwait granting every citizen $3,600 in celebration of the country's 50th anniversary, to experiments across Mexico, Kenya, and India—also find no inflationary effects associated with cash transfers."}]},{"type":"paragraph","children":[{"type":"span","value":"Similarly, no significant inflation is found by econometric models designed to predict the impacts of US nationwide UBI programs. The Levy Model predicts that even a nationwide UBI of $12,000 per adult that is deficit-financed (the most likely funding method to spike inflation) would only "},{"item":"121520496","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"raise price levels by 3.77%"}]},{"type":"span","value":" over eight years. Notably, "},{"item":"121520459","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a simulation of UBI in New York City found that housing prices would actually decrease"}]},{"type":"span","value":"."}]},{"type":"heading","level":2,"children":[{"type":"span","value":"Effects of Basic Income on Stability"}]},{"item":"81701746","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"A basic income set at the poverty line would eliminate federally recognized poverty in the US, but at a high cost burden. Smaller programs could still significantly reduce poverty."}]},{"type":"paragraph","children":[{"type":"span","value":"In 2021, "},{"item":"121520895","type":"itemLink","children":[{"type":"span","value":"82% of Americans were dissatisfied with the nation’s efforts to reduce poverty and homelessness"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"A basic income that eliminates poverty could be achieved in at least two ways: a universal basic income with an annual payment equal to the poverty line, or a negative income tax with an income floor set at the poverty line, which then phases out as earned income rises."}]},{"type":"paragraph","children":[{"type":"span","value":"One estimate that uses data from 2004 suggests that "},{"item":"101119953","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a negative income tax that fully eliminated poverty would have cost between $219 billion and $336 billion"}]},{"type":"span","value":" (in 2007 dollars), depending on its phaseout rate. Another, more recent estimate suggests that a UBI set near the poverty line would have a "},{"item":"121523569","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"gross cost of around $2.8 trillion per year"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Smaller basic incomes could still substantially alleviate poverty. A basic income of $250 per month ($3,000 per year) given in full to all households that earn less than $150,000 per year "},{"item":"100414842","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"is estimated to reduce poverty by 45% and childhood poverty by 65%"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Estimates also find that raising money with a 10% "},{"url":"https://www.economicpossibility.org/tags/value-added-tax","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"value-added tax"}]},{"type":"span","value":" and disbursing the revenue to all citizens in the form of a UBI set at 20% of the poverty line, or $2,500 per year, "},{"item":"113762737","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"would progressively benefit the incomes of the bottom 60% of the population"}]},{"type":"span","value":"."}]},{"item":"121520907","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Findings on inequality from Alaska’s Permanent Fund Dividends are mixed. Some research "},{"item":"116527387","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"finds that distributing the unconditional payment to all citizens reduced inequality"}]},{"type":"span","value":". Others found that in the long run,"},{"item":"121520897","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" it may increase inequality if wealthier recipients invest the dividend in higher-yield assets"}]},{"type":"span","value":", while lower-income recipients spend the payment on goods and services."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Simply scrapping all existing welfare programs and repurposing the funding towards a basic income would leave the poor, parents, the elderly, and the disabled worse off."}]},{"type":"paragraph","children":[{"type":"span","value":"Varieties of basic income proposed by Milton Friedman or, more, recently Charles Murray are conceived as full replacements for the entire welfare state. This is known as a “pure UBI.” This kind of revenue-neutral swap of the welfare state for an equivalent basic income "},{"item":"118562901","type":"itemLink","children":[{"type":"span","value":"would disproportionately benefit the childless, young, and nondisabled"}]},{"type":"span","value":", thus "},{"item":"121520908","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"benefiting the middle class more than the most vulnerable or lowest-income"}]},{"type":"span","value":" groups."}]},{"type":"paragraph","children":[{"type":"span","value":"The same pattern prevails in the UK. "},{"item":"121520906","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"A UBI that replaces all other means-tested benefits would benefit the middle class more than lower-income groups"}]},{"type":"span","value":", and would "},{"item":"121520905","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"increase poverty rates for children, pensioners, and working-age adults"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"But when a basic income replaces only some benefit programs, leaving others in place, the basic income might fare far better than alternative options. For example, studies find that a UBI would have potential advantages over both "},{"item":"117693242","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"unemployment"}]},{"type":"span","value":" and the "},{"item":"100746849","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"earned income tax credit"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"When thinking about how to draw the line between what should remain and what should be replaced, two considerations prove helpful. First, basic income is a more effective program in well-functioning markets. Basic income is a poor tool in "},{"item":"100416457","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"industries with underlying market problems, whether these problems be information asymmetry, externalities, or barriers to entry"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Second, we can draw a distinction between welfare programs that serve an “insurance” function and those that serve an“income support” function. In theory, "},{"item":"121520393","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"basic income could provide a stronger replacement for all income-support welfare programs (such as the earned income tax credit, or temporary assistance for needy families). However, basic income would be a poor replacement for welfare that serves a public insurance function"}]},{"type":"span","value":" (such as unemployment, or healthcare)."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Basic income recipients report significant gains in mental health."}]},{"type":"paragraph","children":[{"type":"span","value":"Basic income may significantly improve mental health by raising the baseline of economic security. Beyond being a material deprivation, "},{"item":"116254338","type":"itemLink","children":[{"type":"span","value":"poverty is a psychological deprivation, creating psychological feedback loops that perpetuate poverty."}]}]},{"type":"paragraph","children":[{"type":"span","value":"Among both the "},{"item":"74253366","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"employed"}]},{"type":"span","value":" and unemployed,"},{"item":"74253531","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" expectations of future economic insecurity significantly reduce mental health (up to 0.18 standard deviations from the mean)"}]},{"type":"span","value":". These expectations of future economic insecurity "},{"item":"116396561","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"are more detrimental to mental health than actual, realized episodes"}]},{"type":"span","value":" of economic insecurity. In particular, "},{"item":"99763875","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"fear of unemployment is the most damaging form of economic insecurity"}]},{"type":"span","value":". A basic income would raise the income floor, alleviating the depths of perceived future economic insecurity."}]},{"type":"paragraph","children":[{"type":"span","value":"In California, results from the SEED experiment find that "},{"item":"23916383","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"basic income recipients experienced clinically significant gains in mental health"}]},{"type":"span","value":". In Kenya, a one-time unconditional transfer equivalent to $1,076 "},{"item":"74016235","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"had greater positive impacts on psychological wellbeing than a five-week psychotherapy program"}]},{"type":"span","value":". In India, among low-income workers who received extra cash transfers, "},{"item":"112058555","type":"itemLink","children":[{"type":"span","value":"mistake rates declined and productivity rose by 6.2%"}]},{"type":"span","value":", which the study authors attribute to the psychological benefits of alleviating financial concerns."}]},{"type":"paragraph","children":[{"type":"span","value":"Some studies even find that "},{"item":"116254447","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"by reducing mental stresses, unconditional cash transfers reduce addictive behaviors such as alcohol and drug use and gambling"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In a nationwide experiment in Finland, recipients of basic income over a two-year period reported improved mental health and cognitive function. The researchers described the recipients’ experiences as follows:"}]},{"item":"121520918","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Finally, a global meta-analysis of the effect of cash transfers on self-reported mental health "},{"item":"116254419","type":"itemLink","children":[{"type":"span","value":"found significant benefits in low- and middle-income countries"}]},{"type":"span","value":", with an average effect size of 0.1 standard deviations."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Receiving basic income is associated with improvements in physical health, reductions in crime rates for minors, higher educational attainment, and improved familial relationships."}]},{"type":"paragraph","children":[{"type":"span","value":"In Dauphin, Canada, recipients of basic income had an "},{"item":"117694309","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"8.5% decrease in hospitalization rates"}]},{"type":"span","value":" relative to control groups. In Alaska,"},{"item":"111646369","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" each additional $1,000 in unconditional dividends from the Alaska Permanent Fund decreased the probability of an Alaskan child being obese by as much as 4.5%"}]},{"type":"span","value":", and the dividends overall were "},{"item":"101722994","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"associated with reductions in low birth weights"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In US basic income experiments in the 1970s,"},{"item":"101707835","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" receiving basic income was associated with improved infant health"}]},{"type":"span","value":". When the US subsequently reformed its welfare programs to make cash transfers conditional upon work, "},{"item":"101707785","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"infant mortality rates went up, in particular for foreign-born Mexican women"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Basic income experiments taking place across Seattle and Denver found that "},{"item":"101119963","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"receiving basic income increased the number of adults"}]},{"type":"span","value":" pursuing continuing education; "},{"item":"101119966","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"raised high school completion rates by 25%–30%"}]},{"type":"span","value":", and improved "},{"item":"116532546","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"attendance, grades, and test scores, especially for children of low-income households"}]},{"type":"span","value":". In North Carolina, children of low-income households "},{"item":"118617133","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"receiving an unconditional $4,000 per year increased their educational attainment"}]},{"type":"span","value":"."}]},{"type":"heading","level":2,"children":[{"type":"span","value":"Implementation"}]},{"item":"81701747","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Basic income could cost anywhere from $219 billion to $3.4 trillion annually depending on the details of its implementation."}]},{"type":"paragraph","children":[{"type":"span","value":"Negative income tax programs have a single cost that generally ranges from "},{"item":"121523577","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"$219 billion"}]},{"type":"span","value":" to "},{"item":"121523596","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"$1.09 trillion"}]},{"type":"span","value":" depending on benefit amounts, phaseout rates, and whether minors are included."}]},{"type":"paragraph","children":[{"type":"span","value":"The relevant costs of universal basic income programs are twofold, with both a gross cost (the total amount of money distributed) and a net cost (the total amount of money distributed, minus the revenue from additional taxes that fund the program)."}]},{"type":"paragraph","children":[{"type":"span","value":"The gross cost of a $12,000-per-year UBI is estimated between "},{"item":"121523569","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"$2.8 trillion"}]},{"type":"span","value":" and "},{"item":"101097565","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"$3.4 trillion"}]},{"type":"span","value":" annually, depending on the adult population size. The net cost of UBI proposals depends on the specific taxes used to fund the program, but current estimates range "},{"item":"101097575","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"from $539 billion"}]},{"type":"span","value":" to "},{"item":"101097311","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"$1.69 trillion"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Here is a sampling of real implementation proposals across a broad range of costs and approaches:"}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Wiederspan, Rhodes, and Shaefer’s household negative income tax"}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Features"},{"type":"span","value":": Goes to households, eliminates poverty (set at 100% of the poverty line) and phases out completely by 303% of the poverty line (33% phaseout rate)."}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Gross/net cost"},{"type":"span","value":": $336 billion per year (for calendar year 2004, using 2007 dollars. $482 billion in 2021 terms)."}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Hartley and Garfinkel’s Small Guaranteed Income"}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Features"},{"type":"span","value":": $250 per month to all individuals aged 64 and below. Begins phasing out once individual income surpasses $150,000."}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Gross cost"},{"type":"span","value":": $720 billion"}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Kirwan Institute Guaranteed Income"}]},{"type":"paragraph","children":[{"type":"span","value":"Features: Payment of $12,500 to all individuals earning $0, begins phasing out once earned "},{"type":"span","marks":["emphasis"],"value":"income"},{"type":"span","value":" surpasses $10,000, and phases out entirely once single-adult households earn $50,000. Includes additional support of up to $4,500 per child."}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Gross cost"},{"type":"span","value":": $876 billion per year."}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Andrew Yang's Freedom Dividend"}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Features"},{"type":"span","value":": $1,000 per month to all adults."}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Gross cost"},{"type":"span","value":": $2.8 trillion."}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Charles Murray’s Pure UBI Proposal"}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Features"},{"type":"span","value":": $10,000 to every adult, plus $3,000 for catastrophic healthcare. Replaces all welfare transfers."}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Gross cost"},{"type":"span","value":": $2.023 trillion (in 2002 dollars)."}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Net cost (minus taxes)"},{"type":"span","value":": $1.74 trillion."}]},{"type":"paragraph","children":[{"type":"span","marks":["emphasis"],"value":"Net cost (minus taxes and transfer replacements)"},{"type":"span","value":": $355 billion."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"How could we pay for basic income? Common financing options for smaller programs include consolidating income-support welfare programs, closing tax credits and exemptions, and stronger tax enforcement. Larger programs would require additional taxation. Commonly cited options range from value-added taxes to carbon or land value taxes."}]},{"type":"paragraph","children":[{"type":"span","value":"The cost of smaller basic income programs, such as Wiederspan, Rhodes, and Shaefer's negative income tax, can be covered by consolidating existing welfare programs, closing tax credits, or stronger tax enforcement."}]},{"type":"paragraph","children":[{"type":"span","value":"In 2019, the government spent $361 billion on income-support welfare programs ("},{"item":"121520391","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"$217 billion on the EITC, TANF, SNAP, and SSI alone"}]},{"type":"span","value":"), most or all of which could be consolidated into any basic income proposal. Recent estimates suggest that the tax gap - the difference between taxes owed and taxes paid - "},{"item":"121524291","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"totals roughly $600 billion annually"}]},{"type":"span","value":". The Treasury Department estimates that spending an extra $80 billion in IRS funding over ten years could generate an extra $320 billion in tax revenue. A further $460 billion could be raised over the next decade if data sharing between the IRS and financial institutions were implemented."}]},{"type":"paragraph","children":[{"type":"span","value":"The cost of moderately more expensive programs, such as Hartley and Garfinkel's $250-per-month guaranteed income, can be mostly covered by closing existing tax credits that disproportionately benefit the already wealthy. The remaining cost can be other means, such as stronger tax enforcement or, as Hartley and Garfinkel propose, a carbon tax."}]},{"type":"paragraph","children":[{"type":"span","value":"Larger programs, such as the Kirwan Institute's proposal or Yang's Freedom Dividend, would require all of the above, plus larger, broad-based taxation, to cover their cost. The most common type of broad-based taxation would be a value-added tax, which as of 2018, has been in effect for all OECD countries except the US. It is also in effect for 166 of the 193 countries with full UN membership. Estimates are that a "},{"item":"121524273","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"10% value-added tax in the US (half the average rate in Europe) would raise an average of $1 trillion per year"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Other taxes proposed as funding sources for basic income include carbon tax, land value tax, consumption tax, payroll tax, wealth tax, and financial transaction tax."}]},{"type":"paragraph","children":[{"type":"span","value":"One final way to offset program costs is to account for the expected economic growth caused by basic income, as well as reductions in public expenditure, such as reduced rates of incarceration, healthcare expenditure, and welfare use. For example, "},{"item":"116532858","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Vancouver's cash transfer of $7,500 to recently homeless individuals more than made up the entire program cost"}]},{"type":"span","value":" by reducing the nights that recipients spent in homeless shelters, which reduced the necessary public funding."}]},{"type":"paragraph","children":[{"type":"span","value":"Along similar lines, "},{"item":"99763865","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"one estimate found that implementing an unconditional child allowance that costs $100 billion per year could generate up to $865 billion per year"}]},{"type":"span","value":" in monetary and non-monetary benefits—again, more than offsetting the program’s full cost. Reducing childhood poverty could also spur economic growth that offsets program costs in the long run. Childhood poverty is estimated to "},{"item":"101707118","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"cost the United States $500 billion per year"}]},{"type":"span","value":", and is furthermore estimated to reduce "},{"item":"101707102","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"productivity and output by 1.3% of GDP"}]},{"type":"span","value":", "},{"item":"101707084","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"raise the costs of crime by 1.3% of GDP"}]},{"type":"span","value":", and raise the costs of "},{"item":"101706854","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"healthcare expenditure by 1.2% of GDP."}]}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Should we have basic income for all, or target it toward lower-income groups? Universal programs are simpler and more effective, but require more revenue. Targeted programs have a greater administrative burden and perpetuate welfare stigma, but are more politically and economically palatable, largely because they require less funding."}]},{"type":"paragraph","children":[{"type":"span","value":"Counterintuitively, universal and targeted basic income programs "},{"item":"121524310","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"can be identical in the extent to which they redistribute wealth"}]},{"type":"span","value":", and this is because of the way they are financed. Regardless of whether a program provides a universal transfer to all citizens financed by a flat tax, or a targeted transfer that gives a full amount to low-income citizens and phases out as earnings rise, the amount of money that is being redistributed can be the same."}]},{"item":"121524347","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Nonetheless, there are significant differences between the UBI and NIT approaches to a basic income."}]},{"type":"paragraph","children":[{"type":"span","value":"Universal programs are easier to administer, "},{"item":"117694344","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"more popular among citizens"}]},{"type":"span","value":", and "},{"item":"113523589","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"more highly correlated with higher levels of redistribution than means-targeted programs"}]},{"type":"span","value":". But they require"},{"item":"118609872","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" roughly double the level of funding to achieve similar outcomes"}]},{"type":"span","value":", which some argue "},{"item":"118609868","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"reflects a greater strain on society’s overall ability to redistribute wealth effectively"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Means-tested programs like NIT require fewer taxes to achieve identical redistributive effects. However, they require complicated administrative systems to match benefit payments to fluctuating incomes. They also create incentives to underreport income, create administrative frictions (such as the additional time individuals must spend reporting their income) that may keep the most vulnerable from receiving benefits, and perpetuate welfare stigma."}]},{"type":"paragraph","children":[{"type":"span","value":"In a series of NIT experiments across the US in the 1970s, recipients "},{"item":"100746900","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"consistently underreported their incomes"}]},{"type":"span","value":" in order to receive higher benefit payments. A national NIT program could face similar reporting issues."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"How much should basic income pay? There is not enough research identifying the most effective amount or weighing the opportunity costs."}]},{"type":"paragraph","children":[{"type":"span","value":"Some advocates argue that "},{"item":"121524328","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a just society ought to provide the highest sustainable basic income to all citizens"}]},{"type":"span","value":", while others argue that the payment should be just high enough to meet an individual’s basic needs. "},{"item":"101097248","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"By unconditionally providing for every citizen’s basic needs, basic income could ensure that all participation in the labor market is truly voluntary"}]},{"type":"span","value":", by virtue of maintaining a real alternative."}]},{"type":"paragraph","children":[{"type":"span","value":"But how much is necessary to meet a citizen’s basic needs? Higher basic income proposals take the poverty line as a rough approximation. But any program large enough to provide a minimum income of the poverty line to all citizens would carry significant opportunity costs."}]},{"type":"paragraph","children":[{"type":"span","value":"What “opportunity cost” means is that every dollar spent on basic income is one that could be spent on something else. As such, to weigh opportunity costs means to consider the fact that there is likely a point after which increasing the basic income amount does less good than allocating funds to other kinds of programs. But "},{"item":"101097117","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"as the Jain Family Institute writes, there is insufficient research to identify this threshold"}]},{"type":"span","value":":"}]},{"item":"121524348","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Current research measures a hypothetical basic income against the current reality of welfare programs, which are largely means-tested welfare programs like the EITC. There is little research that compares basic income against other hypothetical programs, which could range from job guarantees, expanded EITC programs, and universal health insurance, to further investments in housing, education, or public services."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Should basic income payments be disbursed once a year or once a month? Larger annual payments tend to be spent by recipients on larger investments, while more frequent monthly payments help to reduce income volatility and diminish debt."}]},{"type":"paragraph","children":[{"type":"span","value":"The frequency of payments will likely affect patterns of consumption, savings, and well-being. Because "},{"item":"100414989","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"the ideal frequency might vary with individual circumstances, current research is exploring the feasibility of offering recipients a choice"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In research conducted on the earned income tax credit, "},{"item":"116254496","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"more frequent payments were found to reduce stress, diminish debt, and improve mental health"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Meanwhile, evidence from Kenya suggests that "},{"item":"116254509","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"larger, lump-sum payments tend to be spent by recipients on large assets, while more frequent payments lead recipients to engage in a better balance of spending and saving"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Together with the question of how much basic income should pay and a comparison against alternatives, determining the best frequency of payments could benefit from further research."}]},{"type":"paragraph","children":[{"type":"span","value":""}]},{"type":"paragraph","children":[{"type":"span","value":""}]},{"type":"paragraph","children":[{"type":"span","value":""}]}]}},"blocks":[{"id":"121563692","variant":"feature","text":"

Thirty-eight million Americans still live in poverty. An additional 68 million live in economic insecurity.

\n","author":""},{"id":"81701720","sectionSummary":"

Current evidence suggests a number of ways in which basic income might help to grow the economy:

\n\n

Putting more money in the hands of those most likely to spend it
Reducing the risks of entrepreneurship
Enabling educational and professional investments
Reducing other welfare expenditures by lifting citizens out of poverty

\n\n

But to determine the overall impact of basic income, the benefits of unconditional cash must be weighed against the potential costs of taxes used to fund the program, and against the opportunity cost (i.e., sacrifices) of foregoing other potential policy options.

\n\n

While current evidence cannot answer all questions about basic income, current findings strongly counter two common concerns. They show that, at least in small-scale experiments, receiving unconditional cash does not discourage work. Neither does it cause significant inflation.

\n"},{"id":"121520921","variant":"simple","text":"

Despite a detailed search, we have not found any evidence of a significant reduction in labour supply. Instead, we found evidence that labour supply increases globally among adults, men and women, young and old, and the existence of some insigificant and functional reductions to the system such as a decrease in workers from the following categories: Children, the eldeerly, the sick, those with disabilities, women with young children to look after, or young people who continued studying.

\n","author":"Paz-Banez, Asensio-Coto, Lopez, & Aceytuno, 2020"},{"id":"121520489","variant":"simple","text":"

The U.S. social safety net includes a variety of income support programs that might be replaced by a single guaranteed income policy to the net benefit of current recipients and non-recipients alike.

\n","author":"Reweaving the Safety Net, Jain Family Institute"},{"id":"121520490","variant":"simple","text":"

Most economists do not share the hypothetical concern that a UBI would cause high and general inflation, because there is no reason to assume that a UBI could not be financed by taxes and dividends—which would use money already in circulation, rather than newly printed money. Insofar as inflation does not involve an expansion in money supply, then, a UBI should not lead to high or hyperinflation.

\n","author":"Stanford Basic Income Lab"},{"id":"81701746","sectionSummary":"

The observed effects of basic income are overwhelmingly positive in the areas of education, physical and mental health, crime, family relationships, poverty, and inequality.

\n\n

This should come as little surprise. Giving citizens more money should produce positive outcomes. Still, the question remains as to whether basic income would be the best approach relative to other possibilities, and how high a payment would be necessary to achieve optimal benefits.

\n\n

How basic income affects poverty depends significantly on the benefit amount, the financing method, and what happens to existing welfare programs. A benefit amount set at the poverty line could eliminate poverty, but at a significant cost that would require new taxes. A revenue-neutral basic income that simply replaces all other welfare programs would leave the most vulnerable populations words off.

\n"},{"id":"121520907","image":{"id":"49192367","url":"https://www.datocms-assets.com/42525/1676932895-lep-chart-ubi-chart.png","alt":null,"title":"SOURCE: Urban Brookings Tax Policy Center Microsimulation Model","responsiveImage":{"src":"https://www.datocms-assets.com/42525/1676932895-lep-chart-ubi-chart.png","alt":null,"aspectRatio":1.5523560209424083,"base64":"data:image/png;base64,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","bgColor":"#ffbd43","height":2292,"width":3558}}},{"id":"121520918","variant":"simple","text":"

They were more satisfied with their lives and experienced less mental strain, depression, sadness, and loneliness. They also had a more positive perception of their cognitive abilities, i.e. memory, learning and ability to concentrate. In addition, the respondents who received a basic income had a more positive perception of their income and economic wellbeing than the control group.

\n\n

The basic income recipients trusted other people and the institutions in society to a larger extent and were more confident in their own future and their ability to influence things than the control group. This may be due to the basic income being unconditional, which in previous studies has been seen to increase people’s trust in the system.

\n","author":"KELA Basic Income Recipients"},{"id":"81701747","sectionSummary":"

When implementing basic income, details are crucial. One reason the idea enjoys such bipartisan interest is because slight changes in its design can significantly change the kind of effect the program has.

\n\n

Basic income may cost anywhere from $219 billion to $3.4 trillion per year, depending on whether it’s universally given to all or targeted toward those with lower incomes, whether parents get extra cash for children, and how much the payment actually is.

\n\n

There is not enough research on the optimal payment amount. Neither is there enough research on the opportunity cost of larger basic income programs. Both universal and targeted programs achieve similar outcomes, but each carries unique positives and negatives.

\n\n

Although the costs of smaller programs would be relatively simple to offset, larger programs would require new or higher taxes, increasing the challenge of political feasibility.

\n"},{"id":"121524347","variant":"feature","text":"

By way of comparison, UBI can be described as a "pay now, tax later" approach to basic income, whereas NIT is a "tax first, pay after" method.

\n","author":"Jain Family Institute, Reweaving the Social Safety Net"},{"id":"121524348","variant":"simple","text":"

...for a given budget constraint, each dollar disbursed on a guaranteed income is one not spent on other necessary programs, so it is reasonable to ask about cost-effectiveness: what is the optimal benefit amount from a cost-benefit perspective? At what point ($3600/year? $7200/year? $12,000/year?) do decreasing marginal impacts per dollar disbursed suggest that the money may be better spent elsewhere? Here again, evidence is limited as there are few studies that directly compare the impacts of different transfer amounts.

\n","author":"Jain Family Institute, Reweaving the Safety Net"}],"links":[{"id":"121520273","slug":"all-basic-income-programs-share-four-key-features-payments-are-recurring-payments","sources":[{"slug":"what-is-basic-income"}],"lede":"A fifth feature, “universal”, is included for UBI programs.","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"All basic income programs share four key features: payments are recurring, payments are in cash, payments go to individuals, and payments are unconditional."},{"id":"23933760","slug":"marginal-propensity-to-consume","sources":[{"slug":"estimating-the-marginal-propensity-to-consume-using-the-distributions-of-income-c"}],"lede":"Marginal propensity to consume is 10 times larger for low income households than wealthy households.","tags":[{"slug":"consumption","name":"Consumption","id":"23933659"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"spending","name":"Spending","id":"23933660"}],"title":"Marginal propensity to consume is 10 times larger for low income households than wealthy households."},{"id":"99763898","slug":"the-overall-effects-of-any-guaranteed-income-program-depend-on-both-the-benefit-p","sources":[{"slug":"jain-family-institute-position-on-guaranteed-income"}],"lede":"While it's tempting to evaluate guaranteed income programs based on their sticker price, evaluating their overall impact requires factoring in the effects of funding strategies, such as taxes used to offset program costs.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"}],"title":"The overall effects of any guaranteed income program depend on both the benefit payouts and the effects of taxes used to pay for the program."},{"id":"118562862","slug":"universal-basic-income-could-lead-to-increased-human-capital-investments-that-sho","sources":[{"slug":"ubi-in-the-us-and-advanced-countries"}],"lede":"\"Second, a UBI may lead to increased human capital investments, by both young people and adults. There is extensive evidence that credit constraints are binding on many students and lead to reduced educational attainment (Lochner and Monge-Naranjo 2012). A UBI would loosen these constraints, allowing more educational investment, including on-the-job training. Effects might be particularly strong for mid-career workers who see value in retraining but cannot forgo earnings to do so. Any impact on human capital accumulation would naturally translate into higher wages in the medium to longer run.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"short-termism","name":"Short-Termism","id":"118562815"},{"slug":"productivity","name":"Productivity","id":"69648335"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"}],"title":"Universal Basic Income could lead to increased human capital investments that show up in the medium to long run."},{"id":"121520117","slug":"stockton-s-seed-basic-income-experiment-found-that-the-unconditional-cash-transfe","sources":[{"slug":"stockton-economic-empowerment-demonstration-preliminary-results"}],"lede":"“Shifts in employment patterns were tied to removing material barriers to full-time employment and removing time and capacity limits created by scarcity and precarity. Material barriers included the ability to reduce the number of part-time shifts or gig work in order to apply for stronger positions. This included completing internships, training, or coursework that lead to full-time employment or promotions, or reallocating resources in a way that facilitates seeking better job prospects. For example, one man in his mid 30s had been eligible for a real estate license for more than a year, but could not afford taking the time off work to complete it. With the $500, he says that his life was “converted 360 degrees… because I have more time and net worth to study… to achieve my goals.” As reflected in the spending data, financial scarcity generates time scarcity. Simply put, when every dollar of wage work is allocated for bills before it is earned, most cannot afford to skip work or take necessary steps toward better employment structurally trapping them regardless of individual effort. While these constraints are widely studied as limits for saving and asset building (Sherraden et. al, 2015), these findings indicate that it may also limit how workers react to local job markets.”","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"safety-net","name":"Safety Net","id":"102567776"}],"title":"Stockton's SEED basic income experiment found that the unconditional cash transfers removed material barriers to improving their economic position. In particular, recipients were able to reduce the number of part-time shifts to seek stronger positions, complete unpaid training and internship programs, and even take on greater risk in search of greater opportunities."},{"id":"122563736","slug":"in-a-mexican-study-infants-whose-families-received-conditional-cash-transfers-ave","sources":[{"slug":"education-income-and-mobility-experimental-impacts-of-childhood-exposure-to-progr"}],"lede":"The cash transfer is conditional upon a set of behaviors designed to improve health and nutrition. These include: i) accepting preventative medical care, ii) attending nutrition clinics and accepting nutritional supplements, and iii) pregnant women receiving prenatal care. In addition, the transfer was given only to mothers of the family.","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"education","name":"Education","id":"101119962"},{"slug":"social-costs-of-poverty","name":"Social Costs of Poverty","id":"101706853"},{"slug":"investment","name":"Investment","id":"121525298"}],"title":"In a Mexican study, infants whose families received conditional cash transfers, averaging one third of household income, show long-term benefits to education, wages, geographic mobility, and family formation (20 years later)."},{"id":"101119963","slug":"nit-increased-the-number-of-adults-pursuing-continuing-education-in-seattle-washi","sources":[{"slug":"expanding-the-discourse-on-antipoverty-policy-reconsidering-a-negative-income-tax"}],"lede":"\"The NIT was shown to positively affect the academic test scores of children in some sites and increase high school completion rates by as much as 25% to 30% in others (Hanushek, 1986). It was further associated with an increase in the number of adults pursuing continuing education in Seattle, Washington, and Denver, Colorado (Levine et al., 2004). Similar positive effects on low birth rates, homeownership, health, and other indicators of well-being were documented.\"","tags":[{"slug":"education","name":"Education","id":"101119962"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"}],"title":"NIT increased the number of adults pursuing continuing education in Seattle, Washington, and Denver."},{"id":"99763865","slug":"a-child-allowance-that-costs-usd100-billion-per-year-could-generate-up-to-usd865","sources":[{"slug":"a-child-allowance-could-be-worth-eight-times-the-cost"}],"lede":"The two main sources of gains are improvements to children's health & longevity ($650 billion), and increased future earnings of recipients' children ($80 billion).","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"multipliers","name":"Multipliers","id":"99763864"}],"title":"A child allowance that costs $100 billion per year could generate up to $865 billion per year in monetary and non-monetary benefits"},{"id":"121520124","slug":"basic-income-in-namibia-led-to-an-increase-of-citizens-engaged-in-income-generati","sources":[{"slug":"basic-income-grant-10-years-later"}],"lede":"“Furthermore, the BIG led to an increase in economic activity. The rate of those engaged in income-generating activities increased from 44% to 55% (counting those above the age of 15). Thus the BIG enabled recipients to increase their work either for pay, profit or family gain as well as self-employment. The grant enabled recipients to increase their productive income earned, particularly through small business entrepreneurship, including brickmaking, baking of bread and dress-making. The BIG contributed to the creation of a local market as a result of increased household buying power. This finding contradicts critics claiming a BIG would lead to laziness and dependency.”","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"developing-countries","name":"Developing Countries","id":"121520123"}],"title":"Basic income in Namibia led to an increase of citizens engaged in income-generating activities from 44% to 55%."},{"id":"116532586","slug":"cash-transfer-recipients-invested-26-cents-of-every-peso-transferred-in-productiv","sources":[{"slug":"investing-cash-transfers-to-raise-long-term-living-standards"}],"lede":"From a study focusing on Mexico.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"consumption","name":"Consumption","id":"23933659"}],"title":"Cash-transfer recipients invested 26 cents of every peso transferred in productive assets, raising long-term consumption by 1.6 cents."},{"id":"116396621","slug":"recipients-of-basic-income-in-kenya-increased-their-spending-relative-to-control","sources":[{"slug":"general-equilibrium-effects-of-cash-transfers-experimental-evidence-from-kenya"}],"lede":"\"As expected, recipient households report significantly higher total expenditure: USD PPP 293 more expenditure than eligible households in control villages (Table 1, column 1), an 11.5% increase over the control village in low saturation area mean of USD PPP 2,537. The estimated total treatment effect, including spatial effects, is larger at USD PPP 343, a 13.5% increase (column 2). This pattern between columns 1 and 2 is a first piece of evidence for the existence of localized, positive cross-village spillovers which we will see repeated across other outcomes.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"demand","name":"Demand","id":"102567468"},{"slug":"spending","name":"Spending","id":"23933660"}],"title":"Recipients of basic income in Kenya increased their spending relative to control groups by 13.5%."},{"id":"116396602","slug":"cash-transfers-increased-economic-activity-proxy-for-gdp-at-scale-in-kenya-via-mu","sources":[{"slug":"general-equilibrium-effects-of-cash-transfers-experimental-evidence-from-kenya"}],"lede":"Fiscal multipliers measure the effect that increases in government spending have on a nation's economic output. A multiplier of 1 implies every additional dollar spent yields an additional dollar of output. A multiplier of 2 means every dollar spent yields 2 dollars more in output. Higher multipliers indicate more effective spending. ","tags":[{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Cash transfers increased economic activity (proxy for GDP at scale) in Kenya (via multiplier effects of 2.46 on expenditures and 2.73 on income)."},{"id":"49378893","slug":"a-tax-funded-usd500-month-ubi-is-modeled-to-raise-gdp-by-1-65-over-the-baseline-a","sources":[{"slug":"modeling-the-macroeconomic-effects-of-a-universal-basic-income"}],"lede":"Using The Levy Institute's model of the economy, The Roosevelt Institute ran simulations to predict the effects of various levels of Universal Basic Income on the economy.","tags":[{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A tax-funded, $500/month UBI is modeled to raise GDP by 1.65% over the baseline after eight years."},{"id":"49378753","slug":"a-tax-funded-usd1k-month-ubi-is-modeled-to-increase-gdp-by-2-6-over-the-baseline","sources":[{"slug":"modeling-the-macroeconomic-effects-of-a-universal-basic-income"}],"lede":"Using The Levy Institute's model of the economy, The Roosevelt Institute ran simulations to predict the effects of various levels of Universal Basic Income on the economy.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752"}],"title":"A tax funded, $1k/month UBI is modeled to increase GDP by 2.6% over the baseline after eight years."},{"id":"49378930","slug":"a-usd6k-year-ubi-funded-by-an-11-25-payroll-tax-is-modeled-to-decrease-gdp-by-1-7","sources":[{"slug":"options-for-universal-basic-income-dynamic-modeling"}],"lede":"Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans.","tags":[{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"taxes","name":"Taxes","id":"49378929"}],"title":"A $6k/year UBI funded by an 11.25% payroll tax is modeled to decrease GDP by 1.7% by 2027."},{"id":"117693440","slug":"a-systematic-review-of-the-existing-empirical-literature-on-ubi-es-labor-supply-f","sources":[{"slug":"is-there-empirical-evidence-on-how-the-implementation-of-a-universal-basic-income"}],"lede":"The review surveyed 18 empirical cases and 38 studies. Instead, in some cases, especially in developing countries, cash transfers increased employment. A few decreases in working hours were found among the following demographics: children, the elderly, the sick, those with disabilities, and women with young children to look after.","tags":[{"slug":"work-incentives","name":"Work Incentives","id":"100746898"},{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A systematic review of the existing empirical literature on UBI & labor supply found no evidence that it would discourage work."},{"id":"23932812","slug":"stockton-basic-income-employment","sources":[{"slug":"stockton-economic-empowerment-demonstration-preliminary-results"}],"lede":"A common concern regarding unconditional cash transfers is that they might foster welfare dependency and discourage work. A growing list of studies find negligible impacts on work. But a few, like Stockton's SEED experiment, are finding unconditional transfers may actually encourage employment. \n\nAt the start of the experiment, 28% of recipients had full-time work. One year later, 40% of recipients did. In contrast, the control group saw only a 5% increase in full-time employment, from 32% to 37% a year later.","tags":[{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Recipients of Stockton's unconditional basic income obtained full-time employment at more than twice the rate of non-recipients."},{"id":"99763888","slug":"making-the-child-tax-credit-universal-caused-no-statistically-significant-changes","sources":[{"slug":"effects-of-the-expanded-child-tax-credit-on-employment-outcomes"}],"lede":"Breaking from decades of welfare strategies, President Biden expanded the child tax credit in July 2021, providing payments to all families below a given income threshold. Many have long held concerns that providing unconditional cash will discourage employment. The authors study the recently expanded CTC, finding no statistically significant changes in employment following the expansion.","tags":[{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Making the Child Tax Credit universal caused no statistically significant changes in employment rates."},{"id":"116356875","slug":"a-usd1-000-increase-in-average-ctc-is-associated-with-a-0-37-hour-increase-in-wee","sources":[{"slug":"child-tax-credit-and-maternal-labor-supply"}],"lede":"Orthodox assumptions held that providing direct cash aid without a work-requirement would discourage work. These findings, in-line with a slew of other research on unconditional cash transfers, no negative impacts on work.","tags":[{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"work-incentives","name":"Work Incentives","id":"100746898"},{"slug":"work-requirements","name":"Work Requirements","id":"101707762"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"universalism","name":"Universalism","id":"101707811"}],"title":"A $1,000 increase in average CTC is associated with a 0.37 hour increase in weekly working hours for single mothers."},{"id":"121520280","slug":"a-1-000-increase-in-average-ctc-is-associated-with-a-1-1-increase-in-labor-force","sources":[{"slug":"child-tax-credit-and-maternal-labor-supply"}],"lede":"The 1.1% increase is equivalent to a 0.37 hour increase.","tags":[{"slug":"work-incentives","name":"Work Incentives","id":"100746898"},{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A $1,000 increase in average CTC is associated with a 1.1% increase in labor force participation of single mothers"},{"id":"112059079","slug":"findings-on-employment-reductions-from-the-u-s-es-canadian-nit-experiments-from-1","sources":[{"slug":"underreporting-and-experimental-effects-on-work-effort-evidence-from-the-gary-inc"},{"slug":"failure-to-communicate-what-if-anything-can-we-learn-from-the-negative-income-tax"}],"lede":"Early results from a series of negative income tax experiments in the US found that recipients of unconditional cash significantly reduced their employment hours. Subsequent research finds that these findings are overstated, due both to poor experimental design, and a failure to model demand response.","tags":[{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"work-incentives","name":"Work Incentives","id":"100746898"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Findings on employment reductions from the U.S. & Canadian NIT experiments from 1968 - 1980 are often overstated."},{"id":"49378898","slug":"a-tax-funded-usd1k-month-ubi-is-modeled-to-increase-the-employment-rate-by-0-31-o","sources":[{"slug":"modeling-the-macroeconomic-effects-of-a-universal-basic-income"}],"lede":"Using The Levy Institute's model of the economy, The Roosevelt Institute ran simulations to predict the effects of various levels of Universal Basic Income on the economy.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"employment","name":"Employment","id":"23932807"}],"title":"A tax funded, $1k/month UBI is modeled to increase the employment rate by 0.31% over baseline after 8 years."},{"id":"49378957","slug":"a-usd6k-year-ubi-funded-by-an-11-25-payroll-tax-is-modeled-to-decrease-hours-work","sources":[{"slug":"options-for-universal-basic-income-dynamic-modeling"}],"lede":"Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"employment","name":"Employment","id":"23932807"}],"title":"A $6k/year UBI funded by an 11.25% payroll tax is modeled to decrease hours worked by households by 3.2%"},{"id":"101119703","slug":"if-basic-income-allows-workers-to-modestly-reduce-their-hours-of-work-this-could","sources":[{"slug":"could-we-end-poverty-in-a-postindustrial-society-the-case-for-a-progressive-negat"}],"lede":"\"...at any given moment, tens of millions of people - both employed and thinking about employment - are making a complex calculation as to how many hours of paid labor they need to perform...If a negative income tax placed a floor under income, it could influence these calculations by giving many people the economic security to reduce their hours of work. With such reductions, it would be possible to tighten the labor market by reducing the aggregate hours of work supplied by those already in the labor force. With the same example of an employed labor force of 100 million people averagign 1,500 work hours a year, an average reduction in hours of work of just 6 percent could open year-round, half-time jobs for as many as 9 million people who are currently not working.\"","tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"work-incentives","name":"Work Incentives","id":"100746898"}],"title":"If basic income allows workers to modestly reduce their hours of work, this could benefit the economy by tightening the labor market - the vacated hours would open up jobs for job seekers to fill."},{"id":"115027540","slug":"the-share-of-us-employment-accounted-for-by-young-firms-has-declined-by-almost-30","sources":[{"slug":"the-role-of-entrepreneurship-in-us-job-creation-and-economic-dynamism"}],"lede":"Since 2000, the rate of new business formation has been decreasing at an accelerating rate. Thus, the balance of businesses in the US economy is shifting towards older, incumbent businesses, away from entrepreneurship.","tags":[{"slug":"entrepreneurship","name":"Entrepreneurship","id":"112058724"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"business-cycles","name":"Business Cycles","id":"115027534"}],"title":"The share of US employment accounted for by young firms has declined by almost 30% over the last 30 years."},{"id":"114773137","slug":"uninsured-risk-from-leaving-wage-employment-is-a-primary-barrier-to-entrepreneurs","sources":[{"slug":"food-stamp-entrepreneurs"}],"lede":"\"Finally, I show that the empirical results are driven entirely by newly-eligible households that did not enroll, suggesting uninsured risk from leaving wage employment is the primary barrier to entrepreneurship for this population.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"entrepreneurship","name":"Entrepreneurship","id":"112058724"},{"slug":"safety-net","name":"Safety Net","id":"102567776"}],"title":"Uninsured risk from leaving wage employment is a primary barrier to entrepreneurship."},{"id":"114773092","slug":"raising-public-health-insurance-coverage-rates-increased-self-employment-by-15","sources":[{"slug":"entrepreneurship-and-public-health-insurance"}],"lede":"These findings refer to data from the State Child Health Insurance Program, and the 15% raise in self-employment occurred in parents.","tags":[{"slug":"public-goods","name":"Public Goods","id":"113764615"},{"slug":"entrepreneurship","name":"Entrepreneurship","id":"112058724"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"safety-net","name":"Safety Net","id":"102567776"}],"title":"Raising public health insurance coverage rates increased self-employment by 15%."},{"id":"114773136","slug":"following-snap-eligibility-expansion-newly-eligible-households-are-20-more-likely","sources":[{"slug":"food-stamp-entrepreneurs"}],"lede":"Many of these new entrepreneurs who were newly eligible for SNAP didn't enroll in the expanded food stamps program. Instead, as Walter Frick writes in The Atlantic, \"simply knowing that they could fall back on food stamps if their venture failed was enough to make them more likely to take risks.\"","tags":[{"slug":"entrepreneurship","name":"Entrepreneurship","id":"112058724"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"safety-net","name":"Safety Net","id":"102567776"},{"slug":"welfare","name":"Welfare","id":"23933425"}],"title":"Following SNAP eligibility expansion, newly-eligible households are 20% more likely to own a business, driven by an increase in new firm birth of 12%."},{"id":"113763964","slug":"reforming-unemployment-insurance-to-allow-recipients-to-continue-drawing-benefits","sources":[{"slug":"can-unemployment-insurance-spur-entrepreneurial-activity-evidence-from-france"}],"lede":"Of the entrepreneurial jobs that were created, they displayed higher productivity than the incumbent jobs they displaced, leading to an overall rise in productivity. The authors extrapolate that using public programs to insure against the risks of entrepreneurship offers many potential benefits.","tags":[{"slug":"entrepreneurship","name":"Entrepreneurship","id":"112058724"},{"slug":"safety-net","name":"Safety Net","id":"102567776"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"unemployment-insurance","name":"Unemployment Insurance","id":"113763963"}],"title":"Reforming Unemployment Insurance to allow recipients to continue drawing benefits for a period after starting their own business, and guaranteeing UI eligibility if their venture failed, led to a 25% increase in firm creation."},{"id":"112058802","slug":"the-alaskan-permanent-fund-dividends-appears-to-have-boosted-entrepreneurship-but","sources":[{"slug":"does-a-guaranteed-basic-income-encourage-entrepreneurship-evidence-from-alaska"}],"lede":"The positive effects were concentrated mostly in men, leaving female entrepreneurship rates mostly unchanged. The same pattern of findings applies to self-employment, with inititally positive results that fade over time. The authors speculate that one reason the effect fades is when the APF was introduced, yearly payments were quite high, and decreased over time.","tags":[{"slug":"entrepreneurship","name":"Entrepreneurship","id":"112058724"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"alaska-permanent-fund","name":"Alaska Permanent Fund Dividend","id":"101722989"},{"slug":"universalism","name":"Universalism","id":"101707811"}],"title":"The Alaskan Permanent Fund Dividends appears to have boosted entrepreneurship, but the effects dissipate over time."},{"id":"113764635","slug":"allocating-more-government-spending-towards-social-and-public-goods-relative-to-p","sources":[{"slug":"entrepreneurship-and-the-allocation-of-government-spending-under-imperfect-market"}],"lede":"Much has been said about the relationship between overall government spending and entrepreneurship (generally chiding the stifling bureaucracy of 'big government'), but we can go a level deeper, asking not about the general size of government, but the way it allocates its budget. That different types of government spending have different effects on entrepreneurship dissolves the old stereotype, opening a new question: what times of government spending are most conducive to entrepreneurship?","tags":[{"slug":"safety-net","name":"Safety Net","id":"102567776"},{"slug":"entrepreneurship","name":"Entrepreneurship","id":"112058724"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"public-goods","name":"Public Goods","id":"113764615"}],"title":"Allocating more government spending towards social and public goods relative to private subsidies is positively associated with entrepreneurship."},{"id":"121520328","slug":"the-u-s-poverty-rate-in-2019-was-10-5-34-million-americans-down-from-11-8-in-2018","sources":[{"slug":"income-and-poverty-in-the-united-states-2019"}],"lede":"“The official poverty rate in 2019 was 10.5 percent, down 1.3 percentage points from 11.8 percent in 2018. This is the fifth consecutive annual decline in poverty. Since 2014, the poverty rate has fallen 4.3 percentage points, from 14.8 percent to 10.5 percent...In 2019, there were 34.0 million people in poverty, approximately 4.2 million fewer people than 2018.”","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"The U.S. poverty rate in 2019 was 10.5% (34 million Americans), down from 11.8% in 2018."},{"id":"121520354","slug":"as-a-result-of-disaggregated-welfare-programs-each-with-their-own-eligibility-cri","sources":[{"slug":"marginal-net-taxation-of-americans-labor-supply"}],"lede":"In practice, this means one in four workers face a situation where earning additional income disqualifies them from welfare programs of which they are recipients, ultimately losing them more money in total.","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"universalism","name":"Universalism","id":"101707811"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"As a result of disaggregated welfare programs, each with their own eligibility criteria and incentives, one in four low-wage workers face marginal tax rates above 70%, creating ‘poverty traps’ that disincentivize earning further income, lest they lose more in benefits than they gain in wages."},{"id":"121520393","slug":"welfare-programs-can-be-split-into-two-categories-income-support-or-insurance-bas","sources":[{"slug":"reweaving-the-safety-net-the-best-fit-for-guaranteed-income"}],"lede":"\"We argue that guaranteed income policy is, in abstract, the best way to provide income support, meaning that our safety net could be improved by replacing some or all of the policies in this category. However, the idiosyncrasies of each program—coverage, cost, depth of assistance, and benefits calculations—mean that some existing programs may better be left in place, maintained as legacy policies, or phased out slowly to avoid harming those who rely heavily on them. Those programs in the insurance category, which provide a buffer against unpredictable and acute income or cost shocks, cannot be effectively replaced with a guaranteed income policy (though they might require other reforms). Nevertheless these policies may function more effectively when paired with a guaranteed income.\"","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Welfare programs can be split into two categories: “income support”, or “insurance”. Basic income is, in theory, the best way to provide income support."},{"id":"121520391","slug":"primary-income-support-welfare-programs-that-could-be-consolidated-into-a-single","sources":[{"slug":"reweaving-the-safety-net-the-best-fit-for-guaranteed-income"}],"lede":"In 2019, the US spent $70 billion on the EITC, $60 billion on SNAP, $31 billion on TANF, and $56 billion on SSI. In total, over $217 billion was spent on these programs alone.","tags":[{"slug":"earned-income-tax-credit","name":"Earned Income Tax Credit","id":"100746766"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"streamlining","name":"Streamlining","id":"99763946"},{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"welfare","name":"Welfare","id":"23933425"}],"title":"Primary income-support welfare programs that could be consolidated into a single basic income include: earned income tax credit (EITC), Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), temporary assistance for needy families (TANF), and supplemental security income (SSI)."},{"id":"102567777","slug":"in-the-case-of-several-eu-countries-both-ubi-and-nit-outperform-existing-conditio","sources":[{"slug":"the-case-for-negative-income-tax-with-flat-tax-in-europe-an-empirical-optimal-tax"}],"lede":"The researchers use a microeconometric model of labor supply, and Kolm's social wefare function to assess the optimality of different welfare programs. That status-quo performed the worst.","tags":[{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"safety-net","name":"Safety Net","id":"102567776"}],"title":"In the case of several EU countries, both UBI and NIT outperform existing conditional welfare measures in terms of maximizing a social welfare function."},{"id":"113013346","slug":"if-redistribution-does-not-discourage-work-then-nit-style-programs-better-optimiz","sources":[{"slug":"optimal-income-transfer-programs-intensive-versus-extensive-labor-supply-response"}],"lede":"Many existing models assume an 'equity-efficiency' tradeoff between redistribution and efficiency. Higher redistribution is assumed to reduce work incentives, reducing overall economic efficiency. The authors suggest that if efficiency were held constant, unconditional transfers like negative income taxation would be preferable to work-dependent ones like the earned income tax credit.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"work-incentives","name":"Work Incentives","id":"100746898"},{"slug":"earned-income-tax-credit","name":"Earned Income Tax Credit","id":"100746766"}],"title":"If redistribution does not discourage work, then NIT-style programs better optimize social welfare functions relative to to EITC-style ones."},{"id":"116532858","slug":"recently-homeless-recipients-of-a-cash-transfer-saved-an-extra-usd8-172-of-public","sources":[{"slug":"new-leaf-project-taking-bold-action-on-homelessness"}],"lede":"Cash recipients saved a total of $17,571 compared to their baseline shelter use. Non-cash participants only saved $9,399 compared to their baseline shelter use.","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"homelessness","name":"Homelessness","id":"116532839"}],"title":"Recently homeless recipients of a cash transfer saved an extra $8,172 of public expenditure by spending fewer nights in homeless shelters, more than recuperating the entire cost of the transfer program."},{"id":"121520269","slug":"a-child-allowance-costing-100-billion-per-year-is-estimated-to-reduce-expenditure","sources":[{"slug":"the-costs-and-benefits-of-a-child-allowance"},{"slug":"a-child-allowance-could-be-worth-eight-times-the-cost"}],"lede":"In particular, this child allowance could be achieved by converting the current child tax credit, making it fully refundable, and increasing its value to $3,600 per child 0-5, and $3,000 per child 6-17. Doing so at a cost of $100 billion per year is estimated to generate $800 billion per year in combined monetary and non-monetary benefits.","tags":[{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"health","name":"Health","id":"101706852"},{"slug":"savings","name":"Savings","id":"23932837"},{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"}],"title":"A child allowance costing $100 billion per year is estimated to reduce expenditures on children's and parents' healthcare costs by $3.5 billion per year."},{"id":"118617104","slug":"unconditional-income-an-additional-usd4-000-per-year-reduced-arrests-for-16-and-1","sources":[{"slug":"parents-income-and-children-s-outcomes"}],"lede":"\"The results for parental arrests indicate that parents are engaging in less destructive behavior as a result of the increased income......with regard to the criminal arrests, American Indians (who received unconditional income) have diverged and now are less likely than the non-American Indians (whose rates of arrests remained constant over time) to commit these minor crimes.\"","tags":[{"slug":"social-costs-of-poverty","name":"Social Costs of Poverty","id":"101706853"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"crime","name":"Crime","id":"118617103"}],"title":"Unconditional income (an additional $4,000 per year) reduced arrests for 16 and 17 year olds by 22%."},{"id":"121520486","slug":"alaska-dividend-inflation","sources":[{"slug":"universal-basic-income-and-inflation-reviewing-theory-and-evidence"}],"lede":"“Some further evidence we can examine is Alaska’s inflation statistics. Alaska has had a universal basic income via the Alaska Permanent Fund Dividend, which has provided each resident between $500 and $3,000 per year funded by state oil assets, since 1982. Since implementing that program, Alaska has had lower inflation than the rest of the United States, whereas before it had equal. While no formal causal study has yet confirmed whether this supports the potential “deflation” effect of universal basic income I discussed earlier, it does provide suggestive evidence that it is possible and that a US-based universal basic income would not cause significant inflation. We can also appreciate the post-transfer deflation from Kuwait, where Kuwait granted a $3,500 transfer to all its citizens in 2011.”","tags":[{"slug":"inflation","name":"Inflation","id":"49378895"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"}],"title":" Since implementing the APF - Alaska's quasi universal basic income - Alaska has experienced no spike in inflation, and notably, had lower inflation than the rest of the United States."},{"id":"121520496","slug":"a-debt-funded-12-000-year-ubi-is-modeled-to-raise-prices-by-3-77-over-8-years","sources":[{"slug":"modeling-the-macroeconomic-effects-of-a-universal-basic-income"}],"lede":"This estimate comes from using the Levy Model.","tags":[{"slug":"inflation","name":"Inflation","id":"49378895"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A debt funded, $12,000/year UBI is modeled to raise prices by 3.77% over 8 years."},{"id":"121520459","slug":"one-econometric-model-finds-that-a-universal-basic-income-in-new-york-city-would","sources":[{"slug":"universal-basic-income-and-the-city"}],"lede":"“The most important results for the housing market are that the lower income for those at the top leads to lower rents and prices per square foot, and to a lower home ownership rate. The housing expenditure to income ratio falls as well, suggesting that affordability improves as the real cost of housing falls. However, despite the lower cost of housing, less housing is built and used, since the city is, on average, poorer. This alleviates concerns that UBI would lead to inflation of house prices and rents.”","tags":[{"slug":"inflation","name":"Inflation","id":"49378895"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"One econometric model finds that a Universal Basic Income in New York City would decrease inflation and rent prices."},{"id":"121520895","slug":"in-2021-82-of-americans-were-dissatisfied-with-the-nation-s-efforts-to-deal-with","sources":[{"slug":"satisfaction-with-five-key-societal-issues-in-u-s-plummets"}],"lede":"This represents a 4% drop from the previous year, when 78% were dissatisfied. The poll was run between January 4th and 15th, 2021.","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"In 2021, 82% of Americans were dissatisfied with the nation's efforts to deal with poverty and homelessness."},{"id":"101119953","slug":"a-nit-with-an-income-threshold-at-the-federal-poverty-line-and-a-33-phaseout-rate","sources":[{"slug":"expanding-the-discourse-on-antipoverty-policy-reconsidering-a-negative-income-tax"}],"lede":"Raising the income threshold to 133% of the poverty line would've raised the cost to $635 billion. Increasing the phaseout rate would’ve reduced the cost to $219 billion.","tags":[{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"program-costs","name":"Program Costs","id":"101097300"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"A NIT with an income threshold at the federal poverty line and a 33% phaseout rate would cost $336 billion, and phaseout completely at 303% of the poverty line."},{"id":"121523569","slug":"andrew-yang-s-freedom-dividend-is-estimated-to-have-a-gross-cost-of-2-8-trillion","sources":[{"slug":"does-andrew-yang-s-freedom-dividend-proposal-add-up"}],"lede":"“Calculating the gross cost of the Freedom Dividend is straightforward. According to an analysis of Yang’s Freedom Dividend by the UBI Center, an open source think tank researching universal basic income policies, there are about 236 million adult citizens in the United States. At $12,000 a piece, the total gross cost of the dividend would be $2.8 trillion each year.”","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"program-costs","name":"Program Costs","id":"101097300"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"}],"title":"Andrew Yang's Freedom Dividend is estimated to have a gross cost of $2.8 trillion per year."},{"id":"100414842","slug":"a-guaranteed-income-of-usd250-month-per-person-under-65-the-equivalent-of-expandi","sources":[{"slug":"jain-family-institute-position-on-guaranteed-income"}],"lede":"JFI's position paper outlines their support for $250/month as a first-step towards implementing basic income. Drawing on research from Hartley & Garfinkel (2020), they suggest even such a small benefit level could make a large dent in poverty.","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"A guaranteed income of $250/month per person under 65, the equivalent of expanding the existing refundable child tax credit to adults, would reduce the poverty rate by 5.9% (from 13.2% to 7.3%) , and the child poverty rate by 8.2% (from 12.6% to 4.4%)."},{"id":"113762737","slug":"a-10-value-added-tax-coupled-with-partial-ubi-would-reduce-inequality-raising-the","sources":[{"slug":"raising-revenue-with-a-progressive-value-added-tax"}],"lede":"The UBI amount is based on family size and composition. It would be provided quarterly to each family, for an annual reimbursement equal to two times the poverty line, multiplied by the VAT rate. For example, with a 10% VAT, a family of four would receive $5,200 per year. On these scheme, after-tax income would rise by 16.9% for the lowest quintile, 4.6% for the second, remain virtually unchanged or the middle (0.1%), reduce the fourth quintile by 2.4%, and the top quintile by 4.7%.","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"safety-net","name":"Safety Net","id":"102567776"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"value-added-tax","name":"Value-Added Tax","id":"113762711"}],"title":"A 10% value-added tax coupled with partial UBI would reduce inequality, raising the after-tax income of the bottom three income quintiles. "},{"id":"116527387","slug":"alaska-s-permanent-fund-dividends-help-reduce-alaskan-income-inequality","sources":[{"slug":"the-alaska-permanent-fund-dividend-a-case-study-in-the-direct-distribution-of-res"}],"lede":"\"Two features of the dividend—it is an equal distribution to all residents and it is taxable as personal income by the federal government—contribute to it helping to level the income distribution. The dividend adds a larger percentage to after-tax income at the lower end of the distribution than at the upper end.\"","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"inequality","name":"Inequality","id":"69359341"}],"title":"Alaska’s Permanent Fund dividends help reduce Alaskan income inequality."},{"id":"121520897","slug":"apf-dividends-were-found-to-increase-income-inequality","sources":[{"slug":"can-an-oil-rich-economy-reduce-its-income-inequality-empirical-evidence-from-alas"}],"lede":"Findings were generated using an autoregressive distributed lag approach to cointegration and the Johansen cointegration approach, applied to annual time series data from 1963 to 2012.","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"alaska-permanent-fund","name":"Alaska Permanent Fund Dividend","id":"101722989"}],"title":"APF dividends were found to increase income inequality."},{"id":"118562901","slug":"a-pure-ubi-that-replaces-all-other-welfare-programs-redistributes-money-from-the","sources":[{"slug":"ubi-in-the-us-and-advanced-countries"}],"lede":"\"This implies that were we to eliminate current income support programs and apply the funds towards a pure UBI, there would be a relative redistribution from low-earners to zero earners, but the first-order effects would be a massive distribution up the earnings distribution, along with a redistribution from the elderly and disabled towards those who are neither, primarily but not exclusively those without children.\"","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"neoliberalism","name":"Neoliberalism","id":"118560604"}],"title":"A \"pure\" UBI (that replaces all other welfare programs) redistributes money from the elderly and disabled towards those who are neither."},{"id":"121520908","slug":"a-pure-ubi-that-entirely-replaces-welfare-would-distribute-earnings-upwards","sources":[{"slug":"ubi-in-the-us-and-advanced-countries"}],"lede":"\"This implies that were we to eliminate current income support programs and apply the funds towards a pure UBI, there would be a relative redistribution from low-earners to zero earners, but the first-order effects would be a massive distribution up the earnings distribution, along with a redistribution from the elderly and disabled towards those who are neither, primarily but not exclusively those without children.\"","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"}],"title":"A \"pure\" UBI (that entirely replaces welfare) would distribute earnings upwards."},{"id":"121520906","slug":"in-the-uk-a-ubi-that-replaces-all-other-means-tested-benefits-would-benefit-the-m","sources":[{"slug":"universal-basic-income-an-idea-whose-time-has-come"}],"lede":"“As figure B1 shows, the overall impact of each of these schemes is progressive in that those in the bottom decile enjoy a substantial increase in average income while those in the top decile experience a fall in average income. On the other hand, under schemes 1 and 2 those in the middle deciles (4 to 8) do better than those in deciles 2 and 3. As a result, middle-income groups are significant gainers from such a scheme and do better than those in deciles 2 and 3. This is because any additional withdrawals in taxation from their income are likely to be lower than the loss of benefits in the present system. As a result, such a move would improve the incentive to work and possibly raise public support for such a scheme.”","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"In the UK, a UBI that replaces all other means-tested benefits would benefit the middle-class more than lower-income groups."},{"id":"121520905","slug":"in-the-uk-a-ubi-that-replaces-all-other-means-tested-benefits-would-increase-pove","sources":[{"slug":"universal-basic-income-an-idea-whose-time-has-come"}],"lede":"Specifically, child poverty could increase anywhere between 5.8% - 10.4% depending on program design. Pensioner poverty could increase between 3.9% to 16.8%. Working class poverty could increase o.4% to 2.8%. In all cases, these rises in poverty rates are the result of the UBI providing less benefit payments than the programs it replaces.","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"streamlining","name":"Streamlining","id":"99763946"}],"title":"In the UK, a UBI that replaces all other means-tested benefits would increase poverty rates for children, pensioners, and the working-age adults."},{"id":"117693242","slug":"a-majority-of-the-working-population-gains-from-switching-from-unemployment-benef","sources":[{"slug":"efficient-redistribution-comparing-basic-income-with-unemployment-benefits"}],"lede":"For a simple utility function with both intensive & extensive margins, the unemployed have higher utility with basic income (BI) than unemployment benefits (UB). For a general utility function that ignores intensive margin and a given level of unemployment, lowering UB and raising BI always raises utilitarian welfare.","tags":[{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"universalism","name":"Universalism","id":"101707811"}],"title":"A majority of the working population gains from switching from unemployment benefits to universal basic income."},{"id":"100746849","slug":"a-ubi-is-preferable-to-subsidies-of-low-wage-work-on-economic-moral-and-political","sources":[{"slug":"why-a-ubi-is-better-than-subsidies-of-low-wage-work"}],"lede":"Economic arguments include work incentives and wage depression. Moral arguments include creating a realistic 'exit option' for recipients, allowing them to leave undesirable arrangements without fear of material destitution. Political arguments include the idea that universal programs tend to be more popular and sustainable than targeted transfers.","tags":[{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"A UBI is preferable to subsidies of low-wage work on economic, moral, and political grounds."},{"id":"100416457","slug":"unconditional-cash-transfers-aren-t-great-tools-for-solving-underlying-market-pro","sources":[{"slug":"jain-family-institute-position-on-guaranteed-income"}],"lede":"JFI's position paper outlines two distinct spheres of welfare programs: income-assistance, and public insurance. They suggest that basic income can be a good replacement for income-assistance programs, but cannot address other kinds of issues that are better handled with forms of public insurance. In other words, if a market is broken, simply pumping more money into it won't fix the underlying problems.","tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"welfare","name":"Welfare","id":"23933425"}],"title":"Unconditional cash transfers aren't great tools for solving underlying market problems, such as information asymmetry, externalities, or barriers to entry, all of which distort the efficient distribution of goods and services."},{"id":"116254338","slug":"poverty-creates-psychological-feedback-loops-that-perpetuate-es-entrench-poverty","sources":[{"slug":"on-the-psychology-of-poverty"}],"lede":"In particular, the authors find that poverty drives stress and negative affective states that lead to short-sighted and risk-averse decision-making, perpetuating the cycles that tend towards poverty.","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"social-costs-of-poverty","name":"Social Costs of Poverty","id":"101706853"}],"title":"Poverty creates psychological feedback loops that perpetuate & entrench poverty."},{"id":"74253366","slug":"even-the-currently-employed-especially-men-in-full-time-positions-experience-econ","sources":[{"slug":"economic-insecurity-a-socioeconomic-determinant-of-mental-health"}],"lede":"This paper used data from the British Household Panel Survey to explore the effects of economic insecurity on mental health in the working age UK population. While much literature exists on the negative effects of unemployment on mental health, economic insecurity is a relatively new category, defined as \"the anxiety produced by the possible exposure to adverse economic events and by the anticipation of the difficulty to recover from them.\"","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"economic-insecurity","name":"Economic Insecurity","id":"74233734"}],"title":"Even the currently employed, especially men in full-time positions, experience economic insecurity as a significant negative factor on mental health"},{"id":"74253531","slug":"expected-economic-insecurity-within-the-next-year-reduces-mental-health-by-0-18-o","sources":[{"slug":"economic-insecurity-a-socioeconomic-determinant-of-mental-health"}],"lede":"This finding holds for both males and females. As other insights from this paper show, expectations of worsening financial situations are more harmful to mental health than the real-time experience of living through them.","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"economic-insecurity","name":"Economic Insecurity","id":"74233734"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Expected economic insecurity within the next year reduces mental health by 0.18 of a standard deviation from the mean"},{"id":"116396561","slug":"perceived-economic-insecurity-is-more-detrimental-to-mental-health-than-actual-re","sources":[{"slug":"economic-insecurity-a-socioeconomic-determinant-of-mental-health"}],"lede":"\"In particular, perceived future risks are more damaging to mental health than realised volatility...For both genders it is the case that subjective measures of economic insecurity have a larger negative effect than objective measures, based on realised income volatility, and the size of the effect is not influenced by labour market outcomes.\"","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"economic-insecurity","name":"Economic Insecurity","id":"74233734"}],"title":"Perceived economic insecurity is more detrimental to mental health than actual, realized risk."},{"id":"99763875","slug":"fear-of-unemployment-is-the-most-damaging-form-of-economic-insecurity-particularl","sources":[{"slug":"economic-insecurity-a-socioeconomic-determinant-of-mental-health"}],"lede":"Data was collected from the British Household Panel Survey. Headline findings included that perceived future risks are more damaging to mental health than actual, realized volatility. ","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"economic-insecurity","name":"Economic Insecurity","id":"74233734"}],"title":"Fear of unemployment is the most damaging form of economic insecurity, particularly for males."},{"id":"23916383","slug":"insight-1","sources":[{"slug":"stockton-economic-empowerment-demonstration-preliminary-results"}],"lede":"\"When the control group was compared to themselves as a baseline, there was no significant change in scores on the Kessler 10. However, the treatment group showed significant improvement in scores when compared to themselves at baseline. Cohen’s d for this effect was .29, again a small effect. Taken together, these findings suggest that the treatment group experienced clinically and statistically significant improvements in their mental health that the control group did not - moving from likely having a mild mental health disorder to likely mental wellness over the year-long intervention.\"","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Recipients of Stockton's unconditional basic income experienced clinically significant gains in mental health."},{"id":"74016235","slug":"in-rural-kenya-an-unconditional-cash-transfer-equivalent-to-usd1-076-had-greater","sources":[{"slug":"the-comparative-impact-of-cash-transfers-and-a-psychotherapy-program-on-psycholog"}],"lede":"The study compared the effects of cash transfers, a five-week psychotherapy program, and a combination of both among 5,756 individuals in rural Kenya. Psychotherapy alone had no measurable effect on psychological or economic outcomes, while cash transfer recipients were better off both economically and psychologically. ","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"In rural Kenya, an unconditional cash transfer equivalent to $1,076 had greater positive impacts on psychological (and economic) well-being than a 5-week psychotherapy program"},{"id":"112058555","slug":"when-indian-workers-have-more-cash-on-hand-productivity-rises-by-6-2-and-mistake","sources":[{"slug":"do-financial-concerns-make-workers-less-productive"}],"lede":"Results were found from a test group of low-income Indian manufacturing workers receive a cash infusion plus earlier paychecks (increasing overall liquidity). The extra cash was used to immediately pay down debts, and purchase household essentials. The authors suggest that the results are derivative from the psychological benefits of reducing financial concerns. ","tags":[{"slug":"productivity","name":"Productivity","id":"69648335"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"safety-net","name":"Safety Net","id":"102567776"},{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"mental-health","name":"Mental health","id":"23916384"}],"title":"When Indian workers have more cash-on-hand, productivity rises by 6.2%, and mistake rates decline."},{"id":"116254447","slug":"not-only-do-unconditional-cash-transfers-not-lead-to-gambling-drug-or-alcohol-use","sources":[{"slug":"reweaving-the-safety-net-the-best-fit-for-guaranteed-income"}],"lede":"\"Decades of research on unconditional cash transfers (guaranteed income or otherwise) has consistently demonstrated that providing unrestricted aid does not lead to gambling, drug use or profligacy. In fact, some studies show that providing cash can reduce such behaviors, presumably because it alleviates the financial stresses that generate them.\"","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Not only do unconditional cash transfers *not* lead to gambling, drug, or alcohol use, some studies find these behaviors are *reduced* by transfers, perhaps because they alleviate the financial and mental stresses that generate them."},{"id":"116254419","slug":"a-meta-analysis-of-cash-transfers-on-self-reported-mental-health-found-they-signi","sources":[{"slug":"the-impact-of-cash-transfers-on-subjective-well-being-and-mental-health-in-low-mi"}],"lede":"\"Two authors double-screened 1,147 records of potentially relevant studies, finding 38 studies suitable for inclusion in our meta-analysis, covering 100 outcomes and a total sample of n=114,274 individuals. The average effect size (Cohen’s d) of 38 CT studies on our composite outcome of MH and SWB is 0.10 standard deviations (SDs) (95% CI: 0.8, 0.13) for an average time until follow-up of two years. However, there is a substantial amount of heterogeneity in the estimated effects (!!= 64% and 95% Prediction interval: 0.0021, 0.215). CT value, both in absolute terms and relative to previous income, are significant predictors of the effect size. We find only weak evidence that the impact diminishes over time.\"","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"A meta-analysis of cash transfers on self-reported mental health found they significantly increase mental health in low and middle income countries (average effect size of 0.1 standard deviations)."},{"id":"117694309","slug":"canadian-nit-led-to-8-5-decrease-in-hospitalizations","sources":[{"slug":"no-strings-attached-the-behavioral-effects-of-u-s-unconditional-cash-transfer-pro"},{"slug":"the-town-with-no-poverty-the-health-effects-of-a-canadian-guaranteed-annual-incom"}],"lede":"\"The Canadian negative income tax was the only experiment to track health outcomes, and it found that recipients experienced an 8.5 percent decrease in hospitalizations compared to the control group, especially for mental health, accidents, and injuries.\"","tags":[{"slug":"health","name":"Health","id":"101706852"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"social-costs-of-poverty","name":"Social Costs of Poverty","id":"101706853"}],"title":"Canadian NIT led to 8.5% decrease in hospitalizations."},{"id":"111646369","slug":"evidence-from-the-alaska-permanent-fund-suggests-that-an-additional-one-thousand","sources":[{"slug":"universal-cash-transfers-reduce-childhood-obesity-rates"}],"lede":"Extrapolating a similar payment to the US, the authors find that 66,000 annual cases of childhood obesity could be averted, on average, resulting in medical savings of roughly $310 million per year.","tags":[{"slug":"health","name":"Health","id":"101706852"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Evidence from the Alaska Permanent Fund suggests that an additional one thousand dollars in APF payments decreases the probability of an Alaskan child being obese by as much as 4.5%."},{"id":"101722994","slug":"alaska-s-apf-dividend-was-associated-with-a-0-4-0-7-decrease-in-low-birth-weight","sources":[{"slug":"do-cash-transfer-programmes-yield-better-health-in-the-first-year-of-life-a-syste"}],"lede":"Alaska's Annual Permanent Fund is a publicly-managed investment portfolio funded by a 25% tax on oil sales. Operating since the early 1980's, residents have received an annual payment generally between $1,000 - $2000.","tags":[{"slug":"health","name":"Health","id":"101706852"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"alaska-permanent-fund","name":"Alaska Permanent Fund Dividend","id":"101722989"}],"title":"Alaska's APF dividend was associated with a 0.4% - 0.7% decrease in low birth weight."},{"id":"101707835","slug":"3-targeted-and-unconditional-cash-transfer-programs-found-positive-effects-on-inf","sources":[{"slug":"do-cash-transfer-programmes-yield-better-health-in-the-first-year-of-life-a-syste"}],"lede":"“All three low-income-targeted unconditional programmes demonstrated mainly improved outcomes during the first year of life. The Gary Experiment yielded 117.6–530.4 g higher birth weight than children in the control group, depending on risk characteristics of mothers.23 The other US-based study found that AFDC was marginally associated with increased birth weight among poor whites (beta=32.00, SE: 16.11), but no significant change for other groups.22 The study from Manitoba, Canada suggested a monthly supplement was associated with a several positive outcomes, including a 29% reduction in the risk of low birth weight (95%CI 0.63 to 0.81), a 24% reduction in risk of preterm birth (95%CI 0.69 to 0.84), a 10% reduction in risk of small for gestation age (95%CI 0.81 to 099) and a 13% increase in large for gestational age (95%CI 1.05 to 1.23).\"","tags":[{"slug":"health","name":"Health","id":"101706852"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"work-requirements","name":"Work Requirements","id":"101707762"},{"slug":"universalism","name":"Universalism","id":"101707811"}],"title":"3 targeted & unconditional cash transfer programs found positive effects on infant health in the first year of life."},{"id":"101707785","slug":"reforms-to-the-us-welfare-system-that-made-cash-transfers-conditional-upon-work-w","sources":[{"slug":"do-cash-transfer-programmes-yield-better-health-in-the-first-year-of-life-a-syste"}],"lede":"\"Reforms to the US welfare system were associated with an increase in infant mortality rate for children of foreign-born Mexican women of 3.1 deaths per 1000 live births (SE: 0.001), from a baseline rate of 4.23–6.22 deaths per 1000 live births depending on the state.\"","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"welfare","name":"Welfare","id":"23933425"}],"title":"Reforms to the US welfare system that made cash transfers conditional upon work were associated with an increase in infant mortality of 3.1 deaths per live birth for foreign-born Mexican women."},{"id":"101119966","slug":"nit-was-shown-to-increase-high-school-completion-rates-by-as-much-as-25-to-30","sources":[{"slug":"expanding-the-discourse-on-antipoverty-policy-reconsidering-a-negative-income-tax"}],"lede":"\"The NIT was shown to positively affect the academic test scores of children in some sites and increase high school completion rates by as much as 25% to 30% in others (Hanushek, 1986).\"","tags":[{"slug":"education","name":"Education","id":"101119962"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"}],"title":"NIT was shown to increase high school completion rates by as much as 25% to 30%."},{"id":"116532546","slug":"attendance-grades-and-test-scores-were-higher-for-children-of-families-who-receiv","sources":[{"slug":"the-effects-of-a-negative-income-tax-on-school-performance-results-of-an-experime"}],"lede":"Headline results included an increase in average reading achievement in children grades 4 through 6. No beneficial effects were observed for older children.","tags":[{"slug":"education","name":"Education","id":"101119962"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Attendance, grades, and test scores were higher for children of families who received NIT, especially younger children and children from low-income households."},{"id":"118617133","slug":"an-additional-usd4k-yr-for-the-poorest-households-increases-educational-attainmen","sources":[{"slug":"parents-income-and-children-s-outcomes"},{"slug":"no-strings-attached-the-behavioral-effects-of-u-s-unconditional-cash-transfer-pro"}],"lede":"The unconditional wasn't exactly unconditional. Children were required to complete high school in order to receive the money by 18. Without completing high school, they had to wait unitl 21.","tags":[{"slug":"education","name":"Education","id":"101119962"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"An additional $4k/yr for the poorest households increases educational attainment by one year at age 21."},{"id":"121523577","slug":"a-nit-set-at-100-of-the-poverty-line-with-a-50-phaseout-rate-would-ve-cost-219-bi","sources":[{"slug":"expanding-the-discourse-on-antipoverty-policy-reconsidering-a-negative-income-tax"}],"lede":"This program would eliminate poverty, and payments would phaseout entirely by 200% of the poverty line. Reducing the phaseout rate to 33% would have the payments phaseout by 303% of poverty, and raise the cost to $336 billion.","tags":[{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"program-costs","name":"Program Costs","id":"101097300"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"A NIT set at 100% of the poverty line with a 50% phaseout rate would've cost $219 billion in 2004 (using 2007) dollars."},{"id":"121523596","slug":"a-nit-designed-to-eliminate-poverty-in-2002-with-a-minimum-payment-of-9-359-that","sources":[{"slug":"the-relative-costs-of-a-ubi-and-a-nit"}],"lede":"This estimate uses the 2002 total US population of 285,933,410; provides $3,500 for persons younger than 18; $9,359 for persons aged 18-64; $8,628 for persons 65 and above; and assumes a $7,652.9 billion tax base. Persons aged 18-64 would breakeven between payments and increased taxes at $36,559 of income.","tags":[{"slug":"program-costs","name":"Program Costs","id":"101097300"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"}],"title":"A NIT designed to eliminate poverty (in 2002) with a minimum payment of $9,359 that reduces by 25.6% per dollar earned is estimated to have costed $1.09 trillion."},{"id":"101097565","slug":"the-gross-cost-of-a-usd12k-yr-ubi-paid-to-all-adults-and-usd6k-yr-to-children-is","sources":[{"slug":"the-cost-of-basic-income-back-of-the-envelope-calculations"}],"lede":"As a 'back of the envelope' calculation, these estimates make simplifying assumptions to provide a ballpark range. Gross cost refers to the total revenue required to implement the program, before taking into account the 'claw back' from taxes used to fund it.","tags":[{"slug":"program-costs","name":"Program Costs","id":"101097300"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"The gross cost of a $12k/yr UBI paid to all adults, and $6k/yr to children is estimated at $3.4 trillion per year."},{"id":"101097575","slug":"the-net-cost-of-a-usd12k-yr-ubi-to-all-adults-and-usd6k-yr-to-all-children-is-est","sources":[{"slug":"the-cost-of-basic-income-back-of-the-envelope-calculations"}],"lede":"As a 'back of the envelope' calculation, these estimates make simplifying assumptions to provide a ballpark range. The net cost refers to the cost of the program after taking into account the taxes which 'claw back' some of the UBI payment from wealthier recipients.","tags":[{"slug":"program-costs","name":"Program Costs","id":"101097300"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"The net cost of a $12k/yr UBI to all adults and $6k/yr to all children is estimated at $539 billion."},{"id":"101097311","slug":"the-net-cost-of-a-usd12k-yr-ubi-to-all-adults-is-estimated-at-usd1-69-trillion-pe","sources":[{"slug":"the-relative-costs-of-a-ubi-and-a-nit"}],"lede":"An equivalent negative income tax is estimated to cost roughly half as much, while achieving equivalent redistributional outcomes.","tags":[{"slug":"program-costs","name":"Program Costs","id":"101097300"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"The net cost of a $12k/yr UBI to all adults is estimated at $1.69 trillion per year."},{"id":"121524291","slug":"in-2021-the-u-s-tax-gap-difference-between-taxes-owed-and-collected-totals-around","sources":[{"slug":"the-case-for-a-robust-attack-on-the-tax-gap"}],"lede":"Over the next 10 years, the present tax gap represents roughly $7 trillion dollars of uncollected tax revenue. The majority of uncollected revenue stems from those with top incomes. The primary cause of the tax gap is identified as an under-staffed IRS with outdated technology, leaving them unable to collect 15% of taxes owed. The author estimates that an extra $80 billion in IRS funding could generate an extra $320 billion over the next decade. Allowing the IRS to use information from financial institutions - at no cost to taxpayers - is estimated to raise an extra $460 billion over the next decade.","tags":[{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"},{"slug":"taxes","name":"Taxes","id":"49378929"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"inequality","name":"Inequality","id":"69359341"}],"title":"In 2021, the U.S. \"tax gap\" (difference between taxes owed and collected) totals around $600 billion, annually. The vast majority (roughly 65%) of dodged taxes are accounted for by the top 10% of the income distribution."},{"id":"121524273","slug":"a-10-value-added-tax-in-2020-is-estimated-to-have-potentially-raised-842-billion","sources":[{"slug":"raising-revenue-with-a-progressive-value-added-tax"}],"lede":"Paying out a UBI equal to the VAT rate times twice the poverty line (roughly $2,500 per person), the VAT would still raise an additional $247 billion per year. If the UBI were cut in half, the VAT would generate an additional $545 billion per year.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"value-added-tax","name":"Value-Added Tax","id":"113762711"},{"slug":"taxes","name":"Taxes","id":"49378929"},{"slug":"program-costs","name":"Program Costs","id":"101097300"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"}],"title":"A 10% value-added tax in 2020 is estimated to have potentially raised $842 billion, rising to an average of $1 trillion in annual revenue over the following decade."},{"id":"101707118","slug":"childhood-poverty-in-the-us-is-estimated-to-cost-usd500-billion-per-year-or-4-of","sources":[{"slug":"the-economic-costs-of-childhood-poverty-in-the-us"}],"lede":"The paper arrives at the estimate by first reviewing the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and health later in life. Next, they review the cost estimates of crime and poor health on the economy. Finally, they aggregate these costs per poor child across the US, and obtain their estimates fot he costs of conditions associated with childhood poverty in the US.","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Childhood poverty in the US is estimated to cost $500 billion per year, or 4% of GDP."},{"id":"101707102","slug":"childhood-poverty-in-the-us-is-estimated-to-reduce-productivity-and-output-by-an","sources":[{"slug":"the-economic-costs-of-childhood-poverty-in-the-us"}],"lede":"The paper arrives at the estimate by first reviewing the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and health later in life. Next, they review the cost estimates of crime and poor health on the economy. Finally, they aggregate these costs per poor child across the US, and obtain their estimates fot he costs of conditions associated with childhood poverty in the US.","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"productivity","name":"Productivity","id":"69648335"}],"title":"Childhood poverty in the US is estimated to reduce productivity and output by an amount equal to 1.3% of GDP."},{"id":"101707084","slug":"childhood-poverty-is-estimated-to-raise-the-costs-of-crime-by-1-3-of-gdp","sources":[{"slug":"the-economic-costs-of-childhood-poverty-in-the-us"}],"lede":"The paper arrives at the estimate by first reviewing the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and health later in life. Next, they review the cost estimates of crime and poor health on the economy. Finally, they aggregate these costs per poor child across the US, and obtain their estimates fot he costs of conditions associated with childhood poverty in the US.","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"social-costs-of-poverty","name":"Social Costs of Poverty","id":"101706853"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Childhood poverty is estimated to raise the costs of crime by 1.3% of GDP."},{"id":"101706854","slug":"childhood-poverty-is-estimated-to-raise-health-expenditure-by-1-2-of-gdp","sources":[{"slug":"the-economic-costs-of-childhood-poverty-in-the-us"}],"lede":"The paper arrives at the estimate by first reviewing the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and health later in life. Next, they review the cost estimates of crime and poor health on the economy. Finally, they aggregate these costs per poor child across the US, and obtain their estimates fot he costs of conditions associated with childhood poverty in the US.","tags":[{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"health","name":"Health","id":"101706852"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"social-costs-of-poverty","name":"Social Costs of Poverty","id":"101706853"}],"title":"Childhood poverty is estimated to raise health expenditure by 1.2% of GDP."},{"id":"121524310","slug":"universal-and-targeted-programs-after-accounting-for-financing-can-achieve-identi","sources":[{"slug":"jain-family-institute-position-on-guaranteed-income"}],"lede":"\"When discussing a universal cash assistance program like Andrew Yang’s Freedom Dividend, one often hears, “Why\\should Bill Gates get $1,000 per/month? Give it to the needy!” But this sentiment, commonly expressed, is near-sighted in focusing solely on the benefit and not its financing. A universal program does not imply that the rich or even the middle class receive a net transfer once taxes are taken into consideration.\"","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"}],"title":"Universal and targeted programs, after accounting for financing, can achieve identical distributional outcomes."},{"id":"117694344","slug":"the-more-inclusive-welfare-programs-are-the-more-political-support-they-generate","sources":[{"slug":"policy-feedback-and-support-for-the-welfare-state"}],"lede":"Broadly, this paper suggests that the construction of the welfare state is not just a result of public attitudes, but that those attitudes are also shaped by the institutional design of the welfare state. Universal programs build broader support.","tags":[{"slug":"universalism","name":"Universalism","id":"101707811"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"The more inclusive welfare programs are, the more political support they generate."},{"id":"113523589","slug":"a-one-unit-increase-in-universalism-is-associated-with-a-4-8-point-increase-in-re","sources":[{"slug":"the-case-for-welfare-state-universalism"}],"lede":"\"Coefficients in Model 1 show that a one-unit increase in universalism is associated with a 4.8 point increase in redistribution, which is roughly the difference in redistribution between the United States and Canada in the mid-2000s. In fact, going from the lowest level of universalism to the highest is associated with a 17.45 points increase in redistribution.10 Seventeen points in redistribution is equivalent to the difference between the redistributive effect of the Norwegian and the US welfare states. A one-unit increase in universalism is also associated with a larger redistributive budget, increasing public social expenditures as a proportion of GDP by 2.8 percentage points. Similarly, strong effects across countries exist for poverty reduction and inequality levels.\"","tags":[{"slug":"universalism","name":"Universalism","id":"101707811"},{"slug":"redistribution","name":"Redistribution","id":"74016537"},{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"A one unit increase in universalism is associated with a 4.8 point increase in redistribution."},{"id":"118609872","slug":"the-level-of-taxation-required-to-fund-a-ubi-is-roughly-double-the-amount-for-an","sources":[{"slug":"the-relative-costs-of-a-ubi-and-a-nit"}],"lede":"\"Second, after taking into account the reductions in conventional transfer payments a BIG would permit, the increase in government expenditures required to fund the NIT modeled in this paper would have been approximately $826 billion in 2002, compared to the $1.69 trillion increase required to fund an equivalent UBI.\"","tags":[{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"The level of taxation required to fund a UBI is roughly double the amount for an equivalent NIT."},{"id":"118609868","slug":"it-s-unclear-that-a-basic-income-guarantee-is-the-best-use-of-society-s-redistrib","sources":[{"slug":"the-relative-costs-of-a-ubi-and-a-nit"}],"lede":"\"...In other words, the possible work-disincentive effects of a BIG are important, not only for determining the maximum BIG a society can sustain over time, but also because they underscore the fact that a society’s ability to redistribute income may have economic as well as political limits. Funding a social welfare benefit as costly as a UBI (or an equivalent NIT) could impose significant opportunity costs on society – preventing it from funding other equally or more important social welfare benefits.\"","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"efficiency","name":"Efficiency","id":"72743745"}],"title":"It's unclear that a basic income guarantee is the best use of society's redistributive capacity."},{"id":"100746900","slug":"results-from-us-nit-experiments-in-the-1970-s-overestimated-labor-supply-effects","sources":[{"slug":"systematic-misreporting-and-effects-of-income-maintenance-experiments-on-work-eff"},{"slug":"underreporting-and-experimental-effects-on-work-effort-evidence-from-the-gary-inc"}],"lede":"\"The major findings of this paper can be briefly summarized. Estimates computed with interview data collected during the SIME/DIME experiment indicate that husbands, wives, female family heads, and young nonheads who received the experimental treatment on average reduced their earnings and employment by appreciable amounts. Because the experimental treatment also created incentives to misreport earnings and employment status during interviews, however, we argued that the interview-based estimates can seriously overstate true reductions in work effort\"","tags":[{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"work-incentives","name":"Work Incentives","id":"100746898"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"}],"title":"Results from US NIT experiments in the 1970's overestimated labor supply effects by relying on self-reported estimates."},{"id":"121524328","slug":"the-real-freedom-conception-of-social-justice-justifies-granting-each-citizen-the","sources":[{"slug":"real-freedom-for-all-what-if-anything-can-justify-capitalism"}],"lede":"This conception is advanced by Philippe Van Parijs, who elsewhere suggests that while the highest sustainable UBI is his ideal, it is more realistic to begin with a smaller, partial UBI, and incrementally scale up the payment amount.","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"justice","name":"Justice","id":"121524326"},{"slug":"political-philosophy","name":"Political Philosophy","id":"121524327"}],"title":"The \"real freedom\" conception of social justice justifies granting each citizen the highest sustainable unconditional basic income payment, constrained by two conditions: respect for every individual's formal freedom, and an appropriate level of resources targeted towards the less able."},{"id":"101097248","slug":"a-basic-income-high-enough-to-meet-an-individual-s-basic-needs-would-ensure-that","sources":[{"slug":"the-physical-basis-of-voluntary-trade"}],"lede":"Market economies are premised upon the notion of 'voluntary exchange' - then indivuals are not coerced into accepting trades in the marketplace. But some political philosophers suggest that, without unconditional access to the resources to meet their basic needs, some basis of exchange cannot be considered voluntary.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"labor-power","name":"Labor Power","id":"69609536"}],"title":"A basic income high enough to meet an individual's basic needs would ensure that workers' participation in the labor market is truly voluntary."},{"id":"101097117","slug":"there-is-a-lack-of-research-into-the-optimal-amount-of-guaranteed-income","sources":[{"slug":"reweaving-the-safety-net-the-best-fit-for-guaranteed-income"}],"lede":"\"...for a given budget constraint, each dollar disbursed on a guaranteed income is one not spent on other necessary programs, so it is reasonable to ask about cost-effectiveness: what is the optimal benefit amount from a cost-benefit perspective? At what point ($3600/year? $7200/year? $12,000/year?) do decreasing marginal impacts per dollar disbursed suggest that the money may be better spent elsewhere? Here again, evidence is limited as there are few studies that directly compare the impacts of different transfer amounts.\"","tags":[{"slug":"future-research","name":"Future Research","id":"100833586"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"There is a lack of research into the optimal amount of guaranteed income."},{"id":"100414989","slug":"there-isn-t-enough-evidence-on-frequency-of-payments-to-determine-the-right-strat","sources":[{"slug":"jain-family-institute-position-on-guaranteed-income"}],"lede":"\"It is not yet clear whether Guaranteed Income should be disbursed in small, regular payments. Given the harmful effects of income shortfalls and the prevalence of income volatility among working and lower middle class households, one might think small, regular payments are preferable. We believe, however, that evidence on the impact of disbursement frequency could be stronger and that further research on this topic would be beneficial. In fact, the program design for the Compton Pledge guaranteed income pilot that JFI assisted on includes an experimental analysis of how differing disbursement frequencies shape consumption, savings, and material well-being. It is reasonable to expect that some recipients would benefit from less frequent lump sum payments and, if so, we should consider the feasibility of offering a choice. We look forward to revisiting this topic when the results become available.\"","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"There isn't enough evidence on frequency of payments to determine the right strategy for basic income."},{"id":"116254496","slug":"relative-to-annual-payments-more-frequent-periodic-payments-of-the-eitc-indicates","sources":[{"slug":"reweaving-the-safety-net-the-best-fit-for-guaranteed-income"}],"lede":"\"Evidence from the U.S. Earned Income Tax Credit program (EITC) may shed light on frequency’s impact in high-income economies. EITC recipient households often have limited access to liquidity, such that even a short delay in income payments leads to notable changes in spending. Studies of EITC spending find that recipients allocate most of this income to savings, debt repayments, vehicle purchases, transportation, education investment, and housing. Evidence from the Chicago EITC Periodic Payment Pilot indicates that periodic payments reduce perceived financial stress, diminish debt accumulation and late fees, and improve mental health. This indicates that credit and savings constraints exist in developed country contexts as well, and deserve more study.\"","tags":[{"slug":"mental-health","name":"Mental health","id":"23916384"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"earned-income-tax-credit","name":"Earned Income Tax Credit","id":"100746766"}],"title":"Relative to annual payments, more frequent, periodic payments of the EITC indicates that periodic payments reduce perceived financial stress, diminish debt accumulation and late fees, and improve mental health."},{"id":"116254509","slug":"evidence-from-kenya-suggests-frequency-of-cash-transfers-matter-more-frequent-pay","sources":[{"slug":"reweaving-the-safety-net-the-best-fit-for-guaranteed-income"}],"lede":"Referencing Johannes Haushofer and Jeremy Shapiro's study,“The Short-term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya”.","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Evidence from Kenya suggests frequency of cash transfers matter. More frequent payments are likely to improve consumption smoothing, while less frequent payments are likely to be spent on large assets."}]}},{"id":"74233750","slug":"land-value-tax","title":"Land Value Tax","publishedStatus":"featured","datePublished":null,"_updatedAt":"2023-02-24T19:08:48-05:00","heroLede":"It takes a community to raise land values, but standard property taxes deliver the benefits to private owners of land, reward land speculation that undermines development, and worsen the urban housing shortage.","heroImage":{"id":"46451560","url":"https://www.datocms-assets.com/42525/1651189536-land-valuation-tax-hero.jpg","alt":null,"title":null,"responsiveImage":{"src":"https://www.datocms-assets.com/42525/1651189536-land-valuation-tax-hero.jpg?auto=format&q=40&w=2500","alt":null,"aspectRatio":1.9921874999999998,"base64":"data:image/jpeg;base64,/9j/4AAQSkZJRgABAQAAAQABAAD/2wCEAAoHBwgHBgoICAgLCgoLDhgOGBMNDh0QDhQQFxMaGCIVFhUdLzcjJh0oHRUWJDUlKC0vMjIyGSI4PTcwPCsxMi8BCgsLDg0OHBAQHDsoIigvLzsvLzsvLy8vNTs7Oy87Oy8vNS8vLy8vLy87Oy8vLy8vLy81Ly8vLy81NS8vLy8vL//AABEIAA0AGAMBIgACEQEDEQH/xAAYAAACAwAAAAAAAAAAAAAAAAAABwMGCP/EACMQAAEEAAQHAAAAAAAAAAAAAAEAAgMEBQYRkRIUIjFRcYH/xAAXAQADAQAAAAAAAAAAAAAAAAACAwQB/8QAGxEAAQQDAAAAAAAAAAAAAAAAAwABAiERMVH/2gAMAwEAAhEDEQA/AGLJmimxvCZG7qU5mpMgDi8brOt/Hb3MNAlOntWStesTYc0uee3lDIb52qIBpOY5nw98GrpAPqEkb1yeOr0yHdC1hv1IkO1//9k=","bgColor":"#eb372c","height":1254,"width":2500}},"heroImageUsesCodedBackground":null,"stContent":{"value":{"schema":"dast","document":{"type":"root","children":[{"type":"heading","level":2,"children":[{"type":"span","value":"What Is Land Value Tax?"}]},{"item":"121794900","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"As communities grow, the structure of property taxes create incentives towards particular kinds of development and away from others. Standard property taxes are levied most heavily on the value of buildings and other human-made improvements that sit upon land, rather than the value of land itself."}]},{"type":"paragraph","children":[{"type":"span","value":"This feeds two pernicious dynamics. First, it encourages speculative practices. Land owners may buy valuable land and keep it vacant, avoiding higher taxes by delaying any form of development, ultimately seeking to sell the land off at a higher price down the road. Land speculation withholds land from more productive uses, such as building housing or businesses that would benefit the community. It also forces further development to leap-frog speculatively held land and build outwards. This drives suburban sprawl that creates longer commutes and more congestion, consumes productive farmland and natural forests, and increases greenhouse gas emissions."}]},{"type":"paragraph","children":[{"type":"span","value":"The second dynamic standard property taxes create is the private capture of collectively produced value, sapping away resources from further economic growth. Thriving urban areas generate immense value, but that value gets absorbed into rising land prices (and ultimately, rents) that benefit landowners, rather than cycling back into communities to feed a virtuous cycle of growth."}]},{"type":"paragraph","children":[{"type":"span","value":"Private income generated from rising values on privately owned land has therefore been called “inefficient,” “rent-seeking,” “monopolistic,” “parasitic,” and even “the root of all inequality.” As a result, economists of all stripes — from classical economists like Adam Smith and Henry George, to modern ones like Milton Friedman and Joseph Stiglitz — agree that of all things to tax, land is best."}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"A land value tax (LVT) is a shift in the burden of property taxation. Rather than taxing the combined value of land, buildings, and improvements at one tax rate, it shifts the tax towards higher rates on the underlying value of the land itself."}]},{"type":"paragraph","children":[{"type":"span","value":"Few other ideas in economic history have more bipartisan support in theory, with so little uptake in practice. Proponents argue that shifting the burden of property taxation towards land values would incentivize more productive uses of land, discouraging speculation while encouraging development."}]},{"type":"paragraph","children":[{"type":"span","value":"Beyond immediate benefits — such as greater housing supply at lower costs, stronger business activity, and more resources cycling through communities — discouraging land speculation could have important long run effects. As speculators sell their land in response to higher taxes, the supply of urban land would rise and prices would fall, supporting further development."}]},{"type":"paragraph","children":[{"type":"span","value":"The reasons LVT is so scarcely taken up appear to be largely administrative. Measuring the value of land — separate from the value of buildings and improvements — requires strong land valuation practices, teams of assessors, and high-quality data. Now that improvements in statistical methods are making valuation easier, might it finally be time to consider LVT?"}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Proposals differ on:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Whether to shift the full property tax burden onto land alone, or have a “split-rate tax” where land is taxed at a higher right while capital and improvements are taxed at a lower rate."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"What tax rate should be placed on land value."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Whether an LVT should replace any other taxes, and if so, which."}]}]}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Depending on its design, advocates argue that an LVT could:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"More equitably distribute value created by rising land values."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Discourage land speculation."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Encourage urban development while reducing sprawl."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Provide a more efficient source of municipal tax revenue than any other tax."}]}]}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Skeptics argue that LVTs:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Would be too difficult to administer in practice, especially where valuing and revaluing land is concerned."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Would fail due to complexity and confusion from such a change in property tax procedures."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Would cause overdevelopment."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Would create inefficiency by biasing land-use decisions."}]}]}]},{"type":"paragraph","children":[{"type":"span","value":"What does the evidence say?"}]},{"type":"heading","level":2,"children":[{"type":"span","value":"Effects of Land Value Tax on Growth"}]},{"item":"121794901","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","marks":["strong"],"value":"Economists across the spectrum agree that the present system of property taxation, with low tax rates on land value that allow property owners to capture most of the value of rising land prices, keeps the US economy from being as prosperous as it might be with higher land taxation."}]},{"type":"paragraph","children":[{"type":"span","value":"In general, increases in "},{"item":"121697135","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"land values come from three sources"}]},{"type":"span","value":": the combination of land productivity and scarcity, the growth of adjacent communities, and the provision of public services. When tax rates on land are low, property owners privately capture a large share of these collectively produced increases in land value."}]},{"type":"paragraph","children":[{"type":"span","value":"LVT advocates argue that value created by nature, public services, or the growth of communities should be shared by all, and not captured by property owners alone. The higher the rate of land taxation, the greater the proportion of the value created by the community that goes back to the public."}]},{"type":"paragraph","children":[{"type":"span","value":"In 1990, a group of 30 economists, including four Nobel laureates (Franco Modigliani, Robert Solow, James Tobin, and William Vickrey), sent an open letter to Mikhail Gorbachev, "},{"item":"121668987","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"urging the young Soviet capitalist economy of the “danger” in following the Western developed countries in allowing land rents to be privately collected."}]}]},{"type":"paragraph","children":[{"type":"span","value":"The letter advocated instead for land value taxation — or the “social collection of land rents” — as a stable basis for supporting the new economy."}]},{"type":"paragraph","children":[{"type":"span","value":"Support for land value taxation bridges political divides. "},{"item":"121670340","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Milton Friedman famously called LVT the “least bad tax” because the fixed supply of land means that taxes on land don’t create deadweight loss"}]},{"type":"span","value":". Usually, raising taxes on the supply of a good or service will discourage production. But since land is fixed, higher taxes do not cause any distortion."}]},{"type":"paragraph","children":[{"type":"span","value":"But ideas for how LVT revenues should be used do differ across political perspectives. LVT revenues could replace other tax revenues, reducing or eliminating taxes on both labor and capital. They could be used to offset the costs of large, existing public programs, such as "},{"item":"121669970","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Medicaid or Social Security"}]},{"type":"span","value":". Or, they could fund additional public programs, such as "},{"item":"121740898","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"public transportation"}]},{"type":"span","value":" or "},{"item":"121669956","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"basic income"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Econometric models predict that replacing some portion of existing taxes with land value taxation would increase GDP (and social welfare)."}]},{"type":"paragraph","children":[{"type":"span","value":"Some advocates see LVT as a potential source of additional public revenue to be added on top of existing taxes. But even revenue-neutral strategies that simply replace existing taxes with higher land tax rates, raising the same amount of revenue, "},{"item":"121693648","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"are predicted to benefit the economy"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"One revenue-neutral model of the overall US economy finds that raising the tax rate on land by 5%, and reducing taxes on capital and labor by 28% and 10% respectively, "},{"item":"121670443","type":"itemLink","children":[{"type":"span","value":"would increase economic output by 15% and social welfare by 3.4%"}]},{"type":"span","value":". Going further to replace all "},{"item":"121669928","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"current taxes with a 20% LVT and a 12.2% consumption tax would maintain current levels of government revenue while raising economic output by 26% and social welfare by 5.2%"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"A revenue-neutral model of the New York City economy that swaps out all its taxes for an equivalent 21.7% LVT is simulated to increase"},{"item":"99017964","type":"itemLink","children":[{"type":"span","value":" output by 91% and wages by 4%, while decreasing poverty by 34% and land prices by 28%"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Another revenue-neutral simulation that replaces New Hampshire’s statewide property tax with an LVT yielding the same revenue "},{"item":"121742486","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"is projected to raise economic output by 0.36% and employment by 0.35%"}]},{"type":"span","value":", with these effects expected "},{"item":"121742469","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"to persist in the long term"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"LVTs would reduce the incentive for land speculation."}]},{"type":"paragraph","children":[{"type":"span","value":"Land speculation is an investment strategy where vacant land is bought and held, with no building or development, in the belief that surrounding land values will rise, raising the value of the vacant land, which can later be sold off at a profit. Doing so benefits the landowner while withholding land from development that might benefit the community."}]},{"type":"paragraph","children":[{"type":"span","value":"Raising the tax rate on land value would make it more costly to hold vacant land. "},{"item":"121670331","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"This would the incentive to speculate"}]},{"type":"span","value":" without making improvements that generate revenue to offset the taxes."}]},{"type":"paragraph","children":[{"type":"span","value":"This projection bears out in both real-world experience and model simulations. When land tax rates were raised in Harrisburg, Pennsylvania, the number of "},{"item":"121817860","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"vacant lots dropped by 80%"}]},{"type":"span","value":". Similarly, the raising of land tax rates in an Australian province "},{"item":"141646198","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"led to a decrease in speculation"}]},{"type":"span","value":". Along the same lines, simulations for Multnomah County, Oregon, which includes the Portland metropolitan area, suggest that "},{"item":"121670328","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"implementing an LVT would reduce land speculation by raising holding costs"}]},{"type":"span","value":"."}]},{"item":"121794902","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Land value taxation promotes city growth while reducing urban sprawl. But urban development is not without costs, and LVTs may not always be the best tools for promoting development."}]},{"type":"paragraph","children":[{"type":"span","value":"LVTs incentivize "},{"item":"121721084","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"compact city growth"}]},{"type":"span","value":" by "},{"item":"121721055","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"incentivizing new developments on and around existing developments"}]},{"type":"span","value":", which restrains growth from consuming more land. "},{"item":"121744528","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"78% of Americans favor the mitigation of such “urban sprawl”"}]},{"type":"span","value":" in land use planning."}]},{"type":"paragraph","children":[{"type":"span","value":"Evidence from real-world experiments generally supports the assertion that LVTs promote urban development. In Pennsylvania, cities that adopted split-rate LVTs (the form of LVT where tax rates on land are raised while those on capital improvements are lowered, but not eliminated) "},{"item":"121742368","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"saw higher levels of construction activity than they would have had they stayed with single-rate property taxes"}]},{"type":"span","value":". Similarly, split-rate taxation is "},{"item":"121744879","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"shown to increase the number of building permits awarded"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In Pittsburgh, shifting toward higher land taxation led to a "},{"item":"121744913","type":"itemLink","children":[{"type":"span","value":"70.4% increase in average annual building permit values. Over the same period, 15 other Eastern cities experienced a 14.4% decrease."}]},{"type":"span","value":" The Pittsburgh "},{"item":"121725301","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"city council president stated"}]},{"type":"span","value":": “I’m not going to say the land tax is the only reason a second renaissance occurred, but it’s been a big help.”"}]},{"type":"paragraph","children":[{"type":"span","value":"Econometric simulations for both "},{"item":"121670328","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Oregon"}]},{"type":"span","value":" and "},{"item":"99017964","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"New York City"}]},{"type":"span","value":" also predict that land value taxation would promote development and spur growth."}]},{"type":"paragraph","children":[{"type":"span","value":"Depending on context, however"},{"item":"121742411","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" land value taxation may not always be a good tool for encouraging development of vacant land, especially in developing countries"}]},{"type":"span","value":". Land value taxation is most effective where there is viable, underdeveloped land."},{"item":"121670318","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" In cases where there is little viable land available, however, land value taxation may not be helpful"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In some contexts, land value taxation may prove undesirable. Rapid land development is associated with "},{"item":"121721135","type":"itemLink","children":[{"type":"span","value":"loss of farmland and open space, higher costs of infrastructure, roadway congestion, and poverty"}]},{"type":"span","value":". Land value taxation may also cause over-development. For example, in the 1970s, "},{"item":"121693882","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Hawaii abandoned its land value taxation because it was seen as a cause of overdevelopment in Waikiki"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Land value taxation is highly efficient. Taxing land does not distort its supply in the same way that taxing other goods distorts supply, because the supply of land is fixed. Or, as Milton Friedman put it, land value tax is the “least bad tax.”"}]},{"type":"paragraph","children":[{"type":"span","value":"Standard economic theory suggests that, when you tax something, supply decreases (since the higher taxes make it more expensive to produce and sell). But because the supply of land is fixed, taxes cannot distort its supply. As a result, land taxes are the most efficient taxes possible."}]},{"type":"paragraph","children":[{"type":"span","value":"Even "},{"item":"121742418","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Adam Smith, writing in the 1700s, supported taxing land values"}]},{"type":"span","value":". Smith asserted that taxing unimproved land—what he called “ground rent”—would not harm economic activity, would not raise land rents, and "},{"item":"99026318","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"would place tax burdens on landowners, who, by definition, monopolize the land"}]},{"type":"span","value":"."}]},{"item":"121794903","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Nonetheless, in theory, there might be certain efficiency concerns surrounding land value taxation. Taxing land values "},{"item":"121744520","type":"itemLink","children":[{"type":"span","value":"may bias choices between earlier and later development of land"}]},{"type":"span","value":" in favor of projects that promise earlier revenues to offset the higher taxes. This bias may result in more economically efficient choices being pushed aside to prioritize earlier revenues, leading to less efficient decision-making in land development overall."}]},{"type":"paragraph","children":[{"type":"span","value":"In practice, Pittsburgh’s experience suggests that land value taxation offers a unique strategy for municipalities to r"},{"item":"121742552","type":"itemLink","children":[{"type":"span","value":"aise revenue without resorting to other taxes"}]},{"type":"span","value":" that may be more likely to distort business decisions."}]},{"type":"paragraph","children":[{"type":"span","value":"Evidence from a large natural experiment in Denmark also finds that "},{"item":"121670388","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"taxing land doesn’t distort economic decisions"}]},{"type":"span","value":", as the tax is fully capitalized into land prices and does not affect user costs of land."}]},{"item":"121794904","type":"block"},{"type":"heading","level":2,"children":[{"type":"span","value":"Effects of Land Value Tax on Stability"}]},{"item":"121794905","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Rising housing prices are like a sponge that soaks up a significant portion of the gains from economic progress (as economic activity drives up land values), rewarding the private owners of land with unearned income. Land value taxation would return much of this unearned income back to the public who generates it—like wringing the sponge—reducing inequality while improving efficiency."}]},{"type":"paragraph","children":[{"type":"span","value":"One way to look at inequality is to see how much of the overall national income goes towards laborers (in the form of wages, salaries, and benefits), compared with how much goes towards capital owners (in the form of profits, dividends, and rental income). In recent decades, capital’s share of national income has been rising, while labor’s has declined."}]},{"type":"paragraph","children":[{"item":"121740941","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Recent research suggests that the rise in capital’s share is driven entirely by increasing returns on housing"}]},{"type":"span","value":". In other words, by private capturing of increases in land values."}]},{"type":"paragraph","children":[{"type":"span","value":"By charging higher land rents, property owners "},{"item":"121740756","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"privately capture a significant portion of collectively generated economic gains"}]},{"type":"span","value":". This "},{"item":"99026318","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"reduces economic efficiency because it exercises monopoly power"}]},{"type":"span","value":". It also increases inequality by granting unearned income to the already wealthy."}]},{"type":"paragraph","children":[{"type":"span","value":"The implementation of LVTs, especially if the revenues were used for public benefit, would divert this captured value from property owners back to the public. "},{"item":"121740748","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Doing so could simultaneously reduce inequality while improving economic efficiency."}]}]},{"item":"121794906","type":"block"},{"item":"146558561","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Land value taxation helps to ensure that those responsible for raising land values share in its financial rewards. It redistributes financial rewards from landowners to communities, and progressively shifts the tax burden onto wealthier landowners and city districts that benefit from these rising land values in the first place."}]},{"type":"paragraph","children":[{"type":"span","value":"LVTs redistribute the unearned gains captured by landlords "},{"item":"99019851","type":"itemLink","children":[{"type":"span","value":"back to the communities and governments whose activities were largely responsible"}]},{"type":"span","value":" for driving land prices up in the first place."}]},{"type":"paragraph","children":[{"type":"span","value":"They also shift the burden of taxation onto those parts of a city that benefit most from community investments. Such investments range from public sector provisions like transportation and safety to private sector supports like job centers. "},{"item":"121720948","type":"itemLink","children":[{"type":"span","value":"By shifting tax burdens onto those parts of a city, those who benefit the most from such community investments also contribute more to those investments"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In general, land value taxation makes the overall burden of taxation more progressive. In Oregon, "},{"item":"121693918","type":"itemLink","children":[{"type":"span","value":"a simulation predicts"}]},{"type":"span","value":" that implementing a 90/10 LVT (90% tax on land value, 10% on capital improvements) would shift the overall tax burden in Multnomah County from regressive to mildly progressive."}]},{"type":"paragraph","children":[{"type":"span","value":"In a simulation for a Texas municipality, replacing the uniform property tax with an LVT would similarly "},{"item":"121744561","type":"itemLink","children":[{"type":"span","value":"shift the overall burden of taxation from regressive to mildly progressive"}]},{"type":"span","value":". Specifically, the burden would "},{"item":"121744811","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"shift from single-family residential homes to the commercial and industrial property classes"}]},{"type":"span","value":". Over a 10-year period, the LVT would decrease taxes for 85.5% of residential homeowners, and the average single-family property would experience a "},{"item":"121744798","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"tax liability decrease of about 30%"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Actual implementation of an LVT in Pennsylvania showed that "},{"item":"121744920","type":"itemLink","children":[{"type":"span","value":"85% of homeowners paid less under split-rate land value taxation"}]},{"type":"span","value":" than they did under uniform property taxation."}]},{"type":"paragraph","children":[{"type":"span","value":"There are important "},{"item":"121693914","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"exceptions to these trends"}]},{"type":"span","value":", however, and land value taxation does not always make the tax burden more progressive. In some cases, where "},{"item":"121744783","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"some of the least wealthy may be most likely to face tax increases"}]},{"type":"span","value":". These may include farmers who have large plots of land with little development, or more broadly, "},{"item":"121693893","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"people who are “land rich but income poor"}]},{"type":"span","value":".” Strategies for mitigating such cases are discussed in the Implementation section."}]},{"type":"paragraph","children":[{"type":"span","value":"Meanwhile, a study of land value taxation in the UK finds that the tax alone may have a mildly regressive effect, "},{"url":"/e636cafb4e724816a6c1c4dd7f4838c2","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"increasing the Gini inequality index by 0.08%"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Land value taxation can be made more progressive by using the revenue it raises to finance public programs such as citizen’s dividends, basic income, or public services like transportation."}]},{"type":"paragraph","children":[{"type":"span","value":"To ensure that land value taxation would have a a progressive, equitable outcome that benefits the least well-off, the revenue raised from LVT can be used to fund universal dividends or other public programs."}]},{"type":"paragraph","children":[{"type":"span","value":"Conservative estimates of a full LVT (100% tax rate applied to land value) applied across the entire US indicate that its revenues would be enough to provide "},{"item":"121669956","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"provide every adult citizen with a citizen’s dividend, or universal basic income (UBI), of roughly $5,750 per year"}]},{"type":"span","value":". This would be a "},{"item":"121669955","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"financial net benefit to all two-adult households holding property valued at up to $500,000"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In the UK, a 1% "},{"item":"121740809","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"LVT on its own—i.e., without using the revenues to fund additional public programs—would be mildly regressive"}]},{"type":"span","value":", raising inequality by 0.08%. But using the increased revenue to fund a UBI would provide a "},{"item":"121740819","type":"itemLink","children":[{"type":"span","value":"universal payment of £64 per month, reducing poverty by 20% and providing a net benefit to 70%"}]},{"type":"span","value":" of the population."}]},{"type":"paragraph","children":[{"type":"span","value":"A case study of Chicago concluded that"},{"item":"121740898","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" land value taxation would be a viable way to finance mass public transportation"}]},{"type":"span","value":", while placing the burden of taxation on city areas that benefit most from such public services."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"According to both theory and real-world evidence, landlords would not be able to pass the increased tax burden of higher LVTs onto tenants in the form of higher rents."}]},{"type":"paragraph","children":[{"type":"span","value":"A common concern with raising taxes on land is that landlords will simply charge tenants higher rents to compensate. But both theory and practice with LVTs find otherwise, alleviating this concern."}]},{"type":"paragraph","children":[{"type":"span","value":"With an LVT, the more rent a landlord charges, the more taxes they pay. Because land values are commonly assessed based on the rent that property owners can charge, raising rents causes land values to rise, increasing the landowner’s total tax liability."}]},{"type":"paragraph","children":[{"type":"span","value":"In theory, however, some passing of higher tax burdens onto tenants might still occur in places where the updating of land valuation lags behind changes in rent, or where not all land would be covered under the LVT."}]},{"type":"paragraph","children":[{"type":"span","value":"Nevertheless, an extensive and growing body of research finds that land rent taxes are fully “capitalized” into land and property prices (meaning the higher tax burden is incorporated into land prices), rather than passed onto tenants as increased rent. The largest real-world experiment took place in Denmark in 2007, where a variety of land tax rates were changed overnight. "},{"item":"121670396","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"The resulting increases in land tax owed by landlords were fully capitalized into land prices, rather than passed onto tenants"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"A "},{"item":"121693693","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"study of 675 German municipalities finds the same - land taxes are absorbed into land values, rather than rent "}]},{"type":"span","value":"rates."}]},{"type":"paragraph","children":[{"type":"span","value":"In an Australian territory, "},{"item":"141648123","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"raising LVT rates saved the typical new home buyer between $1,000 and $2,200 on mortgage payments"}]},{"type":"span","value":"."}]},{"type":"heading","level":2,"children":[{"type":"span","value":"Implementation"}]},{"item":"121794907","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Despite high theoretical appeal and some real-world success stories, land value taxation is seldom implemented. Difficulties with the valuation and revaluation of land and educating taxpayers, along with patchwork data collection practices and general bureaucratic friction, have all contributed to obstructing implementation."}]},{"type":"paragraph","children":[{"type":"span","value":"A successful LVT depends on the administrative capacity to assess the value of land separate from the value of any buildings or improvements on the land. As it turns out, this is rather difficult to do when existing data collection practices have not been designed for it. These administrative obstacles, plus political factors, have "},{"item":"121725306","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"generally been sufficient to discourage the implementation of land value taxation"}]},{"type":"span","value":" despite its strong theoretical appeal."}]},{"type":"paragraph","children":[{"type":"span","value":"Various forms of land value taxation either were or currently are practiced in parts of Denmark, Australia, Estonia, Pennsylvania, Hong Kong, Hungary, Kenya, Mexico, Namibia, Singapore, South Korea, Taiwan, and Thailand."}]},{"item":"121794908","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"In Altoona, Pennsylvania, an LVT was "},{"item":"121721009","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"implemented for a number of years in the 2000s and 2010s, but ultimately abandoned"}]},{"type":"span","value":" due to ineffectiveness and general confusion. In Pittsburgh, a"},{"item":"121693863","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" nearly century-long practice of split-rate land value taxation was repealed due to poor assessment practices"}]},{"type":"span","value":", despite evidence that it encouraged building activity."}]},{"type":"paragraph","children":[{"type":"span","value":"In Minnesota, county and city assessors are skeptical of transitioning to even a moderate form of land value taxation. "},{"item":"121725307","type":"itemLink","children":[{"type":"span","value":"Only 9% believed land value taxation was an idea worth pursuing, and 40% strongly opposed"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In Australia, inconsistency and lack of transparency in land valuation methods has "},{"item":"121725261","type":"itemLink","children":[{"type":"span","value":"led to their LVT to becoming one of the more disliked and least understood taxes"}]},{"type":"span","value":"."}]},{"item":"121794909","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"As such, a case study for implementing land value taxation "},{"item":"121697153","type":"itemLink","children":[{"type":"span","value":"in Washington DC comments"}]},{"type":"span","value":" that any reallocation of valuation between land and improvements would require resources to be earmarked for taxpayer education."}]},{"type":"paragraph","children":[{"type":"span","value":"But perhaps the one of the most well-credentialed assessments of the administrative barriers to implementing land value taxation comes from the above-mentioned open letter to Mikhail Gorbachev. Written in 1990, well before we had the statistical methods and digitized data practices we have today (which offer new, simpler ways of assessing land value), the group of 30 economists, including four Nobel Laureates,"},{"item":"121697133","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" noted the technical issues impeding land value taxation, and wrote"}]},{"type":"span","value":": ”While these issues need to be addressed, none of them present any insoluble problems.”"}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Measuring the value of land by itself, separate from buildings and improvements, is difficult and prone to measurement error, but far from insurmountable. New statistical methods of land appraisal may ease these burdens."}]},{"type":"paragraph","children":[{"type":"span","value":"Land valuation is tricky, and increasing the tax burden on land would increase the importance of land valuation practices."}]},{"type":"paragraph","children":[{"type":"span","value":"Current methods for distinguishing land value from property value "},{"item":"121744901","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"are prone to error"}]},{"type":"span","value":". But even so, it is important to keep in mind that land value taxes are found, at worst, to "},{"item":"121744897","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"carry distortion effects equivalent to those of current property tax practices"}]},{"type":"span","value":", even when higher ranges of potential error are taken into account. The"},{"item":"121670431","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" majority of complaints today about property value assessments"}]},{"type":"span","value":" take issue with the value of buildings and improvements, not land value."}]},{"type":"paragraph","children":[{"type":"span","value":"There have long been methods of determining land value “by hand,” reaching as far back as a short-lived "},{"item":"121670423","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"LVT implemented by Houston’s first Hispanic mayor, J. J. Pasoriza"}]},{"type":"span","value":", in 1911. But newly developing statistical methods are already found to be "},{"item":"121670421","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"cheaper, faster, and no less accurate than conventional property assessment methods"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"New "},{"item":"121670406","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"methods of land valuation are diverse"}]},{"type":"span","value":", ranging from various forms of regression analysis, to machine learning algorithms and neural networks."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"The implementation of LVTs would be complemented by the repealing of restrictive zoning policies. Restrictive zoning policies inhibit the potential benefits of land value taxation. At the same time, LVTs would raise incentives to repeal such zoning policies, possibly leading more easily to such repeal."}]},{"type":"paragraph","children":[{"type":"span","value":"In areas where zoning laws prevent urban development and densification, "},{"item":"121720981","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"an LVT may have limited effect"}]},{"type":"span","value":". For example, in Washington DC, a primary barrier to residential densification is the "},{"item":"121720930","type":"itemLink","children":[{"type":"span","value":"large number of lots (95,835) zoned for single-family residential housing"}]},{"type":"span","value":", of which 71% face significant zoning barriers to densification."}]},{"type":"paragraph","children":[{"type":"span","value":"If an LVT were in place, its effects on development would be significantly limited by such zoning barriers. But land value taxation raises incentives to maximize land value (which also maximizes the tax base for the city). Because land values are depressed by restrictive zoning practices, the implementation of land value taxation would rase the opportunity cost (i.e., increase the sacrifices) of maintaining such practices. Thus, "},{"item":"121744508","type":"itemLink","children":[{"type":"span","value":"passing an LVT could strengthen the case to repeal restrictive zoning"}]},{"type":"span","value":"; in return, the repealing of restrictive zoning could help realize the full effects of an LVT."}]},{"type":"paragraph","children":[{"type":"span","value":"Additional zoning reforms to complement land value taxation could include "},{"item":"121697145","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"supporting the development of Accessory Dwelling Units and expanding mixed-use zoning"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Although switching to LVTs would be progressive overall, it would place undue tax burdens on certain demographics, such as “land rich, income poor” people and on farms. Strategies to mitigate these burdens include gradual implementation of LVT rates, grandfathering in existing households under previous arrangements until death or until sale of property, exemptions, and direct relief."}]},{"type":"paragraph","children":[{"type":"span","value":"Overall, an LVT"},{"item":"121744811","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" in the US would decrease tax payments"}]},{"type":"span","value":" for "},{"item":"121744920","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"most residential properties"}]},{"type":"span","value":", shifting the "},{"item":"121670328","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"burden onto wealthier landowners"}]},{"type":"span","value":" and the "},{"item":"99018011","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"commercial"}]},{"type":"span","value":" or "},{"item":"121744811","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"industrial property classes"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"There are important exceptions, however, in which an LVT might cause some of "},{"item":"121744783","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"the least wealthy to be most likely to face tax increases"}]},{"type":"span","value":". In particular, “"},{"item":"121693893","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"land rich, income poor” groups"}]},{"type":"span","value":", such as "},{"item":"121693855","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"farmers"}]},{"type":"span","value":" or long-time residents, may face higher tax burdens."}]},{"type":"paragraph","children":[{"type":"span","value":"In most cases, "},{"item":"121670382","type":"itemLink","children":[{"type":"span","value":"these undue tax burdens are one-time scenarios"}]},{"type":"span","value":", experienced only by the owner at the time of the tax change. For future owners, the higher rates are factored into the land’s price."}]},{"type":"paragraph","children":[{"type":"span","value":"These obstacles can be remedied. Strategies to mitigate them include exempting specific types of land (as "},{"item":"121725262","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Estonia does with nature reserves and public water bodies, or Australia does for agriculture"}]},{"type":"span","value":"), grandfathering in "},{"item":"121693852","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"long-term residents until death or until sale of property"}]},{"type":"span","value":", gradually "},{"item":"121669930","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"phasing in the LVT rate rather than allowing it to cause a sudden rate spike, or direct relief"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"LVTs were originally proposed as a “single tax” at a rate of nearly 100% of land value. In practice, however, the high end of recent LVT implementations have only reached 39.6%—in Altoona City, Pennsylvania (where the LVT was later repealed). At the national level, recent estimates suggest that an LVT rate of 5.55% would be politically viable and would increase economic output and social welfare, but a 20% rate would be optimal."}]},{"type":"paragraph","children":[{"type":"span","value":"When first proposed by the American economist Henry George, land value taxation was proposed as a “single tax” at a rate of nearly 100% of land value that would replace all other taxation. "},{"item":"121670341","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"The tax landscape of the 1800s was significantly different from today’s"}]},{"type":"span","value":", however, and the benefits of land value taxation remain even if an LVT would not replace all other taxation."}]},{"type":"paragraph","children":[{"type":"span","value":"A 2019 estimate (using simplified assumptions) projected that a national 100% LVT would raise "},{"item":"121669968","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"anywhere from $1.1 trillion to $3.36 trillion per year"}]},{"type":"span","value":", or between 25% and 76% of total government spending. But in practice, in American cities where LVT has been tried, land value taxation has generally remained revenue-neutral, only raising rates on land high enough to offset decreases in taxes elsewhere."}]},{"type":"paragraph","children":[{"type":"span","value":"In New York City, "},{"item":"99018001","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"one estimate found that a revenue-neutral LVT that replaced all income, property, and corporate taxes would need to be set at 21.6%"}]},{"type":"span","value":" to maintain levels of revenue. Across jurisdictions in Pennsylvania that used split-rate LVTs in 2013, tax rates on land ranged from 0.4% in the Pittsburgh Business District to 36.9% in Altoona City. During Pittsburgh’s use of a split-rate LVT from 1913 to 2001, the tax on land was roughly 5.77 times that on improvements."}]},{"type":"paragraph","children":[{"type":"span","value":"Where a national LVT is concerned, a recent comprehensive study suggests that land value taxation offers a promising path forward for financing current levels of expenditure and debt, while decreasing tax rates on both capital and labor. "},{"item":"121669933","type":"itemLink","children":[{"type":"span","value":"Specifically, it finds"}]},{"type":"span","value":" that the marginal benefits per 1% increase in land tax rates remain large until the rate reaches around 10%, after which the predicted gains in economic output and social welfare taper off."}]},{"type":"paragraph","children":[{"type":"span","value":"Their suggestion for short-term action is to raise the current tax rate on the asset value of land from 0.55% to 5.55%, allowing for a revenue-neutral decrease in taxes on capital by 28% and labor by 10%. Doing so, their model predicts, would raise welfare by 3.4%, and increase output by 15%."}]},{"type":"paragraph","children":[{"type":"span","value":"In the study’s optimal model, all current tax revenue could be replaced "},{"item":"121669928","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"by a 20% land value tax and a 12.2% consumption tax. Doing so would increase social welfare by 5.2% and economic output by 26%"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Land value taxation could come “from above,” as a federal mandate, or “from below,” since any municipality could implement an LVT on their own."}]},{"type":"paragraph","children":[{"type":"span","value":"Globally, LVTs have been implemented as booth local and national policies. "},{"item":"121817892","type":"itemLink","children":[{"type":"span","value":"Denmark"}]},{"type":"span","value":", "},{"item":"121817863","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Finland"}]},{"type":"span","value":", "},{"item":"121817871","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Estonia"}]},{"type":"span","value":", and Taiwan offer examples of national LVTs “from above.” In Taiwan, LVT revenue accounts for 8.4% of total government revenue."}]},{"type":"paragraph","children":[{"type":"span","value":"A strong example of land value taxation “from below” can be found in the US, in Pennsylvania, "},{"item":"121817862","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"where the city of Harrisburg’s experience offers an especially positive example"}]},{"type":"span","value":". After land value taxation was implemented in 1975, Harrisburg’s tax base rose from "},{"item":"121817860","type":"itemLink","children":[{"type":"span","value":"$212 million to $1.6 billion, the number of vacant lots feel by 80%, crime fell by 46%, over 40,000 new building permits were issued"}]},{"type":"span","value":", and the number of residential units significantly increased."}]},{"type":"paragraph","children":[{"type":"span","value":"In contrast, the Pennsylvanian city of Altoona adopted a LVT in 2002, "},{"item":"121721009","type":"itemLink","children":[{"type":"span","value":"but repealed it in 2016"}]},{"type":"span","value":" following general confusion and the LVT’s relative inefficiency."}]},{"type":"paragraph","children":[{"type":"span","value":"With land value taxation, as with all policy design, the details are crucial."}]}]}},"blocks":[{"id":"121794900","variant":"feature","text":"

As flourishing economies drive up the value of land, standard property taxes fail to promote its optimal use, instead transferring most of the financial benefits to private landowners, to the detriment of the wider community. This dynamic worsens the housing crisis and encourages suburban sprawl, all while sapping the strength of the economy.

\n","author":""},{"id":"121794901","sectionSummary":"

Where they’ve been applied, land value taxes generally promote building activity, reduce land speculation, and provide municipalities with an efficient source of funding for public services.

\n\n

Econometric models predict that, if implemented at larger scales, replacing portions of existing taxes with LVT revenue would increase both GDP and social welfare, driven largely by replacing the distortion effects of other taxes.

\n\n

Land value taxation promotes compact city growth, stimulating building activity while reducing urban sprawl. But urban development is not without costs, and LVTs may not always be the best tools for promoting development.

\n"},{"id":"121794902","image":{"id":"46698701","url":"https://www.datocms-assets.com/42525/1653323243-untitled.png","alt":null,"title":null,"responsiveImage":{"src":"https://www.datocms-assets.com/42525/1653323243-untitled.png","alt":null,"aspectRatio":1.4705882352941178,"base64":"data:image/jpeg;base64,/9j/4AAQSkZJRgABAQAAAQABAAD/2wCEAAoHBwgHBgoICBQVEQ0LDg8QDQwNDRYNDREYFxMZGBYVFhUaHysjGh0oHRUWJDUlKC0vMjIyGSI4PTcwPCsxMi8BCgsLBQUFEAUFEC8cFhwvLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vL//AABEIABEAGAMBIgACEQEDEQH/xAAYAAADAQEAAAAAAAAAAAAAAAAABQYEAf/EACEQAAIABgEFAAAAAAAAAAAAAAABAgMEBQYRNRITITI0/8QAFgEBAQEAAAAAAAAAAAAAAAAAAAMC/8QAFBEBAAAAAAAAAAAAAAAAAAAAAP/aAAwDAQACEQMRAD8Aq8alxqgbGT70XhElj+ROXR6GiyPp0yTRpfJ06ltyZwUX+9xVVtWgAjLL8ozi9EAAaKzjUAAB/9k=","bgColor":"#e3dacd","height":544,"width":800}}},{"id":"121794903","variant":"simple","text":"

The appeal of land-value taxation is its basic neutrality: it does not create the adverse fiscal incentives that accompany other revenue measures.

\n","author":"Wallace Oates & Robert Schwab, The Impact of Urban Land Taxation: The Pittsburgh Experience (1997)"},{"id":"121794904","variant":"simple","text":"

Ultimately, land-based property tax systems...do what they are designed to do—place more of the tax burden on wealthier land-owners, and encourage the highest and best use of land…a LVT would provide a more equitable tax structure, incentivize structure upgrading and development of underutilized properties, and discourage “holding” land for speculative purposes. Furthermore, the potential downsides of the tax policy—such as increasing taxes on low-income homeowners—can be mitigated with carefully crafted legislation.

\n","author":"Hulseman, Rovang, Bales, & Nguyen, Land Value Tax Analysis: Simulating the Tax in Multnomah County (2019)"},{"id":"121794905","sectionSummary":"

Rising housing prices capture much of the gains of economic progress, rewarding the private owners of land with unearned income. Land value taxation would return much of this unearned private capture back to the public that generates it, reducing inequality while improving efficiency.

\n\n

Land value taxation helps to ensure that those responsible for raising land values share in its financial rewards. It redistributes financial rewards from landowners to communities, and progressively shifts the tax burden onto wealthier landowners and city districts.

\n\n

Land value taxation can be made even more progressive by using the revenue it raises to finance public programs, such as citizen’s dividends, basic income, or public services like transportation.

\n\n

According to both theory and real-world evidence, landlords would not be able to pass the tax burden of higher LVTs onto tenants in the form of higher rents.

\n"},{"id":"121794906","image":{"id":"49187781","url":"https://www.datocms-assets.com/42525/1676661877-lep-chart-labor-share.png","alt":null,"title":null,"responsiveImage":{"src":"https://www.datocms-assets.com/42525/1676661877-lep-chart-labor-share.png","alt":null,"aspectRatio":1.5523560209424083,"base64":"data:image/png;base64,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","bgColor":"#3aa9d1","height":2292,"width":3558}}},{"id":"146558561","image":{"id":"49187783","url":"https://www.datocms-assets.com/42525/1676661902-lep-chart-capital-share.png","alt":null,"title":"Source: Council of Economic Advisors","responsiveImage":{"src":"https://www.datocms-assets.com/42525/1676661902-lep-chart-capital-share.png","alt":null,"aspectRatio":1.5523560209424083,"base64":"data:image/png;base64,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","bgColor":"#f04e5c","height":2292,"width":3558}}},{"id":"121794907","sectionSummary":"

Despite high theoretical appeal and some real-world success stories, land value taxation is seldom implemented. Difficulties with the valuation and revaluation of land and educating taxpayers, along with patchwork data collection practices and general bureaucratic friction, have all contributed to obstructing implementation.

\n\n

Although measuring the value of land separately from capital improvements is difficult and prone to measurement error, it is far from insurmountable. New statistical methods of land appraisal may ease these burdens.

\n\n

The implementation of LVTs would be complemented by the repealing of restrictive zoning policies. Restrictive zoning policies inhibit the potential benefits of land value taxation. At the same time, LVTs would raise incentives to repeal such zoning policies, possibly making such repeals easier to achieve.

\n\n

Although switching to LVTs would be progressive overall, it would place undue tax burdens on certain demographics, such as ‘land rich, income poor’ people and on farms. Strategies to mitigate these burdens include gradual implementation of LVT rates, grandfathering in existing households under previous arrangements until death or until sale of property, exemptions, and direct relief.

\n\n

LVTs were originally proposed as a “single tax” at a rate of nearly 100% of land value. In practice, however, the high end of rates in recent LVT implementations have only reached 39.6% in Altoona City, Pennsylvania (where the LVT was later repealed). At the national level, recent estimates suggest that an LVT rate of 5.55% would be politically viable and would increase economic output and social welfare, but a 20% rate would be optimal.

\n"},{"id":"121794908","image":{"id":"49187785","url":"https://www.datocms-assets.com/42525/1676661967-lep-chart-lvt-map.png","alt":null,"title":"Source: Dye & England (2009)","responsiveImage":{"src":"https://www.datocms-assets.com/42525/1676661967-lep-chart-lvt-map.png","alt":null,"aspectRatio":1.5523560209424083,"base64":"data:image/png;base64,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","bgColor":"#f7b111","height":2292,"width":3558}}},{"id":"121794909","variant":"simple","text":"

The technical difficulty of how to value unimproved land, while not insurmountable, is considerable and prone to generating confusion and a lack of transparency. There needs to be a good understanding regarding what LVT is and what it is supposed to achieve and sufficient resource put behind the valuation exercise.

\n","author":"Hughes, Sayce, Shepherd, & Wyatt, Implementing a Land Value Tax: Considerations on Moving from Theory to Practice (2020)"}],"links":[{"id":"121697135","slug":"the-value-of-land-arises-from-three-sources-the-fact-that-land-is-both-productive","sources":[{"slug":"open-letter-to-mikhail-gorbachev"}],"lede":"The letter, co-signed by leading economists, states: “The rental value of land arises from three sources. The first is the inherent natural productivity of land, combined with the fact that land is limited. The second source of land value is the growth of communities; the third is the provision of public services. All citizens have equal claims on the component of land value that arises from nature. The component of land value that arises from community growth and provision of services is the most sensible source of revenue for financing public services that raise the rental value of surrounding land. These services include roads, urban transit networks, parks, and public utility networks for such services as electricity, telephones, water and sewers. A public revenue system should strive to collect as much of the rent of land as possible, allocating the part of rent derived from nature to all citizens equally, and the part derived from public services to the governmental units that provide those services.”","tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"The value of land arises from three sources: the fact that land is both productive and limited, the growth of communities, and the provision of public services."},{"id":"121668987","slug":"a-group-of-nobel-laureate-economists-co-signed-an-open-letter-sent-to-gorbachev-i","sources":[{"slug":"does-georgism-work-part-3-can-unimproved-land-value-be-accurately-assessed-separa"},{"slug":"open-letter-to-mikhail-gorbachev"}],"lede":"They write: \"...there is a danger that you will adopt features of our [Western] economies that keep us from being as prosperous as we might be. In particular, there is a danger that you may follow us in allowing most of the rent of land to be collected privately.\n\nIt is important that the rent of land be retained as a source of government revenue. While the governments of developed nations with market economies collect some of the rent of land in taxes, they do not collect nearly as much as they could, and they therefore make unnecessarily great use of taxes that impede their economies - taxes on such things as incomes, sales, and the value of capital.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"political-feasibility","name":"Political Feasibility","id":"121668951"},{"slug":"public-opinion","name":"Public Opinion","id":"118561899"}],"title":"A group of Nobel Laureate economists co-signed an open letter sent to Gorbachev in 1990 advocating a land value tax, urging Russia not to follow the Western economies in the \"danger\" of allowing most of the rent of land to be collected privately. Co-signers included Robert Solow, James Tobin, William Vickrey, and William Baumol."},{"id":"121670340","slug":"liberal-and-conservative-economists-alike-such-as-paul-krugman-and-milton-friedma","sources":[{"slug":"does-georgism-work-part-1-is-land-really-a-big-deal"}],"lede":"“Liberal Krugman and conservative Milton Friedman both seem to agree that LVT has no deadweight loss, which means LVT, unlike income and capital taxes, doesn't create a drag on productivity. This means that if we can raise enough money from LVT, we can reduce at least some inefficient taxes, such as those on labor, while keeping government spending the same. Not only could this be popular politically, it would also boost the economy.”","tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"taxes","name":"Taxes","id":"49378929"}],"title":"Liberal and conservative economists alike - such as Paul Krugman and Milton Friedman - agree that LVT has no deadweight loss, making it an ideal tax in terms of efficiency. Or in Friedman's terms, the \"least bad tax\"."},{"id":"121669970","slug":"using-conservative-estimates-lvt-could-raise-enough-funding-to-cover-the-entirety","sources":[{"slug":"does-georgism-work-part-1-is-land-really-a-big-deal"}],"lede":"-","tags":[{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"Using conservative estimates, LVT could raise enough funding to cover the entirety of either Defense spending, Social Security, or Medicare + Medicaid (roughly $1.1 trillion per year). More optimistic estimates suggest LVT revenues could reach $3.36 trillion per year, nearly enough to cover the entire federal budget."},{"id":"121740898","slug":"land-value-taxation-offers-a-viable-approach-to-financing-public-transit-systems","sources":[{"slug":"sustaining-mass-transit-through-land-value-taxation-prospects-for-chicago"}],"lede":"“Our theoretical view of local tax options suggests that LVT is a reasonably effective means of financing public transportation capital improvements by levying taxes on the portion of property value created by transit stations. This approach is mostly consistent with the fiscal equivalence condition, as value capture attempts to assign costs directly to beneficiaries. Since this type of financial instrument does not, however, directly influence the use of the infrastructure, land value capture imperfectly fulfills the efficiency criterion in supplementing current financing regimes. Value capture helps indirectly internalize certain externalities (e.g., positive externalities accruing to property owners as property value increments, perhaps reducing automobile congestion), but has limited value for others, such as congestion in the transit system. In theory, LVT can improve horizontal equity, at least in terms of assigning costs. As our implementation scenarios show, however, the type of administrative methods adopted carry trade-offs between administrative ease, efficiency, and vertical equity”","tags":[{"slug":"public-goods","name":"Public Goods","id":"113764615"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Land value taxation offers a viable approach to financing public transit systems, and places the tax burden on those areas that benefit most from such public services."},{"id":"121669956","slug":"using-conservative-estimates-of-national-land-value-a-ubi-funded-by-lvt-revenues","sources":[{"slug":"does-georgism-work-part-1-is-land-really-a-big-deal"}],"lede":"Assumed national land rents is $1.2 trillion in 2020 (this follows the Federal Reserve’s method, using a low, 5% capitalization rate). Further assumptions include 209 million as the American adult population, and a 50% land share. For these figures, any individual with a property worth less than $230,000 would either break even or profit. Two-adult households would break even at $460,000 in property value.","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Using conservative estimates of national land value, a UBI funded by LVT revenues could provide roughly $5,750 per adult, per year."},{"id":"121693648","slug":"increasing-the-tax-rate-on-land-balanced-by-a-decrease-in-the-tax-rates-on-the-in","sources":[{"slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land"}],"lede":"“The post-Corona economic environment puts a premium on finding fiscal means to stimulate the economy while continuing to finance current levels of expenditures and debt. We develop and carefully calibrate a model of the US economy to show that an increase in the tax rate on the value of land, balanced by decreases in the tax rates on the incomes of capital and labor, can meet this need.”","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"taxes","name":"Taxes","id":"49378929"}],"title":"Increasing the tax rate on land, balanced by a decrease in the tax rates on the income of capital and labor, can provide a fiscal means to stimulate the economy while maintaining current levels of expenditures and debt."},{"id":"121670443","slug":"increasing-the-tax-rate-on-land-from-0-55-to-5-55-balanced-by-reductions-in-taxes","sources":[{"slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land"}],"lede":"If the model is tweaked to include separate groups of workers, capitalists, and landlords, the output gain remains the same while welfare gains rise to 6.4%.","tags":[{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752"},{"slug":"taxes","name":"Taxes","id":"49378929"}],"title":"Increasing the tax rate on land from 0.55% to 5.55%, balanced by reductions in taxes on capital and labor by 28% and 10%, respectively, would increase the welfare of a representative household by 3.4%, and increase output by 15%. "},{"id":"121669928","slug":"replacing-all-current-taxation-with-a-20-land-asset-value-tax-and-a-12-2-consumpt","sources":[{"slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land"}],"lede":"“The final simulation of our study has shown just how far the stimulus effects could be taken if a radical reform is not ruled out. It shows that optimal taxation can raise more than half of all tax revenue using a tax on the current asset value of land even if the tax rate is capped at 20%, and would raise the remainder by a consumption tax of around 12%, with all taxes on incomes abolished. This would increase welfare and output by 5.2% and 26.0%.”","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752"},{"slug":"welfare","name":"Welfare","id":"23933425"},{"slug":"taxes","name":"Taxes","id":"49378929"}],"title":"Replacing all current taxation with a 20% land asset value tax and a 12.2% consumption tax would maintain current levels of government revenue, while raising welfare by 5.2% and output by 26%."},{"id":"99017964","slug":"a-revenue-neutral-swap-of-new-york-city-s-taxes-for-a-21-7-land-value-tax-is-simu","sources":[{"slug":"land-taxation-in-new-york-city-a-general-equilibrium-analysis"}],"lede":"The authors developed a computable general equilibrium model of the New York City economy, which they emphasize has significant unknowns, and we should thus interpret results lightly. A 21.7% LVT was found to be the rate that maintains tax revenue neutrality when eliminating NYC sales, capital, and income taxes.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"taxes","name":"Taxes","id":"49378929"},{"slug":"urban-development","name":"Urban Development","id":"99017961"}],"title":"A revenue-neutral swap of New York City's taxes for a 21.7% land value tax is simulated to increase wages by 4% and aggregate output by 91%, while decreasing city land price by 28%, and the poverty rate by 34%."},{"id":"121742486","slug":"a-revenue-neutral-shift-to-a-pure-land-value-tax-in-the-state-of-new-hampshire-is","sources":[{"slug":"state-and-local-impacts-of-a-revenue-neutral-shift-from-a-uniform-property-to-a-l"}],"lede":"Additionally, residential construction is projected to increase 1.16%, total exports by 0.19%, disposable income by 0.6%, and total population by 0.76%.","tags":[{"slug":"employment","name":"Employment","id":"23932807"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A revenue-neutral shift to a pure land value tax in the state of New Hampshire is projected to raise total employment by 0.35% and raise gross state product by 0.36%"},{"id":"121742469","slug":"a-simulation-suggests-a-revenue-neutral-shift-to-a-pure-land-value-tax-in-new-ham","sources":[{"slug":"state-and-local-impacts-of-a-revenue-neutral-shift-from-a-uniform-property-to-a-l"}],"lede":"-","tags":[{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A simulation suggests a revenue neutral shift to a pure land value tax in New Hampshire would have positive short term effects that persist in the long term."},{"id":"121670331","slug":"lvt-disincentivizes-land-speculation-by-increasing-the-holding-costs-of-land","sources":[{"slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county"}],"lede":"-","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"LVT disincentivizes land speculation by increasing the holding costs of land."},{"id":"121817860","slug":"in-the-period-following-harrisburg-pa-s-land-value-tax-the-number-of-vacant-lots","sources":[{"slug":"a-land-value-tax-for-london"}],"lede":"“In 1975 the city enacted LVT as a policy tool to stimulate development and to discourage land speculation. It reduced the tax on buildings to one-half of that on land and, over a period of time, increased the tax on land to six times that of property. Mayor Stephen Reed credits LVT with the resulting regeneration.”","tags":[{"slug":"crime","name":"Crime","id":"118617103"},{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"precedents","name":"Precedents","id":"121744884"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"In the period following Harrisburg, PA's land value tax, the number of vacant lots fell by 80%, the tax base rose from $212 million to $1.6 billion, and the crime rate fell 46%."},{"id":"141646198","slug":"raising-land-tax-rates-in-australia-appears-to-have-led-to-a-decrease-in-land-spe","sources":[{"slug":"the-first-interval-evaluating-act-s-land-value-tax-transition"}],"lede":"“The main lesson is that a transition to a land value tax system can be achieved without radical disruption to property markets, and will have the added benefit of reducing speculative buying and dampening price cycles.”","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Raising land tax rates in Australia appears to have led to a decrease in land speculation."},{"id":"121670328","slug":"simulations-of-multnomah-county-oregon-suggest-that-a-lvt-would-provide-a-more-eq","sources":[{"slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county"}],"lede":"\"Ultimately, land-based property tax systems, whether a split-rate LVT or an AXI building exemption tax, do what they are designed to do—place more of the tax burden on wealthier land-owners, and encourage the highest and best use of land. Based on the simulations performed on the INE and OSE communities, a LVT would provide a more equitable tax structure, incentivize structure upgrading and development of underutilized properties, and discourage “holding” land for speculative purposes. Furthermore, the potential downsides of the tax policy—such as increasing taxes on low-income homeowners—can be mitigated with carefully crafted legislation. In short, many of the inequities created by Measure 5 and 50 would likely be reversed if a LVT were implemented in the Portland region.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"taxes","name":"Taxes","id":"49378929"}],"title":"Simulations of Multnomah County, Oregon, suggest that a LVT would provide a more equitable tax structure, incentivize development of underutilized properties, and discourage land speculation."},{"id":"121721084","slug":"in-theory-a-land-value-tax-encourages-compact-urban-development","sources":[{"slug":"measuring-the-effects-of-a-land-value-tax-on-land-development"}],"lede":"By raising the tax rate on land and lowering that on buildings, LVT promotes the incentive to develop improvements on existing land, rather than building on new land.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"urban-development","name":"Urban Development","id":"99017961"}],"title":"In theory, a land value tax encourages compact urban development."},{"id":"121721055","slug":"a-land-value-tax-encourages-more-development-around-preexisting-development-raisi","sources":[{"slug":"measuring-the-effects-of-a-land-value-tax-on-land-development"}],"lede":"\"Thus, the marginal effect of a land value tax on the probability of land development is greater around preexisting development than in areas distant from preexisting development. This finding empirically validates the hypothesis that a land value tax encourages more development around preexisting development than in areas where preexisting development does not exist.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"urban-development","name":"Urban Development","id":"99017961"}],"title":"A land value tax encourages more development around preexisting development, raising urban density and counteracting urban sprawl."},{"id":"121744528","slug":"78-of-americans-support-the-control-of-urban-sprawl-in-land-use-planning","sources":[{"slug":"measuring-the-effects-of-a-land-value-tax-on-land-development"}],"lede":"Poll by: https://smartgrowthamerica.org/about-us/our-history/","tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899"},{"slug":"urban-development","name":"Urban Development","id":"99017961"}],"title":"78% of Americans support the control of urban sprawl in land use planning."},{"id":"121742368","slug":"pennsylvania-cities-that-adopted-split-rate-land-value-taxes-enjoyed-significantl","sources":[{"slug":"a-markov-chain-monte-carlo-analysis-of-the-effect-of-two-rate-property-taxes-on-c"}],"lede":"Researchers combined statistical analysis of the effect of split-rate taxes on the number of building permits with their effect on the value per permit in order to estimate the effect of split-rate taxes on the total value of construction.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"housing","name":"Housing","id":"121669963"}],"title":"Pennsylvania cities that adopted split-rate land value taxes enjoyed significantly higher levels of construction activity than they would would with single-rate property taxes."},{"id":"121744879","slug":"split-rate-tax-increases-development-activity-as-measured-by-building-permits","sources":[{"slug":"how-smart-is-the-split-rate-property-tax-evidence-from-growth-patterns-in-pennsyl"}],"lede":"\"Oates and Schwab (1997) and Plassmann and Tideman (2000) show that the split-rate tax increases development activity as measured by building permits. This finding suggests the split- rate tax does have the expected effect on the land/capital ratio. Whether the aggregate increase in capital is the result of the improvement effect or of the dwelling size effect is unclear.\"","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Split-rate tax increases development activity as measured by building permits."},{"id":"121744913","slug":"following-a-large-expansion-in-pittsburgh-s-split-rate-tax-their-average-annual-b","sources":[{"slug":"pennsylvania-s-success-with-local-property-tax-reform-the-split-rate-tax"}],"lede":"\"A recent study (Table 3) by University of Maryland economists, Wallace Oates and Robert Schwab, compared average annual building permit values in Pittsburgh and 14 other eastern cities during the decade before, and the decade after, Pittsburgh greatly expanded its two-rate tax. Pittsburgh had a 70.4%increase in the value of building permits while the 15 city average decreased by 14.4% These findings about Pittsburgh's far superior showing are especially remarkable when it is recalled that this city's traditional industry-steel-was undergoing a severe crisis through- out the latter decade.\"","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"recessions","name":"Recessions","id":"116254487"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Following a large expansion in Pittsburgh's split-rate tax, their average annual building permit values increased by 70.4%, while 15 other cities had a 14.4% decrease in the same time period."},{"id":"121725301","slug":"the-pittsburgh-city-council-president-stated-i-m-not-going-to-say-the-land-tax-is","sources":[{"slug":"the-impact-of-urban-land-taxation-the-pittsburgh-experience"}],"lede":"But the conclusion is divisive among those close to the Pittsburgh experience. As the authors report: \"In contrast, a major official and a close observer (independently) have asserted categorically to us that all the major projects that were undertaken in the CBD would have been undertaken in the absence of any increase in land taxes; their view is that the shortage of office space was the basic driving force in these investment decisions.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"urban-development","name":"Urban Development","id":"99017961"}],"title":"The Pittsburgh City Council President stated: \"I'm not going to say the land tax is the only reason a second renaissance occurred, but it's been a big help\"."},{"id":"121742411","slug":"across-south-africa-estonia-australia-denmark-new-zealand-and-namibia-there-is-no","sources":[{"slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice"}],"lede":"Economic theory suggests a LVT would encourage the development of vacant or under-developed land by raising the tax burden of holding such land.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Across South Africa, Estonia, Australia, Denmark, New Zealand, and Namibia, \"there is no firm evidence that LVT was a consistently effective tool for bringing land forward for development.\" Instead of taxation, more direct measures such as land use planning, development control, and infrastructure investment may be more effective."},{"id":"121670318","slug":"a-lvt-only-encourages-the-development-of-vacant-or-under-developed-land-in-cases","sources":[{"slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice"}],"lede":"\"Economic theory suggests that a land value tax based on highest and best use (HABU) would encourage the development of vacant or under- developed land because of the increased holding cost, thereby creating an incentive to sell the land or develop it. However, this only works in cases where land can be viably developed. Where land is economically not viable to develop, it follows that there is no value on which to levy a land value tax. Such land may require subsidy rather than taxation (Hughes et al., 2018). In the six countries reviewed, there was no firm evidence that LVT was a consistently effective tool for bringing land forward for development. Instead of taxation, more direct forms of regulatory control such as land use planning, development control and infrastructure investment are likely to be more effective.\"","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A LVT only encourages the development of vacant or under-developed land in cases where land can be viably developed. Where land cannot be viably developed, there is no value to be gained from a LVT."},{"id":"121721135","slug":"rapid-land-development-is-associated-with-loss-of-farmland-and-open-space-higher","sources":[{"slug":"measuring-the-effects-of-a-land-value-tax-on-land-development"}],"lede":"\"Of serious concern to planners is the rapidly increasing rate of land consumption. Between 1970 and 1990, Nashville’s population grew by 28% while its urbanized area grew by 41% (Sierra Club 2009). Land was reportedly developed at a rate of 60 acres per day during the early 2000s (Chief Executive Magazine 2005). Much of this additional land consumption has taken place in suburban or exurban areas, causing loss of farmland and open space, higher costs of infrastructure and community services, roadway congestion, racial segregation, and concentrated poverty (Katz 2000, 2002; Snyder and Bird 1998; Gordon and Richardson 1998; Daniels and Bowers 1997; Brookings 2000; Nelson and Sanchez 2005).\"","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"poverty","name":"Poverty","id":"100414757"}],"title":"Rapid land development is associated with loss of farmland and open space, higher costs of infrastructure and community services, roadway congestion, racial segregation, and concentrated poverty."},{"id":"121693882","slug":"in-hawaii-lvt-was-abandoned-because-it-was-seen-as-a-cause-of-overdevelopment-in","sources":[{"slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county"}],"lede":"If a primary effect of LVT is to spur development, there may be contexts in which further urban development is undesirable.","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"In Hawaii, LVT was abandoned because it was seen as a cause of overdevelopment in Waikiki in the 1970's."},{"id":"121742418","slug":"adam-smith-favored-a-land-value-tax-arguing-that-a-tax-on-unimproved-land-value-w","sources":[{"slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice"}],"lede":"The theoretical case for a land value tax was held in high favor by classical economists from Smith to David Ricardo, John Stuart Mill, to Alfred Marshall.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"efficiency","name":"Efficiency","id":"72743745"}],"title":"Adam Smith favored a land value tax, arguing that a tax on unimproved land value would not harm economic activity and would not increase land rents."},{"id":"99026318","slug":"adam-smith-supported-land-value-taxation-writing-that-the-burden-would-fall-upon","sources":[{"slug":"the-wealth-of-nations"}],"lede":"“Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground.”","tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"monopoly","name":"Monopoly","id":"95853323"}],"title":"Adam Smith supported land value taxation, writing that the burden would fall upon owners of \"ground-rent\", who always act as monopolists."},{"id":"121744520","slug":"taxing-land-values-may-distort-the-choice-between-earlier-and-later-development-o","sources":[{"slug":"the-impact-of-urban-land-taxation-the-pittsburgh-experience"}],"lede":"\"In particular, the taxing of land-values may distort the choice between earlier and later development of unused land parcels in favor of those projects that promise an earlier stream of net receipts. The implication of their models is that a movement in the direction of land taxation may hasten economic development, perhaps to an extent that is excessive on purely efficiency grounds. This effect, however, depends upon an important and controversial assumption concerning the way in which land is valued for tax purposes. Where this assumption is satisfied, land-value taxation can have what we will call a timing effect.\"","tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"decision-making","name":"Decision-Making","id":"95060898"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Taxing land-values may distort the choice between earlier and later development of unused parcels of land in favor of projects that promise an earlier stream of revenue. This may distort efficient land use."},{"id":"121742552","slug":"land-value-taxation-is-unique-in-that-it-can-raise-tax-revenue-without-raising-th","sources":[{"slug":"the-impact-of-urban-land-taxation-the-pittsburgh-experience"}],"lede":"This is because unlike other subjects of taxation, the supply of land is fixed, so raising tax rates cannot affect supply.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"taxes","name":"Taxes","id":"49378929"},{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"}],"title":"Land value taxation is unique in that it can raise tax revenue without raising the adverse fiscal incentives that other tax measures impose."},{"id":"121670388","slug":"based-on-the-results-of-a-natural-experiment-in-denmark-land-value-taxation-doesn","sources":[{"slug":"land-taxes-and-housing-prices"}],"lede":"“The results imply full capitalization of the present value of future taxes under reasonable assumptions of discount rates. Consequently it gives an empirical confirmation of two striking consequences of a land tax: Firstly, it does not distort economic decisions because it does not distort the user cost of land.”","tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"decision-making","name":"Decision-Making","id":"95060898"}],"title":"Based on the results of a natural experiment in Denmark, land value taxation doesn't distort economic decisions because it doesn't distort the user cost of land."},{"id":"121740941","slug":"rising-housing-prices-entirely-accounts-for-the-rise-in-net-capital-share-of-inco","sources":[{"slug":"deciphering-the-fall-and-rise-in-the-net-capital-share-accumulation-or-scarcity"}],"lede":"-","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"housing","name":"Housing","id":"121669963"}],"title":"Rising housing prices entirely accounts for the rise in net capital share of income since the 1970's. Despite recent studies citing the role of increased capital accumulation in exacerbating inequality, this rise may entirely be due to rising housing prices. "},{"id":"121740756","slug":"a-large-share-of-the-gains-from-economic-progress-are-captured-by-higher-land-ren","sources":[{"slug":"the-taxation-of-land-value-as-the-means-towards-optimal-urban-development-and-the"}],"lede":"“Much of the gains from economic expansion and greater productivity are captured by higher land rent more so than higher wages or capital yields. If entrepreneurial profits in a competitive industry are greater than in other fields, firms enter and expand the supply, which reduces the product prices and brings profits down to normal. Likewise, if wages in an industry are higher than in others, entry expands the labour and reduces the wage to normal. But when economic progress raises land rents, the supply cannot expand, and rent rises. Where land is lightly taxed relative to wages, goods, and enterprise profits, the income of landowners rises while workers are tax-penalized. The resulting level of inequality is excessive in the sense of being more than is needed to provide incentives to enterprise and employment. Optimal inequality can be regarded as that which is generated by a pure market, having neither subsidies nor market-hampering taxation.”","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"value-extraction","name":"Value Extraction","id":"121740754"}],"title":"A large share of the gains from economic progress are captured by higher land rents, as opposed to higher wages or capital yields, such that landlords capture an outsized share of development through charging higher rents."},{"id":"121740748","slug":"if-the-rise-in-inequality-between-labor-and-capital-is-due-to-the-rise-in-land-va","sources":[{"slug":"the-taxation-of-land-value-as-the-means-towards-optimal-urban-development-and-the"}],"lede":"“The economic inequality as presented in works such as Capital in the Twenty-First Century by Thomas Piketty (2014) has been a global problem, but often incompletely analysed. Critics of Piketty such as Matthew Rognlie (2015) have pointed out that the decline in the portion of income going to wages relative to non-wage income is explained by the rise in land value, not by the rise in (physical) capital value, as suggested by Piketty (2014). Thus, the taxation of land value, for public benefit, replacing other taxes, would reduce inequality while promoting greater efficiency.”","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"housing","name":"Housing","id":"121669963"},{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"If the rise in inequality between labor and capital is due to the rise in land value - as opposed to capital increasing its share of national income - then land value taxation for public benefit would reduce inequality while promoting efficiency."},{"id":"99019851","slug":"taxing-rising-land-values-allows-for-the-redistribution-of-landlord-s-unearned-ga","sources":[{"slug":"an-introduction-to-two-rate-taxation-of-land-and-buildings"}],"lede":"“He [Henry George] also cited equity reasons for the 'single tax' on land. Namely, increases in land value (exclusive of improve- ments) in the early 1900s were due primarily to an entire community’s private-sector and public- sector economic activities rather than the actions of the specific land owner. Therefore, George argued, land owners should not benefit dispro- portionately from city growth, and the tax on land would allow for the redistribution of these unearned gains.”","tags":[{"slug":"taxes","name":"Taxes","id":"49378929"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"redistribution","name":"Redistribution","id":"74016537"}],"title":"Taxing rising land values allows for the redistribution of landlord's unearned gains arising from city growth."},{"id":"121720948","slug":"land-value-taxation-can-help-shift-tax-burden-to-land-in-urban-centers-that-benef","sources":[{"slug":"land-value-tax-can-it-work-in-the-district"}],"lede":"Land near public transport, in safe neighborhoods, and in close proximity to job centers all benefit from higher land values, through causes unrelated to landowners. LVT would shift tax burdens onto this higher land value areas, so that those who benefit the most from community investments also return more of that benefit back to the community, via taxation.","tags":[{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Land value taxation can help shift tax burden to land in urban centers that benefit the most from existing public spending."},{"id":"121693918","slug":"switching-to-a-90-10-lvt-in-multnomah-county-oregon-would-shift-the-tax-burden-to","sources":[],"lede":"-","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"}],"title":"Switching to a 90/10 LVT in Multnomah County, Oregon, would shift the tax burden towards wealthier landowners, changing the property tax burden from regressive to mildly progressive."},{"id":"121744561","slug":"lvt-in-this-texas-municipality-begins-as-mildly-regressive-and-becomes-lightly-pr","sources":[{"slug":"evidence-on-the-distributional-effects-of-a-land-value-tax-on-residential-househo"}],"lede":"\"Researchers examining property tax incidence often use the Suits index to measure a tax system’s overall progressivity (Suits, 1977).19 The Suits index can vary from –1 to +1, with –1 indicating maximum regressivity and +1 indicating maximum progressivity. An index value of 0 indicates a proportional tax. I compute a Suits index for the LVT system separately for each year and report results in Table 4. The index is slightly negative (S = –0.0125) in 1997, and then steadily increases to 0.0226 in 2006. The trend of values suggests that the LVT becomes slightly more progressive over the 10-year period. However, all index values are very close to zero, with values ranging from –0.0125 to 0.0295\"","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"}],"title":"LVT (in this Texas municipality) begins as mildly regressive, and becomes lightly progressive over time."},{"id":"121744811","slug":"a-revenue-neutral-lvt-in-a-texas-municipality-would-decrease-average-tax-liabilit","sources":[{"slug":"evidence-on-the-distributional-effects-of-a-land-value-tax-on-residential-househo"}],"lede":"-","tags":[{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"housing","name":"Housing","id":"121669963"}],"title":"A revenue-neutral LVT (in a Texas municipality) would decrease average tax liabilities for single-family properties by 30%, shifting them onto commercial & industrial property classes."},{"id":"121744798","slug":"the-median-average-change-in-tax-liability-after-revenue-neutral-lvt-was-28-6","sources":[{"slug":"evidence-on-the-distributional-effects-of-a-land-value-tax-on-residential-househo"}],"lede":"\"This study’s results are summarized as follows. On an aggregate basis, a revenue-neutral LVT would shift the tax burden away from single-family residential properties and on to other property classes. Over the 10-year period, a LVT would decrease taxes for 85.5 percent of residential homeowners, and the median average change in tax liability would be -28.6 percent.\"","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"housing","name":"Housing","id":"121669963"}],"title":"The median average change in tax liability after revenue-neutral LVT was -28.6%."},{"id":"121744920","slug":"85-of-pennsylvanian-homeowners-pay-less-under-split-rate-taxation-than-they-did-u","sources":[{"slug":"pennsylvania-s-success-with-local-property-tax-reform-the-split-rate-tax"}],"lede":"\"In Pennsylvania 85% of homeowners pay less with this policy than they do with the traditional flat rate approach. For those who do pay more, it is not significantly more and they tend to be wealthier homeowners who can better afford to pay a little more. Some, indeed, whose business efforts are encouraged by this policy, come out ahead.\"","tags":[{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"85% of Pennsylvanian homeowners pay less under split rate taxation than they did under traditional flat-rate taxes."},{"id":"121693914","slug":"while-lvt-may-be-progressive-on-aggregate-there-are-situations-where-lower-income","sources":[{"slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county"}],"lede":"\"A variety of mitigation techniques have been proposed to smooth the transition to LVT for those who are asset rich and low-income, and Oregon currently has other tax deferrals that could be extended to help such households. One option is to grandfather households who are asset rich and low-income into their previous property tax payments until death or the sale of the property (either allowing the tax payments to increase at some fixed growth rate or continuing under the current tax system).\"","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"While LVT may be progressive on aggregate, there are situations where lower income home-owners may face increased costs."},{"id":"121744783","slug":"the-least-wealthy-are-mostly-likely-to-face-tax-increases-via-lvt","sources":[{"slug":"evidence-on-the-distributional-effects-of-a-land-value-tax-on-residential-househo"}],"lede":"-","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"}],"title":"The least wealthy are mostly likely to face tax increases via LVT."},{"id":"121693893","slug":"land-rich-income-poor-people-pose-an-obstacle-for-land-value-taxation-as-they-sta","sources":[{"slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county"}],"lede":"\"Specifically, people who are “land rich and income poor” pose a problem when considering a switch to LVT. One of the key motivators for LVT is to create a situation where those with low incomes bear lower incidence. However, in urban areas where land value has grown significantly in a relatively short amount of time there are undoubtedly people who live in homes near urban centers that earn relatively low incomes. For these homeowners, LVT would likely increase their tax incidence. However, measures such as delaying a switch to LVT until death or sale and implementing a lower LVT/RMV ratio for overburdened landowners are policy measures that could correct for these situations and are discussed in the “Mitigation” section below.\"","tags":[{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"'Land rich, income poor' people pose an obstacle for land value taxation, as they stand to face higher tax burdens."},{"id":"121669955","slug":"pairing-a-national-lvt-with-a-ubi-funded-by-the-revenue-would-provide-a-net-gain","sources":[{"slug":"does-georgism-work-part-1-is-land-really-a-big-deal"}],"lede":"These figures assume a LVT rate of 100%, a $1.2 trillion estimate for America’s land rents, 209 million American citizens above the age of 18, and a land share of 50%.","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"}],"title":"Pairing a national LVT with a UBI funded by the revenue would provide a net gain to two-adult households with property values at $500,000 or less."},{"id":"121740809","slug":"a-land-value-tax-in-the-uk-would-be-mildly-regressive-but-distributing-the-revenu","sources":[{"slug":"there-you-may-behold-the-rent-effects-of-a-uk-land-dividend"}],"lede":"The land tax alone applies to a base of £5.5 trillion in non-governmental land value, raising £55 billion per year. Alone, this tax would raise the Gini index by 0.08%, but distributing the revenue as a UBI makes the tax highly progressive. The bottom decile’s income would rise by 16%, while the top’s would decline by 2%.","tags":[{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"A land value tax in the UK would be mildly regressive, but distributing the revenue as a UBI would make the program highly progressive."},{"id":"121740819","slug":"a-1-land-value-tax-in-the-uk-could-fund-a-ubi-of-ps16-per-week-reducing-poverty-b","sources":[{"slug":"there-you-may-behold-the-rent-effects-of-a-uk-land-dividend"}],"lede":"The land tax alone applies to a base of £5.5 trillion in non-governmental land value, raising £55 billion per year. Alone, this tax would raise the Gini index by 0.08%, but distributing the revenue as a UBI makes the tax highly progressive. The bottom decile’s income would rise by 16%, while the top’s would decline by 2%.","tags":[{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447"},{"slug":"poverty","name":"Poverty","id":"100414757"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"A 1% land value tax in the UK could fund a UBI of £16 per week, reducing poverty by 20% and benefitting 70% of the population."},{"id":"121670396","slug":"a-natural-experiment-of-changing-land-value-taxation-rates-occurred-in-denmark-in","sources":[{"slug":"land-taxes-and-housing-prices"}],"lede":"“The results demonstrate a clear effect on sales prices of the observed changes in land tax rates. Furthermore, the magnitude of the changes implies full capitalization of the present value of the change in future tax payments for a discount rate of 2.3 per cent, which is within the range of reasonable discount rates for households during the period in question. The analysis consequently supports the hypothesis that perceived permanent land tax changes should be capitalized fully into the price of land and property.”","tags":[{"slug":"housing","name":"Housing","id":"121669963"},{"slug":"inflation","name":"Inflation","id":"49378895"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"A natural experiment of changing land value taxation rates occurred in Denmark in 2007. Results suggest that raising tax rates on land does not get passed onto tenants, but instead, gets fully capitalized into land and property prices."},{"id":"121693693","slug":"in-german-municipalities-land-value-tax-does-not-increase-monthly-rent-levels-and","sources":[{"slug":"tiebout-visits-germany-land-tax-capitalization-in-a-sample-of-german-municipaliti"}],"lede":"\"...land taxes do capitalize into land values, whereas the monthly rent level remains unaffected by the land tax. In addition, the results point to significant spillovers from amenities and the provision of public goods across municipalities.”","tags":[{"slug":"public-goods","name":"Public Goods","id":"113764615"},{"slug":"housing","name":"Housing","id":"121669963"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"In German municipalities, land value tax does not increase monthly rent levels, and is associated with spillovers in amenities and provision of public goods."},{"id":"141648123","slug":"after-raising-land-value-tax-rates-in-an-australian-territory-the-typical-new-hom","sources":[{"slug":"the-first-interval-evaluating-act-s-land-value-tax-transition"}],"lede":"“We see evidence of mortgage savings from the lower prices in Canberra…where the size of average new home loans in ACT has grown far less than the other major States since the tax reforms began. Average loan size is up approximately 9% in ACT since July 2012, while the mean increase for other states is 14% (or 19% excluding Northern Territory and Tasmania). With average loan size now $364,000 in the Territory, this data suggests that the capitalisation of land taxes into prices may have led to a reduction in average mortgage size in the Territory in the range of $18,000 to $37,000. In terms of annual mortgage costs, this represents a saving of between $1,000 and $2,200 per year for the average home.”","tags":[{"slug":"housing","name":"Housing","id":"121669963"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"After raising land value tax rates in an Australian territory, the typical new home buyer will save between $1,000 and $2,200 on mortgage payments."},{"id":"121725306","slug":"despite-lvt-s-high-theoretical-appeal-administrative-and-political-realities-have","sources":[{"slug":"evaluating-the-feasibility-and-burden-shifting-effects-of-a-statewide-land-value"}],"lede":"-","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"political-barriers","name":"Political Barriers","id":"99764018"}],"title":"Despite LVT's high theoretical appeal, administrative and political realities have generally outweighed and discouraged setting one up in practice."},{"id":"121721009","slug":"the-municipality-of-altoona-pa-tried-shifting-to-a-land-value-tax-but-ultimately","sources":[{"slug":"city-council-decides-to-cut-land-value-tax"}],"lede":"In 2002, Altoona began split-rate taxation. By 2011, they shifted entirely to taxing land, with no tax rate on buildings. Five years later, they abandoned the program, returning to ordinary property taxation. The town's mayor blamed the failure on two main factors. First, county and school districts continued charging property taxes, muffling the incentives created by LVT. Second, lack of education about LVT left potential residents and businesses hesitant, scared by the higher rates on land but not realizing the absence of rates on buildings. Residents also reported dissatisfaction at the raised cost of purchasing vacant lots adjacent to their properties.","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"The municipality of Altoona, PA, tried shifting to a land value tax, but ultimately gave up, due to lack of effectiveness and confusion."},{"id":"121693863","slug":"research-suggests-the-city-of-pittsburgh-repealed-their-split-rate-lvt-after-near","sources":[{"slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county"}],"lede":"-","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"urban-development","name":"Urban Development","id":"99017961"}],"title":"Research suggests the city of Pittsburgh repealed their split-rate LVT after nearly 100 years because of poor assessment and rate setting practices, despite evidence that LVT encouraged building activity."},{"id":"121725307","slug":"county-and-city-assessors-are-skeptical-of-transitioning-to-a-land-value-tax-only","sources":[{"slug":"evaluating-the-feasibility-and-burden-shifting-effects-of-a-statewide-land-value"}],"lede":"-","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"public-opinion","name":"Public Opinion","id":"118561899"}],"title":"County and city assessors are skeptical of transitioning to a land value tax. Only 9% of Minnesota county and city assessors surveyed believed land value tax was an idea worth pursuing, while 40% strongly disagreed with pursuing one."},{"id":"121725261","slug":"lack-of-transparency-and-inconsistency-in-land-valuation-methods-has-led-lvt-in-a","sources":[{"slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice"}],"lede":"\"In Queensland Australia, valuations are ideally based on comparable land sales of ‘vacant or lightly improved land’, but where these are not available, improved land sales may be used as comparable evidence, adjusted so as to exclude the value of the improvements. An increasing lack of vacant land sales has prompted greater reliance on improved land sales (Mangioni, 2016), and this has led to a lack of transparency and inconsistency of approaches in the valuation of land and has raised concerns regarding the economic efficiency, simplicity and transparency of the land tax. Consequently LVT in Australia has “constantly been challenged and is one of the more disliked, visual and least understood taxes imposed by governments” (Mangioni, 2016, pp.73–74).\"","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"land-valuation","name":"Land Valuation","id":"121670405"}],"title":"Lack of transparency and inconsistency in land valuation methods has led LVT in Australia to become one of their more disliked and least understood taxes."},{"id":"121697153","slug":"any-reallocation-of-valuation-between-land-and-improvements-will-require-resource","sources":[{"slug":"land-value-tax-can-it-work-in-the-district"}],"lede":"\"Moving away from an income-based approach will likely create a lot of taxpayer confusion. And even though the tax bills split land value and the value of improvements, these reported values could change even when the total assessed values stay the same. Any reallocation of valuation between land and improvements will likely create great taxpayer angst and anger and will require additional resources for the extensive taxpayer education.\"","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Any reallocation of tax burden between land and improvements will require resources for taxpayer education."},{"id":"121697133","slug":"already-in-1990-a-group-of-economists-including-multiple-nobel-laureates-wrote-th","sources":[{"slug":"open-letter-to-mikhail-gorbachev"}],"lede":"“The attached Appendix provides a brief technical discussion of issues of the duration of rights to use land, the transfer of land, the assessment of land, social protection against the abuse and subsequent abandonment of run-down property, and redistribution among localities to adjust for differences in natural per capita endowments. While these issues need to be addressed, none of them present any insoluble problems.”","tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Already in 1990, a group of economists, including multiple Nobel Laureates, wrote that while the technical issues obstructing land value taxation need to be addressed, “none of them present any insoluble problems”."},{"id":"121744901","slug":"applied-methods-for-distinguishing-land-value-from-property-value-are-subject-to","sources":[{"slug":"implications-of-a-land-value-tax-with-error-in-assessed-values"}],"lede":"-","tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Applied methods for distinguishing land value from property value are subject to error."},{"id":"121744897","slug":"benefits-of-land-value-taxation-persist-even-in-cases-where-land-values-are-estim","sources":[{"slug":"implications-of-a-land-value-tax-with-error-in-assessed-values"}],"lede":"\"Based on this reconceptualized model, we prove that a land value tax will have at most the distortion effects of a property tax of equivalent rate, even with the worst possible land value assessment errors. That is, we show that arguments of Mills (1998) and others are incorrect; benefits of land value taxation persist even in cases where land values are estimated with error.\"","tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Benefits of land value taxation persist even in cases where land values are estimated with error."},{"id":"121670431","slug":"the-majority-of-complaints-over-total-land-value-assessments-are-over-buildings-a","sources":[{"slug":"does-georgism-work-part-3-can-unimproved-land-value-be-accurately-assessed-separa"}],"lede":"-","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"The majority of complaints over total land value assessments are over buildings and improvements, not land value."},{"id":"121670423","slug":"in-1911-j-j-pasoriza-houston-s-first-hispanic-mayor-implemented-a-short-lived-ass","sources":[{"slug":"does-georgism-work-part-3-can-unimproved-land-value-be-accurately-assessed-separa"}],"lede":"The plan lasted from 1912 -1913, assessed land at full market value, and assessed buildings at 25%, exempting personal property from all taxation.","tags":[{"slug":"political-feasibility","name":"Political Feasibility","id":"121668951"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"In 1911, J.J. Pasoriza, Houston's first Hispanic mayor, implemented a short-lived assessment and land tax policy known as \"The Houston Plan\"."},{"id":"121670421","slug":"appraising-land-values-via-statistical-methods-is-cheaper-and-faster-than-convent","sources":[{"slug":"land-value-appraisal-using-statistical-methods"}],"lede":"However, this requires access to high quality market transaction data, which was available for the study’s sample of Berlin, but not everywhere in the U.S.","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"land-valuation","name":"Land Valuation","id":"121670405"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"Appraising land values via statistical methods is cheaper and faster than conventional property assessment methods, and no less accurate."},{"id":"121670406","slug":"recently-developed-mass-appraisal-methods-for-land-assessment-include-multiple-re","sources":[{"slug":"does-georgism-work-part-3-can-unimproved-land-value-be-accurately-assessed-separa"}],"lede":"This is only a small sampling of burgeoning methods.","tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Recently developed mass appraisal methods for land assessment include multiple regression analysis, nonparametric kernel regressions, nonparametric adaptive regressions, semiparametric regressions, and the Innovative Land Valuation Model (iLVM)."},{"id":"121720981","slug":"the-potential-development-benefits-of-a-land-value-tax-could-be-blocked-by-zoning","sources":[{"slug":"land-value-tax-can-it-work-in-the-district"}],"lede":"\"The analysis presented above shows that if the city were to adopt a land value tax in the context of its current restrictive land use practices, this new tax regime would be unlikely to increase the city’s housing supply. It would likely generate higher tax revenues from existing properties but would not act as an incentive for developing more intensively in large swaths in D.C. currently set aside for residential use.\"","tags":[{"slug":"zoning","name":"Zoning","id":"121697144"},{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"The potential development benefits of a land value tax could be blocked by zoning restrictions."},{"id":"121720930","slug":"in-d-c-a-primary-obstacle-to-residential-densification-is-the-large-number-of-lot","sources":[{"slug":"land-value-tax-can-it-work-in-the-district"}],"lede":"\"The binding restriction for single family residential lots is not the lot size (in contrast to lots with commercial and multifamily buildings) but the number of dwellings allowed on these lots. While many single-family homes in the District are constructed on large lots, they are often in zones where only detached housing is allowed (R-1-A, and R-1-B). We found 21,000 homes just in these zones, which have no hope for densification even when there could be plenty land. For these, the only path to adding density is by way of an Accessory Dwelling Unit, such as a basement rental or small standalone apartment (sometimes known as a granny flat).\"","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"zoning","name":"Zoning","id":"121697144"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"In D.C., a primary obstacle to residential densification is the large number of lots occupied by single-family residential housing, 71% of which face a high zoning barrier to increasing density."},{"id":"121744508","slug":"land-value-taxation-could-create-stronger-incentives-to-repeal-restrictive-zoning","sources":[{"slug":"does-georgism-work-part-3-can-unimproved-land-value-be-accurately-assessed-separa"}],"lede":"“Many people replied that Land Value Tax is useless until or unless you first fix zoning. First of all, Georgists are natural allies in fixing restrictive zoning policies. This is something they definitely want and will fight for. Second, one of the reasons for restrictive zoning policies is broken incentives. A city doesn't have a huge incentive to repeal restrictive zoning policies because it isn't hurting their tax base. According to Georgists, a city whose tax base is land value has well-aligned incentives. It is incentivized to maximize land value by making the city a more desirable place to live, which also raises their tax base. It is dis-incentivized to over-assess or over-tax the land, however, because that will cause people to leave, which will lower their land values and also their tax base. One of the principle things that depresses land values and the tax base in this scenario is restrictive zoning. I personally don't care whether you first pass LVT or first repeal restrictive zoning, you can and should do both. Either one helps the other along.”","tags":[{"slug":"zoning","name":"Zoning","id":"121697144"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Land value taxation could create stronger incentives to repeal restrictive zoning policies, while repealing restrictive zoning would enable further beneficial effects of land value taxation."},{"id":"121697145","slug":"zoning-reforms-that-could-complement-lvt-s-aim-to-incentivize-development-include","sources":[{"slug":"land-value-tax-can-it-work-in-the-district"}],"lede":"-","tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"zoning","name":"Zoning","id":"121697144"}],"title":"Zoning reforms that could complement LVT's aim to incentivize development include supporting the development of Accessory Dwelling Units and expanding mixed use zoning."},{"id":"99018011","slug":"owners-of-properties-with-high-land-to-improvements-ratios-like-car-dealerships-w","sources":[{"slug":"land-taxation-in-new-york-city-a-general-equilibrium-analysis"}],"lede":"“The argument that political opposition would mount against the change from uniform taxation to two-rate taxation is straightforward. The change in taxation will create winners and losers. Owners of properties with high land-to-improvements ratios (e.g., car dealerships) will tend to experience an increase in their tax liabilities with the move to two-rate taxation, while owners of properties with low land-to-improvements ratios (e.g., high- rise office buildings) will tend to experience a decrease in their tax liabilities. The owners of sub- stantial amounts of land are likely to be wealthy and may have a disproportionate voice in the political process and, thus, prevent a change that would harm them.”","tags":[{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"inequality","name":"Inequality","id":"69359341"}],"title":"Owners of properties with high land-to-improvements ratios (like car dealerships) will tend to experience an increase in their tax liabilities when moving from uniform property taxation to split-rate land value taxation."},{"id":"121693855","slug":"farms-could-experience-tax-hikes-under-lvt-since-they-provide-value-without-devel","sources":[{"slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county"}],"lede":"-","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"tax-burden","name":"Tax Burden","id":"99018007"}],"title":"Farms could experience tax hikes under LVT since they provide value without development, and may require exemptions."},{"id":"121670382","slug":"the-burden-of-raising-land-tax-rates-falls-on-the-owner-at-the-time-of-the-tax-ch","sources":[{"slug":"land-taxes-and-housing-prices"}],"lede":"“The results imply full capitalization of the present value of future taxes under reasonable assumptions of discount rates. Consequently it gives an empirical confirmation of two striking consequences of a land tax: Firstly, it does not distort economic decisions because it does not distort the user cost of land. Secondly, the full incidence of a permanent land tax change lies on the owner at the time of the (announcement of the) tax change; future owners, even though they officially pay the recurrent taxes, are not affected as they are fully compensated via a corresponding change in the acquisition price of the asset.”","tags":[{"slug":"tax-burden","name":"Tax Burden","id":"99018007"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"The burden of raising land tax rates falls on the owner at the time of the tax change. Future owners, although paying higher rates, are unaffected since they are fully compensated via a corresponding change in the land's acquisition price."},{"id":"121725262","slug":"particular-types-of-land-can-be-exempted-from-land-value-taxation-estonia-exempts","sources":[{"slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice"}],"lede":"-","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"}],"title":"Particular types of land can be exempted from land value taxation. Estonia exempts nature reserves, church land, and public water bodies. Queensland Australia exempts land used for agriculture. "},{"id":"121693852","slug":"mitigation-strategies-for-the-undue-tax-burden-placed-by-lvt-on-those-with-low-in","sources":[{"slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county"}],"lede":"-","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Mitigation strategies for the undue tax burden placed by LVT on those with low incomes but high asset values include grandfathering such households into previous tax arrangements until death or sale of property, or a gradual phase-in of LVT."},{"id":"121669930","slug":"implementing-lvt-would-likely-cause-an-immediate-drop-in-land-values-that-may-cau","sources":[{"slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land"}],"lede":"“Nevertheless, short-term concerns cannot be entirely eliminated, because the increases in output and income invariably take time to develop, as shown in Section 8, while the immediate drop in land values can be moderated but not entirely eliminated by a slower implementation speed. The fact that our proposed reform has initially moderate cash flow effects, and that it balances the increased LAVT by cuts in taxes on income and capital, is therefore essential to maximize political support. But beyond this, the shift to a significantly higher LAVT would probably also need to be accompanied by relief for a small share of taxpayers that experience cash-flow problems, an issue that we will discuss in Section 5.3.”","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Implementing LVT would likely cause an immediate drop in land values that may cause a small share of taxpayers to experience cash-flow problems. These effects can be mitigated by gradual implementation, direct relief, and over time, longer-term gains in output and income."},{"id":"121670341","slug":"when-henry-george-advocated-lvt-as-a-single-tax-to-replace-all-other-taxation-the","sources":[{"slug":"does-georgism-work-part-1-is-land-really-a-big-deal"}],"lede":"Many suggest that LVT is no longer viable as a single tax, given the rise in other taxation that would need to be replaced by LVT revenue. Even as one tax among many, however, the potential benefits of LVT remain strong.","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"When Henry George advocated LVT as a single tax to replace all other taxation (the 1800's), there was no federal income tax, and state and federal spending were significantly lower."},{"id":"121669968","slug":"in-2019-a-national-lvt-is-estimated-to-raise-anywhere-from-25-1-1-trillion-76-3-3","sources":[{"slug":"does-georgism-work-part-1-is-land-really-a-big-deal"}],"lede":"-","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"pay-fors","name":"Pay-Fors","id":"99763897"}],"title":"In 2019, a national LVT is estimated to raise anywhere from 25% ($1.1 trillion) - 76% ($3.36 trillion) of annual federal spending, depending on methodologies used to produce estimates."},{"id":"99018001","slug":"if-new-york-city-were-to-swap-out-its-income-property-and-general-corporation-tax","sources":[{"slug":"land-taxation-in-new-york-city-a-general-equilibrium-analysis"}],"lede":"While a land value tax was originally proposed as a substitute for all other forms of taxation, in practice, local governments have explored more modest, revenue-neutral reforms that replace only some tax revenue by raising taxes on land value.","tags":[{"slug":"taxes","name":"Taxes","id":"49378929"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"If New York City were to swap out its income, property, and general corporation taxes with a land value tax, a LVT rate of 21.6% would be needed to maintain the level of tax revenue."},{"id":"121669933","slug":"the-marginal-benefits-in-output-of-a-1-increase-in-land-tax-rates-remain-large-un","sources":[{"slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land"}],"lede":"“Policymakers can consider a range of different sizes of land tax reforms. We show that the relationship between the land tax rate and the resulting gain in output is monotonically increasing but tapers off as the tax rate rises. In other words, the greatest incremental benefits of a 1 percentage point increase in the tax rate are realized at today’s very low rates, but for the case of LAVT they remain large up through a tax rate of around 10%. Policymakers will of course trade off these economic gains with political considerations, because very high tax rates may be difficult to implement. But in this trade-off, a key consideration is that the output gains of the reform would become so large in due course, and that therefore the number of winners and the size of their gains would be so large, that some relief for deserving losers would then become quite easy to finance.”","tags":[{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752"},{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"The marginal benefits in output of a 1% increase in land tax rates remain large until a tax rate around 10%, after which the output gains taper off."},{"id":"121817892","slug":"denmark-has-used-land-value-taxation-since-1924-the-rate-ranges-from-0-6-to-2-4-o","sources":[{"slug":"a-land-value-tax-for-london"}],"lede":"The report for LVT in London comments: “Such a tax raises the cost of holding developable land when demand, as expressed through rising market prices, increases. This should make holding valuable land more expensive as development pressure increases, encouraging more land release for development.”","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"precedents","name":"Precedents","id":"121744884"}],"title":"Denmark has used land value taxation since 1924. The rate ranges from 0.6 to 2.4% on the land's estimated market value, payable to local authorities/country, and the land value is revalued every two years."},{"id":"121817863","slug":"finland-uses-a-land-value-tax-the-rate-on-land-with-buildings-ranges-from-0-5-to","sources":[{"slug":"a-land-value-tax-for-london"}],"lede":"“The most recent amendment [to the system] also contains a new section providing for a special ‘penalty tax’ on vacant lots in urban areas, raising their tax rate to 1.0 to 3.0 per cent, representing at the highest end a trebling of the normal tax. The purpose, of course, is to bring such lots into the market or spur their owners to develop them.”","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"precedents","name":"Precedents","id":"121744884"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Finland uses a land value tax. The rate on land with buildings ranges from 0.5 to 1% of land value, with lower rates for land with permanent housing, higher rates for land used as summer cottages, and a ‘penalty’ rate of 3% on vacant lots in urban areas."},{"id":"121817871","slug":"estonia-introduced-a-land-value-tax-in-1993-while-the-tax-is-national-the-rates-a","sources":[{"slug":"a-land-value-tax-for-london"}],"lede":"“Tax revenues from land continue to rise and increased by 171 per cent between 1994 and 1999. Much of this increase arose from revaluations, raising tax rates and improvements in collection efficiency. Reportedly, the imposition of land tax has ‘encouraged some property owners who stood to benefit by keeping their land idle… either to develop it or to sell it.’”","tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"precedents","name":"Precedents","id":"121744884"}],"title":"Estonia introduced a land value tax in 1993. While the tax is national, the rates annually determined by municipalities, who receive 100% of the revenue. Rates range from 0.5 to 2% of the market value of land. Agricultural land is taxed less."},{"id":"121817862","slug":"the-city-of-harrisburg-pennsylvania-offers-a-strong-example-of-a-successful-land","sources":[{"slug":"a-land-value-tax-for-london"}],"lede":"Harrisburg enacted a LVT in 1975, reducing tax on buildings to one-half of those on land, and eventually increased the tax on land to six times that on property. From 1982 to 2009, there was $4.8 billion in new investments, businesses increased, and over 40,000 building permits were issued. The tax base went from $212 million to $1.6 billion, the number of residential units shot up, the crime rate went down 46%, and the number of vacant structures dropped by 80%.","tags":[{"slug":"precedents","name":"Precedents","id":"121744884"},{"slug":"urban-development","name":"Urban Development","id":"99017961"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"The city of Harrisburg, Pennsylvania, offers a strong example of a successful land value tax."}]}},{"id":"69359365","slug":"codetermination","title":"Codetermination","publishedStatus":"featured","datePublished":"2021-12-18","_updatedAt":"2023-02-20T15:15:21-05:00","heroLede":"Most American workers have no power in the workplace, leaving them with little say in the decisions that govern their everyday lives. Could codetermination deliver a form of economic democracy that benefits workers and firms alike?","heroImage":{"id":"46845324","url":"https://www.datocms-assets.com/42525/1654473830-codetermination-hero-bg-white.jpg","alt":null,"title":null,"responsiveImage":{"src":"https://www.datocms-assets.com/42525/1654473830-codetermination-hero-bg-white.jpg?auto=format&q=40&w=2500","alt":null,"aspectRatio":1.9921874999999998,"base64":"data:image/jpeg;base64,/9j/4AAQSkZJRgABAQAAAQABAAD/2wCEAAoHBwgHBgoICAgLCgoLDg4aDg0NFhEOFg0NFxYZGBYfIhUaHysjHR0oHRUWJDUlKC0vMjIyGSI4PTcwPCsxMi8BCgsLDg0OHA0QHDsoIig7Ly8vLy87OzsvLy8vLy8vLy8vLy87Ly8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vLy8vL//AABEIAA0AGAMBIgACEQEDEQH/xAAYAAACAwAAAAAAAAAAAAAAAAAEBQACB//EABwQAAIDAQADAAAAAAAAAAAAAAEDAAIEEQUSIf/EABYBAAMAAAAAAAAAAAAAAAAAAAECA//EABcRAAMBAAAAAAAAAAAAAAAAAAABAhH/2gAMAwEAAhEDEQA/ANd06qpWSIvV5T3vyMXZ13WeiArxKDPgiUmAMGsGvZJUpoKySil4A//Z","bgColor":"#f5c55a","height":1254,"width":2500}},"heroImageUsesCodedBackground":true,"stContent":{"value":{"schema":"dast","document":{"type":"root","children":[{"type":"heading","level":2,"children":[{"type":"span","value":"What Is Codetermination?"}]},{"item":"121543982","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"In the modern American corporation, workers have no say in decision-making processes. Control over a corporation’s governance—how to spend its profits, how to mitigate recessions—lies in the hands of owners, shareholders, and executives, and those decisions are guided by the directive to maximize value for shareholders."}]},{"type":"paragraph","children":[{"type":"span","value":"For as long as the doctrine of maximizing shareholder value (MSV) has dominated corporate governance, "},{"item":"69608831","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"executive pay has soared relative to workers’"}]},{"type":"span","value":", and the bargaining power of workers has continued to decline. Businesses have also begun "},{"item":"121775831","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"reinvesting less of their profits back into the business"}]},{"type":"span","value":", opting instead for practices such as "},{"item":"121564458","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"stock buybacks"}]},{"type":"span","value":" and dividends over those of capital reinvestment, research and development, or raising wages."}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Codetermination would give workers the right to vote by mandating that a portion of seats on decision-making boards of large companies be held by worker-elected representatives."}]},{"type":"paragraph","children":[{"type":"span","value":"Just as constituents of a given district elect representatives to reflect their interests in the public decision-making process, workers would democratically elect representatives to the corporate boardroom who would hold decision-making power alongside the representatives of company shareholders."}]},{"type":"paragraph","children":[{"type":"span","value":"Codetermination, which is already common across major European countries, "},{"item":"121544455","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"enjoys broad support among Americans"}]},{"type":"span","value":", including "},{"item":"121525695","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"majority support in every state"}]},{"type":"span","value":". It is an application of economic democracy that has the potential to address a broad array of issues, including boosting worker power, improving the flow of information within firms, redirecting business investment towards more productive and less extractive ends, and "},{"item":"96354611","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"mitigating the negative effects of corporate power on the democratic process"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"But what works in Europe would not necessarily work in the United States. Questions remain as to whether codetermination would be a good fit for the American economy. Would giving workers voting power create gridlocks in corporate decision-making that stifle the American economy’s dynamism and innovation? Could there be more effective ways of enhancing workers’ bargaining power?"}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Proposals differ on:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"The percentage of corporate board seats to be held by worker representatives."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"The eligibility criteria determining which companies are subject to the mandate."}]}]}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Advocates argue that codetermination could:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Help transition our economy from a \"shareholder\" economy to a \"stakeholder\" economy."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Strengthen our commitment to democracy by extending democratic principles into the workplace."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Reduce the disparity between worker and executive pay."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Reduce the rate of stock buybacks and dividends, redirecting profits towards more productive allocations."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Reduce information asymmetries between employers and employees, which would improve efficiency and productivity, strengthen trust, and create more adaptive and competitive firms."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Raise job satisfaction and improve working conditions."}]}]}]},{"type":"paragraph","children":[{"type":"span","marks":["strong"],"value":"Skeptics argue that codetermination could:"}]},{"type":"list","style":"bulleted","children":[{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Give workers too much power, reducing capital investment and leading to inefficient over-investments in worker benefits."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Create friction and inefficiencies in corporate decision-making that ultimately reduce firm performance."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Be affected by American corporate governance laws such that the benefits of codetermination are dampened and the negative consequences amplified."}]}]},{"type":"listItem","children":[{"type":"paragraph","children":[{"type":"span","value":"Undermine the innovation that drives American economic dynamism."}]}]}]},{"type":"paragraph","children":[{"type":"span","value":"What does the evidence say?"}]},{"type":"heading","level":2,"children":[{"type":"span","value":"Effects of Codetermination on Growth"}]},{"item":"121543983","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Recent studies suggest that European codetermination has had no negative economic effects. In some cases, small positive effects have been observed."}]},{"type":"paragraph","children":[{"type":"span","value":"Across a variety of existing studies, "},{"item":"121544451","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"most agree that European codetermination has had no negative impact on the economy"}]},{"type":"span","value":". While there are tenuous suggestions that codetermination may have minor positive effects, the consistent absence of negative effects is the more prominent finding."}]},{"type":"paragraph","children":[{"type":"span","value":"In Germany, studies found that codetermination had "},{"item":"121539935","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"no significant influence on stock prices"}]},{"type":"span","value":", "},{"item":"121543299","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"profits"}]},{"type":"span","value":", or "},{"item":"121543380","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"workers' wages"}]},{"type":"span","value":". Nor did the threat of codetermination "},{"item":"121543421","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"deter German firms from incorporating"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In Finland, codetermination had "},{"item":"69613359","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"no negative effects on profitability"}]},{"type":"span","value":" or "},{"item":"72743598","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"firm survival rates"}]},{"type":"span","value":". Nor did Finnish firms "},{"item":"69609950","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"attempt to avoid being subject to the codetermination laws"}]},{"type":"span","value":", such as by changing their firm size to remain below the threshold of 150 employees that determines what companies must comply with codetermination. In fact, Finnish codetermination is "},{"item":"72742950","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"associated with a slightly positive effect on capital formation"}]},{"type":"span","value":" (the overall accumulation of capital assets such as equipment, tools, transportation, or other physical assets)."}]},{"type":"paragraph","children":[{"type":"span","value":"In Sweden, "},{"item":"121564515","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"only 5% of corporate directors reported that codetermination had a negative impact on company activities"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Overall, according to a "},{"url":"https://www.economicpossibility.org/sources/what-does-codetermination-do","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"2021 survey paper"}]},{"type":"span","value":","}]},{"item":"121543984","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"A rising chorus of voices are therefore beginning to suggest that, on the basis of the latest evidence, codetermination does not appear to have any negative economic effects. Earlier studies did, however find potential negative impacts."}]},{"type":"paragraph","children":[{"type":"span","value":"A study from 2000 (updated 2021) found that relative to firms with one-third codetermination, "},{"item":"121544257","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"firms with equal codetermination (half of corporate board seats held by worker-elected representatives) had a 26% decline in market-to-book ratio"}]},{"type":"span","value":". In equal-codetermination firms, employees used their power to "},{"item":"121544251","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"increase employees-to-sales and wage-bill-to-sales ratios"}]},{"type":"span","value":", suggesting a resistance to firm restructuring."}]},{"type":"paragraph","children":[{"type":"span","value":"In 1993, one of the earliest attempts to quantify the economic effects of codetermination found strong negative economic consequences following the enactment of Germany’s 1976 laws, which increased the portion of supervisory board seats held by worker representatives from one-third to half. These findings included "},{"item":"121525656","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"declines in profitability, productivity"}]},{"type":"span","value":", and "},{"item":"121525658","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"return on shareholder equity"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Passing codetermination laws in European countries is associated, cautiously, with higher productivity"}]},{"type":"paragraph","children":[{"type":"span","value":"A "},{"url":"https://www.economicpossibility.org/sources/participatory-and-self-managed-firms-evaluating-economic-performance","meta":[{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"1982 survey of empirical work"}]},{"type":"span","value":" on employee participation in management concluded:"}]},{"item":"121564659","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Since then, however, studies have generally found either no effect or modest positive effects on productivity."}]},{"type":"paragraph","children":[{"type":"span","value":"In Germany, "},{"item":"121564657","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination increased labor productivity (value added per employee increased by 16%–21%), but had no effect on total factor productivity."}]},{"type":"span","value":" In particular, the 1976 strengthening of the laws, which increased the portion of seats held by worker representatives from one-third to half, "},{"item":"121540684","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"had a small but positive effect on productivity"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In Finland, "},{"item":"72743409","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination is associated with both small increases in labor productivity"}]},{"type":"span","value":" and a "},{"item":"69648340","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"small increase in total factor productivity"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In France, a study comparing labor-managed and conventionally managed firms found that"},{"item":"122007430","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" firms owned and managed by workers are generally at least as productive, if not more so, than their conventional counterparts"}]},{"type":"span","value":". Labor-managed firms may even"},{"item":"122007431","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" use their technological inputs more efficiently"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"In European countries, codetermination has neutral or mildly positive effects on wages. But in the American context, where workers have less bargaining power to begin with and more to gain, the effects may be larger."}]},{"type":"paragraph","children":[{"type":"span","value":"Codetermination could affect wages in at least two different ways: raising the wage bottom by giving lower-income workers more bargaining power to negotiate higher wages, or lowering the top, since workers with voting power are less likely to approve exorbitant executive compensation and bonuses."}]},{"type":"paragraph","children":[{"type":"span","value":"In European, such wage effects of codetermination appear to have been either minimal or not materialized at all. In Germany, "},{"item":"121543380","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination had no effect on raising the lowest wages"}]},{"type":"span","value":". In Finland, "},{"item":"72745966","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination raised wages slightly for the lowest earners within firms"}]},{"type":"span","value":", mildly reducing overall wage inequality."}]},{"type":"paragraph","children":[{"type":"span","value":"In Norway, broad findings suggest that adopting codetermination "},{"item":"121260239","type":"itemLink","children":[{"type":"span","value":"had no direct impact"}]},{"type":"span","value":" on wages. Although workers at "},{"item":"121525072","type":"itemLink","children":[{"type":"span","value":"codetermined firms are paid more"}]},{"type":"span","value":" and face "},{"item":"121525066","type":"itemLink","children":[{"type":"span","value":"less earnings risk"}]},{"type":"span","value":", these effects more likely "},{"item":"121525077","type":"itemLink","children":[{"type":"span","value":"stem from other factors correlated with codetermination"}]},{"type":"span","value":", such as larger firm size or higher unionization rates:"}]},{"item":"121565056","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"But, in countries such as the US, where workers have significantly less bargaining power than in European countries, codetermination may have a stronger effect on wages. In the US, workers at employee-owned businesses "},{"item":"121542876","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"receive 5%–12% higher wages than workers at traditionally owned companies, have twice the retirement accounts, and are 25% less likely to be laid off"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Existing evidence does not support the concern that codetermination may lead to decision-making gridlock. In Europe, executives and workers alike report positive experiences, unimpeded decision-making, and improved relations."}]},{"type":"paragraph","children":[{"type":"span","value":"One criticism of workplace democracy—which codetermination helps to implement—is that "},{"item":"121543293","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"it might introduce the same gridlock"}]},{"type":"span","value":" that plagues the legislative branches of many democratic governments, that of the United States in particular."}]},{"type":"paragraph","children":[{"type":"span","value":"But evidence from abroad would seem to alleviate this concern. The European experience with codetermination suggests that "},{"item":"95835658","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"the structural arrangement it implements has aligned the interests of workers and management and built empathy across stakeholders"}]},{"type":"span","value":". By improving the communication of information between workers and managers (also known as reducing information asymmetry), codetermination may even boost growth."}]},{"type":"paragraph","children":[{"type":"span","value":"In Germany, "},{"item":"121542882","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a 1998 commission unanimously concluded that codetermination improves information flow between management and works, deepening trust between them."}]},{"type":"span","value":" Furthermore, a study of German innovation under codetermination found that "},{"item":"121543284","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"an \"overwhelming majority\" of codetermined supervisory board decisions were unanimous"}]},{"type":"span","value":". It concluded that there was"},{"item":"121543267","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" no evidence that codetermination reduced innovation, and that there might even be a positive relation between them"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In Sweden, where union participation and codetermination are closely related, "},{"item":"121540955","type":"itemLink","children":[{"type":"span","value":"86% of managing directors reported"}]},{"type":"span","value":" that union participation did not contribute to conflict or slowing down of company operations, and "},{"item":"69648555","type":"itemLink","children":[{"type":"span","value":"76% of corporate directors reported"}]},{"type":"span","value":" positive experiences with codetermination. Only "},{"item":"121564515","type":"itemLink","children":[{"type":"span","value":"5% of corporate directors reported"}]},{"type":"span","value":" that codetermination had a negative impact on company activities."}]},{"item":"121565057","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Some limited evidence suggests that codetermination may have either a neutral or positive effect on innovation."}]},{"type":"paragraph","children":[{"type":"span","value":"One concern about codetermination in the US is that it would stifle the innovation that makes the American economy so dynamic. The concern is that, by granting worker-elected representatives voting rights, a firm’s decision-making process might grow increasingly contested, slowing overall activity."}]},{"type":"paragraph","children":[{"type":"span","value":"In Europe, recent studies do not support this concern. Studies of German codetermination "},{"item":"121543267","type":"itemLink","children":[{"type":"span","value":"found strong evidence for a positive relationship"}]},{"type":"span","value":" between codetermination and innovation. A study spanning the US, UK, India, France and Germany of how legislation for employee representation affected innovation "},{"item":"121544269","type":"itemLink","children":[{"type":"span","value":"also found a positive association between employee representation and innovation"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Practically speaking, it is reasonable to imagine that codetermination might slow innovation by creating more friction in the decision-making process, introducing more gridlock between labor and management. Overall, however, the European experience reports that "},{"item":"95060900","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination avoids gridlock"}]},{"type":"span","value":" while improving information flow, ultimately enhancing the decision-making process."}]},{"type":"paragraph","children":[{"type":"span","value":"And in 2018, "},{"item":"143363843","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"the World Economic Forum ranked Germany as the world’s most innovative economy, beating out the US in second"}]},{"type":"span","value":" place."}]},{"type":"paragraph","children":[{"type":"span","value":"That said, how much of the prospective American experience with codetermination might be inferred from European experiences is unclear, and we have little direct evidence from which to project the potentially unique effects of codetermination on the American economy."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Increasingly, a large proportion of corporate profits are being invested in stock buybacks and dividends—a shift away from more traditional, productive investments. By granting voting power to workers, codetermination could provide a checks-and-balances system against such “short-termism,” rebalancing corporate investment towards investments that benefit all stakeholders, not just shareholders."}]},{"type":"paragraph","children":[{"type":"span","value":"In the US, some advocates of codetermination see it as a guard against “short-termism,” or the tendency to prioritize short-term profits for shareholders over longer-term investments. Codetermination could empower workers to function as a check against executives seeking to repurchase shares, a practice known as "},{"type":"span","marks":["emphasis"],"value":"stock buybacks."}]},{"type":"paragraph","children":[{"type":"span","value":"Buybacks have been "},{"item":"121765930","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"widely criticized for drawing significant funds away from capital investment"}]},{"type":"span","value":", workplace improvements, wages, and research and development. Although "},{"item":"121765911","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"buybacks may have a role as part of efficient corporate strategy"}]},{"type":"span","value":", an analysis by SEC Commissioner Robert Jackson finds that "},{"item":"121765901","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"buybacks are instead often exploited by executives for personal gain"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Stock buybacks in the US have skyrocketed since 1982, "},{"item":"121525299","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"when regulatory limits on open-market share repurchasing were lifted"}]},{"type":"span","value":". In 1981, "},{"item":"121564458","type":"itemLink","children":[{"type":"span","value":"S&P 500 companies spent 2% of profits on buybacks. By 2017, they were spending 59%"}]},{"type":"span","value":". Between 2015 and 2017, companies in "},{"item":"121765949","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"the restaurant industry spent 136.5% of net profits on stock buybacks"}]},{"type":"span","value":", suggesting that they financed buybacks through debt or cash reserves."}]},{"type":"paragraph","children":[{"type":"span","value":"Even though one should keep in mind the disparities in scale between the US and Germany’s economies when considering comparisons between them, "},{"item":"121525652","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Germany—where codetermination is in place—had 210 stock buybacks between 1998 and 2014, compared to 11,096 in the US over the same time period."}]}]},{"type":"paragraph","children":[{"type":"span","value":"The rise of buybacks in the US is strongly associated with our heavy reliance on stock-option-based compensation. "},{"item":"121525249","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Firms that rely more on such compensation packages are significantly more likely to repurchase shares"}]},{"type":"span","value":". When executives receive stock options as part of their compensation package, the total number of company shares increases, diluting their value. "},{"item":"121544261","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Stock buybacks are often used to counteract this dilution"}]},{"type":"span","value":", by reducing the overall number of available shares. Giving workers voting rights—on matters including stock buybacks—could serve as a check against relying too heavily on these practices if they draw too much capital away from ends that benefit a broader group of stakeholders."}]},{"type":"paragraph","children":[{"type":"span","value":"In March 2016, Laurence Fink, the CEO of BlackRock, wrote the following in a letter to the executives of S&P 500 firms:"}]},{"item":"121565212","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","marks":["strong"],"value":"As recent research suggests a positive relationship between political democracy and growth, advocates suggest the same relationship may exist between economic democracy and growth. To date, however, there is little research on the direct effects of economic democracy on GDP."}]},{"type":"paragraph","children":[{"type":"span","value":"Orthodox theory and evidence suggested that political democracy and growth are in tension. Recent empirical evidence finds the opposite: "},{"item":"121544287","type":"itemLink","children":[{"type":"span","value":"there exists a positive and significant correlation between democracy and future GDP per capita"}]},{"type":"span","value":". The authors find that "},{"item":"121544291","type":"itemLink","children":[{"type":"span","value":"democracy may encourage growth through economic reforms, increasing human capital, increasing investment, and reducing social unrest"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Advocates suggest "},{"item":"121543527","type":"itemLink","children":[{"type":"span","value":"these same mechanisms may encourage a positive relationship between economic democracy and growth, especially in the realms of productivity, human capital, and job satisfaction"}]},{"type":"span","value":", though we have scant empirical evidence to support the hypothesis."}]},{"type":"heading","level":2,"children":[{"type":"span","value":"Effects Codetermination on Stability"}]},{"item":"121565213","type":"block"},{"item":"121594015","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Across the EU and OECD countries, codetermination is associated with reductions in income inequality, and reductions in the highest incomes. But it’s unclear whether codetermination is a causal mechanism, or merely correlated with related factors such as firm size and unionization rates."}]},{"type":"paragraph","children":[{"type":"span","value":"Across EU and OECD countries, "},{"item":"121540498","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"higher levels of codetermination are correlated with reductions in income inequality"}]},{"type":"span","value":". Specifically, decreases in the "},{"item":"121540331","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"income share of top earners"}]},{"type":"span","value":". Across EU countries, "},{"item":"121540477","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination has a stronger correlation with reductions in national income inequality than with trade union density"}]},{"type":"span","value":"."}]},{"item":"121594016","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"As before, although comparisons between Germany and the US must take into account their disparities in economic scale, some researchers point to differences between the two as evidence of how codetermination may help balance inequality and short-termism. "},{"item":"121542884","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"In 2015, the typical German CEO made $5.6 million, while their US counterparts made $14.9 million"}]},{"type":"span","value":". Additionally, "},{"item":"121542888","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"stock options comprise 24% of average German CEO pay, while in the US, they comprise 63%"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Codetermination has either neutral or mildly positive impacts on wages in Europe. But since codetermination arose in European countries that already had strong worker institutions, we might expect stronger wage effects in the US, where worker institutions are significantly weaker."}]},{"type":"paragraph","children":[{"type":"span","value":"The amount of voting power conferred by codetermination matters, and it varies by country. In Germany, where codetermination confers the most voting power, a study found that codetermination"},{"item":"121543380","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" had no impact on the lowest wages"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In Finland, where codetermination confers less voting power, "},{"item":"72745966","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"wages for the lowest earners rose by roughly 5%–7%"}]},{"type":"span","value":", reducing overall wage inequality within firms, but "},{"item":"72743889","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"executive compensation remained unchanged"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Finnish worker representatives also reported f"},{"item":"73833354","type":"itemLink","children":[{"type":"span","value":"eeling powerless to affect company decisions"}]},{"type":"span","value":" regarding wages."}]},{"type":"paragraph","children":[{"type":"span","value":"In Norway, "},{"item":"121525072","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"workers at codetermined firms experience higher wages"}]},{"type":"span","value":" along with "},{"item":"121525066","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"less earnings risk during recessions"}]},{"type":"span","value":". But the cause of the positive correlation between codetermination and wages "},{"item":"121525077","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"appears to be related factors such as firm size and unionization"}]},{"type":"span","value":", rather than codetermination itself."}]},{"type":"paragraph","children":[{"type":"span","value":"Importantly, we should not assume that codetermination would affect American and European wages in the same way. European countries with codetermination laws had significant preexisting pro-worker institutions, ranging from centralized collective bargaining to high union coverage. "},{"item":"121544448","type":"itemLink","children":[{"type":"span","value":"Much of codetermination’s potential impact on wages might therefore have already been previously brought about"}]},{"type":"span","value":" by these institutions."}]},{"item":"121594018","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"In 2015, only 7.2% of US private sector workers "},{"item":"95835630","type":"itemLink","children":[{"type":"span","value":"were covered under collective bargaining agreements"}]},{"type":"span","value":", compared with 50.2% in Germany and over "},{"item":"121543877","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"80% across the rest of Western Europe"}]},{"type":"span","value":". In the US, union membership covered a third of Americans in the 1950’s, but had declined to 10.7% in 2021. Given the lack of other channels for bargaining power in the US, codetermination may have more pronounced effects here."}]},{"type":"paragraph","children":[{"type":"span","value":"So how might codetermination affect wages in the US? One reference point is worker-owned cooperatives in the US, where "},{"item":"121542876","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"employees receive 5%–12% higher wages, have twice the retirement accounts, and are 25% less likely to be laid off"}]},{"type":"span","value":"."}]},{"item":"146427371","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Codetermination is associated with slight positive effects on job satisfaction."}]},{"type":"paragraph","children":[{"type":"span","value":"In theory, codetermination is "},{"item":"121543527","type":"itemLink","children":[{"type":"span","value":"expected to raise job satisfaction. In practice, however, job satisfaction is difficult to measure"}]},{"type":"span","value":", and requires data to be collected over long periods of time. A survey of Finnish workers suggests that implementation of "},{"item":"72746108","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"worker representation slightly improved workers’ perceptions of the quality of their jobs"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"A 2021 survey of the existing evidence concluded that overall, codetermination might be associated with "},{"item":"96360615","type":"itemLink","children":[{"type":"span","value":"either nonexistent or slight improvements in job satisfaction"}]},{"type":"span","value":" and other elements of worker welfare."}]},{"type":"paragraph","children":[{"type":"span","value":"In the US, a nationally representative survey in 2020 found that "},{"item":"121543444","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Americans prefer to work at democratic firms because they intrinsically value having more power in the workplace"}]},{"type":"span","value":". The prospect of codetermination "},{"item":"121525618","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"raises the probability of employees preferring to work at a firm by 7%"}]},{"type":"span","value":", and Americans report that "},{"item":"121525624","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"they value economic democracy equivalently to a wage increase of $20 per hour."}]}]},{"type":"heading","level":5,"children":[{"type":"span","value":"The amount of power that codetermination grants workers depends on policy details, such as the portion of seat on the board to be held by worker representatives. Across Europe, existing codetermination laws grant workers a minority voting position, limiting their power."}]},{"type":"paragraph","children":[{"type":"span","value":"Most existing codetermination mandates grant a minority share of voting rights to worker representatives, meaning that they can be overruled by united shareholder votes. Even in Germany, where workers at large corporations hold 50% of supervisory board seats, shareholders receive a tie-breaking vote."}]},{"type":"paragraph","children":[{"type":"span","value":"A 2021 survey of codetermination across the EU found that existing codetermination laws "},{"item":"96360237","type":"itemLink","children":[{"type":"span","value":"give workers variable amounts of power in three areas of governance"}]},{"type":"span","value":": moderate influence over working conditions, minor influence in layoff decisions, and minor influence over wage setting."}]},{"type":"paragraph","children":[{"type":"span","value":"There is “"},{"item":"121544436","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"nearly unanimous agreement that worker representatives have no influence on broad strategic decisions, even when they sit on company boards"}]},{"type":"span","value":".” Fewer than 5% of Finnish worker-representatives believe they can affect strategic decisions. Instead, worker-representatives feel that such decisions are made away from their view, and presented only once management’s mind is already made up. "},{"url":"/a034a3ed5d1f4a3abc98df986de3350c","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"link","children":[{"type":"span","value":"76%"}]},{"item":"69609552","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":" of worker representatives say worker representation feels like a formality, and 65% believe the rights of worker representatives are too narrow"}]},{"type":"span","value":"."}]},{"item":"121594019","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"Codetermination may provide a durable institution that protects the democratic process from extreme corporate accumulations of wealth and power"}]},{"type":"paragraph","children":[{"type":"span","value":"A long-standing concern in American politics has been the destabilizing effect of large accumulations of wealth and power on the democratic process. Concentrated corporate wealth raises the risk that private corporations may wield outsized power, undermining democratic institutions."}]},{"type":"paragraph","children":[{"type":"span","value":"Some see "},{"item":"95853420","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination as a strategy for preserving democratic institutions"}]},{"type":"span","value":" within a landscape of rising corporate power. By allowing employees to elect a significant portion of corporate directors, "},{"item":"96354511","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination can function similarly to the Constitutional separation of powers"}]},{"type":"span","value":". Democratizing corporate decision-making may also democratize corporate speech, broadening the array of interests it represents."}]},{"item":"121594020","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"The American people, Democrats and Republicans alike, want codetermination."}]},{"type":"paragraph","children":[{"type":"span","value":"Recent polls suggest that codetermination enjoys bipartisan support. One nationally representative survey found that "},{"item":"121525695","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a majority of likely voters in every state—including Trump voters in all but four states—support codetermination"}]},{"type":"span","value":". On the whole, "},{"item":"121544455","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"52% of likely U.S. voters reported supporting codetermination, while only 23% opposed"}]},{"type":"span","value":" it."}]},{"type":"paragraph","children":[{"type":"span","value":"In 2020, prominent conservatives "},{"item":"121525189","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"cosigned a statement in support of creating organized labor institutions, including codetermination, that give workers a “seat at the table"}]},{"type":"span","value":".” Signatories included Marco Rubio (US senator), Jeff Sessions (former US attorney general), Oren Cass (executive director of American Compass), Jonathan Berry (former acting secretary for policy, US Department of Labor), and Richard Schubert (former chairman, National Job Corps Association)."}]},{"type":"paragraph","children":[{"type":"span","value":"But support for codetermination was not always widespread. "},{"item":"121539860","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"In the 1970s, American unions generally opposed codetermination"}]},{"type":"span","value":". But while Americans have a long, polarized history with unionization, relatively new policies like codetermination may carry less political baggage. Recent surveys suggest that applications of workplace democracy - including codetermination, employee stock ownership plans, and management elections - "},{"item":"121544454","type":"itemLink","children":[{"type":"span","value":"are less polarizing than unionization"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"European managers, executives, and workers all report widely positive experiences with codetermination"}]},{"type":"paragraph","children":[{"type":"span","value":"In Sweden, "},{"item":"69648555","type":"itemLink","children":[{"type":"span","value":"76% of corporate managing directors report"}]},{"type":"span","value":" positive experiences with codetermination. "},{"item":"95060900","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"81% of managing directors reported that it did not hinder effective decision-making"}]},{"type":"span","value":", and "},{"item":"121564515","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"only 5% reported that it had a negative impact on company activities"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Notably, the larger the company, "},{"item":"121541011","type":"itemLink","children":[{"type":"span","value":"the more likely the managing directors were"}]},{"type":"span","value":" to have positive views of codetermination."}]},{"type":"paragraph","children":[{"type":"span","value":"In Germany, "},{"item":"121542882","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"a 1998 commission unanimously concluded that codetermination deepened trust between management and labor"}]},{"type":"span","value":", improving information flow. Anecdotally, "},{"item":"121543284","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"the “overwhelming majority” of supervisory board decisions under German codetermination are unanimous"}]},{"type":"span","value":"."}]},{"type":"heading","level":5,"children":[{"type":"span","value":"Where implemented, codetermination has proven to be a remarkably stable institution."}]},{"type":"paragraph","children":[{"type":"span","value":"Of the 14 European countries that "},{"item":"95341925","type":"itemLink","children":[{"type":"span","value":"implemented codetermination, only two—Hungary, and the Czech Republic—walked it back"}]},{"type":"span","value":". Even so, Hungary retained codetermination for firms with two-tier boards (most firms in Hungary), and the Czech Republic, after abolishing mandatory codetermination in 2014, reintroduced the policy in 2017 for large firms with at least 5,000 employees."}]},{"type":"paragraph","children":[{"type":"span","value":"Given the array of possible strategies a society could use to curb excessive corporate political power, "},{"item":"95341864","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"corporations themselves might prefer codetermination over alternatives"}]},{"type":"span","value":" such as high corporate income tax rates, or rigorous antitrust regulation."}]},{"type":"paragraph","children":[{"type":"span","value":"Advocates also suggest that "},{"item":"95342014","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"codetermination could help a society weather unexpected shocks"}]},{"type":"span","value":", such as COVID-19, by serving as a mechanism through which firms and employees could take coordinated action to mitigate worker/employer conflicts of interest."}]},{"type":"heading","level":2,"children":[{"type":"span","value":"Implementation"}]},{"item":"121594283","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"The effects of codetermination might also significantly depend on the larger environment of organized labor institutions, or lack thereof. Related institutions, such as sectoral collective bargaining and union representation can both complement codetermination, and supply its practical infrastructure."}]},{"item":"121594284","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"The lack of organized labor institutions in the US relative to Europe presents at least two challenges for implementing codetermination. First, the lack of "},{"item":"96360198","type":"itemLink","children":[{"type":"span","value":"other pro-worker channels suggests that codetermination may have greater economic effects"}]},{"type":"span","value":", whether positive or negative. In 2015, only 7.2% of US private sector workers were covered under collective bargaining agreements, "},{"item":"95835630","type":"itemLink","children":[{"type":"span","value":"compared to 50.2% in Germany"}]},{"type":"span","value":"."}]},{"item":"121594285","type":"block"},{"type":"paragraph","children":[{"type":"span","value":"Second, the practical implementation of codetermination in Europe often relies integrally on elements of existing labor networks, such as the widespread presence of union representatives. Without such preexisting infrastructure, "},{"item":"96360148","type":"itemLink","children":[{"type":"span","value":"there is little precedent in the US for how the logistics of codetermination might actually work"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"Proponents of economic democracy who seek to boost the bargaining power of workers could therefore consider—in addition to codetermination—implementing institutions such as stronger union representation or sectoral collective bargaining. "},{"item":"96360083","type":"itemLink","children":[{"type":"span","value":"Such institutions could not only complement codetermination, but also supply and develop its practical infrastructure"}]},{"type":"span","value":"."}]},{"item":"121594297","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"US corporate law is more flexible than European corporate law, and the American business environment is more active in mergers, acquisitions, and buybacks. A rigid, top-down mandate like codetermination might therefore have more pronounced consequences in the US."}]},{"type":"paragraph","children":[{"type":"span","value":"Significant differences between US and European corporate law and business dynamics suggest that while codetermination fits well with the European ethos, it may cause more conflict when applied to the U.S."}]},{"type":"paragraph","children":[{"type":"span","value":"US corporate law draws heavily on Delaware law, and is characterized by its flexibility and reliance on default rules (rules that apply in the absence of an agreement by relevant parties to be governed by a different rule). This is in contrast to German corporate law, which relies heavily on mandatory law."}]},{"type":"paragraph","children":[{"type":"span","value":"This contrast leads to significantly differing business activities. Between 1981 and 2010, "},{"item":"95342061","type":"itemLink","children":[{"type":"span","value":"there were only 338 mergers in Germany"}]},{"type":"span","value":". Over the same period in the US, there were 60,244. Similarly, "},{"item":"121525652","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"between 1998 and 2014, Germany had 210 stock buybacks, compared to 11,096 in the US"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":"In Europe, evidence from "},{"item":"121543421","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Germany"}]},{"type":"span","value":" and "},{"item":"69609950","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Finland"}]},{"type":"span","value":" suggests that firms do not attempt to dodge codetermination mandates, such as by altering their business structures or reincorporating abroad. But "},{"item":"95835185","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"concerns remain"}]},{"type":"span","value":" that, since US firms might have more to lose from being subjected to rigid mandates, such behavior may be more likely."}]},{"type":"paragraph","children":[{"type":"span","value":"As a result, "},{"item":"95060840","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"successfully implementing codetermination in the U.S. may require additional corporate governance laws"}]},{"type":"span","value":", further reducing overall legal flexibility."}]},{"item":"121594362","type":"block"},{"type":"heading","level":5,"children":[{"type":"span","value":"In Germany, codetermination arose from the bottom up as negotiated agreements between workers and employers. Only after widespread uptake did the federal government ratify codetermination as a mandate from above."}]},{"type":"paragraph","children":[{"type":"span","value":"Such bottom-up implementation of codetermination could also be possible in the US. Currently, any group of employees in the U.S. could negotiate with their employer to immediately implement some form of codetermination. During their 2018 strike, "},{"item":"121543891","meta":[{"id":"rel","value":"noopener noreferrer"},{"id":"target","value":"_blank"}],"type":"itemLink","children":[{"type":"span","value":"Google employees demanded to have a worker-elected representative sitting on the board"}]},{"type":"span","value":"."}]},{"type":"paragraph","children":[{"type":"span","value":""}]},{"type":"paragraph","children":[{"type":"span","value":""}]},{"type":"paragraph","children":[{"type":"span","value":""}]},{"type":"paragraph","children":[{"type":"span","value":""}]}]}},"blocks":[{"id":"121543982","variant":"feature","text":"

Most American workers have little say in the workplace, leaving them powerless in workplace decisions that govern their everyday lives.

\n","author":""},{"id":"121543983","sectionSummary":"

Most recent studies of European codetermination are converging on a surprising finding: codetermination appears to have little impact, positively or negatively, on firm performance.

\n\n

Although some studies suggest positive impacts in areas ranging from capital formation to productivity, their authors stress that such positive findings are tenuous.

\n\n

Instead, many advocate the absence of negative effects: Why not try codetermination if it can extend our valued democratic principles to the workplace while doing no harm to the economy?

\n\n

Workers and executives across Europe have had positive experiences with codetermination, suggesting that decision-making gridlock would not be a concern.

\n\n

But the European economic landscape is significantly different from the United States’, and we should not assume the European experience would be replicable in the US. Some argue that codetermination would harm American dynamism, while others argue that America’s meager network of labor institutions relative to Europe’s suggest we might mean that the US would experience larger effects, whether positive or negative.

\n"},{"id":"121543984","variant":"simple","text":"

"The available evidence indicates that the European model of codetermination is neither a panacea for all of the problems faced by 21st-century workers, nor a destructive institution that is dramatically inferior to shareholder primacy. Rather, as currently implemented, it is a moderate institution with, on net, nonexistent or small positive effects."

\n","author":"Jäger, Noy, Schoefer, What Does Codetermination Do? (2021)"},{"id":"121564659","variant":"simple","text":"

There is apparently consistent support for the view that worker participation in management causes higher productivity. This result is supported by a variety of methodological approaches, using diverse data and for disparate time periods.

\n","author":"Derek Jones & Jan Svejnar, Participatory and self-managed firms: Evaluating economic performance (1982)"},{"id":"121565056","variant":"simple","text":"

...while employees do benefit from working in a firm with worker representation, the gains are not driven by worker representation per se, but rather by other factors that are correlated with both worker representation and worker compensation.

\n","author":"Do Employees Benefit From Worker Representation? (Blandhol, Mogstad, Nilsson, & Vestad, 2020)"},{"id":"121565057","variant":"simple","text":"

Laws on codetermination... have made European CEO’s deeply committed to their employees, treating them more like partners in a long-term enterprise than anonymous factors of production.

\n","author":"Herbert A. Henzler, The New Era of Eurocapitalism (1992)"},{"id":"121565212","variant":"feature","text":"

“...in the wake of the financial crisis, many companies have shied away from investing in the future growth of their companies. Too many companies have cut capital expenditure and even increased debt to boost dividends and increase share buybacks.”

\n","author":"Laurence Fink, BlackRock CEO"},{"id":"121565213","sectionSummary":"

European codetermination has proven to be a remarkably stable practice, and is credited with improving relationships and information flows between workers and managers. Although codetermination is associated with only small increases in wages for low earners, it correlates with the shrinking of income inequality via reductions in the income share of top earners.**

\n\n

In the US, codetermination offers one strategy for mitigating the effects of concentrated corporate power on democratic institutions. Importantly, a majority of the American people want codetermination.

\n"},{"id":"121594015","variant":"simple","text":"

Understanding codetermination solely as an instrument to protect employees or to improve corporate governance and/or performance fundamentally underestimates its potential contribution to society.

\n","author":"Dammann & Eidenmueller, Codetermination and the Democratic State (2020)"},{"id":"121594016","image":{"id":"49188693","url":"https://www.datocms-assets.com/42525/1676729928-lep-chart-codetermination-index.png","alt":null,"title":"Source: Hörsich (2012)","responsiveImage":{"src":"https://www.datocms-assets.com/42525/1676729928-lep-chart-codetermination-index.png","alt":null,"aspectRatio":1.5523560209424083,"base64":"data:image/png;base64,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","bgColor":"#f13451","height":2292,"width":3558}}},{"id":"121594018","variant":"simple","text":"

Several important labor market institutions—sectoral collective bargaining, widespread union representation, and extensive regulation—may already capture most of the low-hanging fruit when it comes to affecting worker outcomes, leaving little room for German and Nordic codetermination to make an impact. If this explanation is correct, then codetermination may have larger impacts (either positive or negative) if implemented in contexts like the United States, where these institutions are less powerful...

\n","author":"Jäger, Noy, & Schoefer, What Does Codetermination Do? (2021)"},{"id":"146427371","variant":"simple","text":"

Abraham Shuchman deduced long ago: "[Codetermination could] mark for the people of the world a new course between capitalism and collectivism that leads to a more rational and more just social order." With regard to the twenty-first century, such an outstanding historical relevance cannot be (undisputedly) attributed to codetermination. However, codetermination may possibly contribute to an increasingly socially defined regime, with regard to distributive justice in form of a more equal distribution of incomes.

\n","author":"The Macroeconomic Effect of Codetermination on Income Inequality"},{"id":"121594019","variant":"simple","text":"

The qualitative evidence paints a picture of an institution that gives workers some control over their immediate working conditions, but grants them negligible authority beyond that. Given this characterization, it is unsurprising that codetermination fails to significantly shift major outcomes like wages or investment...Importantly, recent codetermination proposals in the United States and United Kingdom mostly emulate existing codetermination laws, usually by proposing minority board-level representation. If limited power conveyed by minority board-level representation is key to explaining codetermination’s lack of impact, then we should expect the codetermination proposals in the US and UK to have similarly negligible impacts if implemented.

\n","author":"Jäger, Noy, & Schoefer, What Does Codetermination Do? (2021)"},{"id":"121594020","variant":"simple","text":"

There is nothing inherently undemocratic in corporate speech, unless corporations themselves are undemocratic...Citizens United recognized the corporate right to speak in the American public square. Currently, that poses a major problem for our democracy because corporations amplify the voices of a tiny number of the financial and managerial elite—the notorious 1 percent. If companies gave voice to a more diverse and pluralistic set of interests, the fact that corporations speak would not undermine democracy. On the contrary, corporate speech would reflect it.

\n","author":"Dammann & Eidenmueller, Codetermination and the Democratic State (2020)"},{"id":"121594283","sectionSummary":"

Although codetermination has only mild economic effects in Europe, this might be because many of the more likely effects had already been brought about by strong preexisting labor institutions. In the US, where labor institutions are significantly weaker, codetermination might have a stronger impact, whether positive or negative.

\n\n

US corporate law is notably more flexible than European corporate law. Therefore, the implementation of any rigid, top-down mandate might have more pronounced consequences, especially on the rates of mergers, acquisitions, and buybacks.

\n\n

The amount of power that codetermination grants workers, as well as the overall effects that codetermination might have on the economy, significantly depend on the portion of board seats to be held by worker representatives, and the scope of companies subject to the mandate.

\n"},{"id":"121594284","variant":"simple","text":"

While Germany arguably reaps significant benefits from codetermination, legal, social, and institutional differences between Germany and the United States make it highly unlikely that the United States would be able to replicate those benefits. Furthermore, the costs of codetermination would probably be much higher in the United States than they are in Germany.

\n","author":"Dammaann & Eidenmueller, Codetermination: A Poor Fit for U.S. Corporations (2020)"},{"id":"121594285","image":{"id":"49187779","url":"https://www.datocms-assets.com/42525/1676661762-lep-chart-collective-bargaining-coverage.png","alt":null,"title":"Source: Jelle Visser, ICTWSS: Database on Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts in 55 Countries Between 1960 and 2018 (2019)","responsiveImage":{"src":"https://www.datocms-assets.com/42525/1676661762-lep-chart-collective-bargaining-coverage.png","alt":null,"aspectRatio":1.5523560209424083,"base64":"data:image/png;base64,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","bgColor":"#0daedf","height":2292,"width":3558}}},{"id":"121594297","variant":"simple","text":"

Overall, much of the practical infrastructure of codetermination in European countries relies on the near-universal presence and widespread legitimacy of union representatives. There is therefore little precedent for how codetermination might be implemented in the United States, where many workplaces either lack union representatives entirely, or lack union representatives who hold the confidence of workers.

\n","author":"Jäger, Noy, & Schoefer, What Does Codetermination Do? (2021)"},{"id":"121594362","variant":"simple","text":"

However, the costs of doing so [creating additional regulations to accommodate codetermination] would very likely be much greater in the United States than they are in Germany...German corporate law heavily relies on mandatory law anyway, so preventing corporate charters and bylaws from circumventing codetermination creates little or no extra costs. By contrast, for the United States, the enactment of additional mandatory corporate law norms means sacrificing at least in part one of its main benefits.

\n","author":"Dammaann & Eidenmueller, Codetermination: A Poor Fit for U.S. Corporations (2020)"}],"links":[{"id":"69608831","slug":"ceo-to-worker-compensation-increased-from-20-to-1-in-1965-to-278-to-1-in-2018","sources":[{"slug":"ceo-compensation-has-grown-940-since-1978"}],"lede":"The growing disparity between executive and worker compensation is a significant factor in rising inequality.","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"inequality","name":"Inequality","id":"69359341"}],"title":"CEO-to-worker compensation increased from 20-to-1 in 1965 to 278-to-1 in 2018"},{"id":"121775831","slug":"on-average-companies-used-to-reinvest-20-cents-of-each-dollar-of-their-operating","sources":[{"slug":"curbing-stock-buybacks-a-crucial-step-to-raising-worker-pay-and-reducing-inequali"}],"lede":"“There are multiple factors driving corporations to reduce their level of reinvestment, including the growth of market concentration—and thus market power—across the economy, which reduces the need for companies to invest in order to compete (Gutierrez and Phillipon 2016; Steinbaum, Bernstein, and Sturm 2018).”","tags":[{"slug":"investment","name":"Investment","id":"121525298"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"neoliberalism","name":"Neoliberalism","id":"118560604"}],"title":"On average, companies used to reinvest 20 cents of each dollar of their operating returns into their businesses; that amount has dropped by half—to just 10 cents of each dollar since 2002."},{"id":"121564458","slug":"in-1981-the-s-p-500-spent-2-of-its-profits-on-buybacks-in-2017-59-on-buybacks","sources":[{"slug":"u-s-senator-tammy-baldwin-introduces-legislation-to-rein-in-stock-buybacks-and-gi"}],"lede":"-","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"investment","name":"Investment","id":"121525298"}],"title":"In 1981, the S&P 500 spent ~2% of its profits on buybacks. In 2017: 59% on buybacks."},{"id":"121544455","slug":"52-of-likely-2018-voters-supported-codetermination-only-23-opposed","sources":[{"slug":"the-new-progressive-agenda"}],"lede":"-","tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"52% of likely 2018 voters supported codetermination, only 23% opposed."},{"id":"121525695","slug":"codetermination-enjoys-majority-support-in-every-state-and-among-trump-voters-in","sources":[{"slug":"the-new-progressive-agenda"}],"lede":"Overall, 52% of likely 2018 voters supported codetermination, and 23% opposed.","tags":[{"slug":"political-barriers","name":"Political Barriers","id":"99764018"},{"slug":"public-opinion","name":"Public Opinion","id":"118561899"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"Codetermination enjoys majority support in every state *and* among Trump voters in all but 4 states."},{"id":"96354611","slug":"codetermination-can-help-protect-the-democratic-process-by-curbing-excessive-corp","sources":[{"slug":"codetermination-and-the-democratic-state"}],"lede":"“However, this Article argues that understanding codetermination solely as an instrument to protect employees or to improve corporate governance and/or performance fundamentally underestimates its potential contribution to society. The impact of codetermination goes far beyond mere economic concerns. Specifically, this Article demonstrates that codetermination can serve as a mechanism to protect the democratic process by curbing excessive corporate power.”","tags":[{"slug":"democracy","name":"Democracy","id":"95836537"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"corporate-power","name":"Corporate Power","id":"95341709"}],"title":"Codetermination can help protect the democratic process by curbing excessive corporate power."},{"id":"121544451","slug":"on-the-whole-codetermination-laws-in-european-countries-appear-to-have-zero-effec","sources":[{"slug":"what-does-codetermination-do"}],"lede":"-","tags":[{"slug":"growth","name":"Growth","id":"23932836"}],"title":"On the whole, codetermination laws in European countries appear to have zero effect on the economy, or very small, positive effects on worker, firm, and macroeconomic outcomes."},{"id":"121539935","slug":"codetermination-had-no-significant-influence-on-stock-prices-of-effected-firms-in","sources":[{"slug":"co-determination-in-germany-the-impact-of-court-decisions-on-stock-price"}],"lede":"In particular, the study looks at the period from 1974 - 1995, and subsequently zooms in on the introduction of the Codetermination Act of 1976. In both cases, the authors find that stock market prices did not have any significant reaction to codetermination.","tags":[{"slug":"stock-prices","name":"Stock Prices","id":"121539931"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"}],"title":"Codetermination had no significant influence on stock prices of effected firms in Germany."},{"id":"121543299","slug":"codetermination-did-not-lower-german-profits","sources":[{"slug":"labor-in-the-boardroom"}],"lede":"\"When measured by EBIT(DA) over revenue, we find a reduction in the profit margin by about 5ppt. EBIT(DA) over total assets yields an order of magnitude smaller effects, insignificant in all 16 specifications. For net income, we find positive point estimates across specifications and normalizations. For net income over revenue, they are statistically significant (marginally in two of the four positive specification) between 0.07 and 0.11. We find estimates of around 0.02 (SE 0.015) for effects on net income over assets. Measured by the different profit outcomes we consider, the evidence does not suggest that shared governance lowers profits.\"","tags":[{"slug":"profitability","name":"Profitability","id":"96358787"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Codetermination did not lower German profits."},{"id":"121543380","slug":"german-codetermination-had-no-effect-raising-the-lowest-wages","sources":[{"slug":"labor-in-the-boardroom"}],"lede":"\"In contrast to the hold-up view, we find neither wage increases (or decreases) nor increased rent sharing – consistent with, and in fact helping rationalize, our first key finding that capital formation is not curbed in shared governance firms...\"Unfortunately, our administrative data miss executive compensation due to the social security cap, and executives are not clearly identified in the occupational code. We sourced a data set on executive compensation (a survey by Kienbaum Consulting covering 4,055 German firms), but due to the very small sample size of matched observations incorporated even within a five-year window around the 1994 reform (fewer than 200), we were unable to estimate effects on executive compensation with any meaningful precision.\"","tags":[{"slug":"wages","name":"Wages","id":"49378899"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"German codetermination had no effect raising the lowest wages."},{"id":"121543421","slug":"impending-one-third-codetermination-did-not-deter-german-incorporations-of-firms","sources":[{"slug":"labor-in-the-boardroom"}],"lede":"\"First, a McCrary (2008) test of the density of incorporations around the reform cutoff suggests that firms did not manipulate incorporation dates, e.g., by delaying incorporation around the reform cutoff date or switching corporate forms. Second, we find no evidence for compositional shifts by industry or legal form in our analysis sample. Both pieces of evidence are consistent with survey evidence that incorporations were not deterred by one-third codetermination.\"","tags":[{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Impending one-third codetermination did not deter German incorporations of firms that would be impacted by the mandate."},{"id":"69613359","slug":"finnish-codetermination-had-no-negative-effect-on-profitability","sources":[{"slug":"voice-at-work"}],"lede":"One concern regarding codetermination is that it may grant workers too much power, biasing firm decisions towards labor at the expense of capital formation. Most existing studies find no evidence for this concern.","tags":[{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Finnish codetermination had no negative effect on profitability."},{"id":"72743598","slug":"finnish-codetermination-does-not-have-a-negative-effect-on-firm-survival-rates","sources":[{"slug":"voice-at-work"}],"lede":"The authors note that, if anything, their estimates suggest codetermination had a marginally significant positive effect on firm survival.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"firm-survival","name":"Firm Survival","id":"72743573"}],"title":"Finnish codetermination does not have a negative effect on firm survival rates"},{"id":"69609950","slug":"there-is-no-evidence-that-finnish-firms-seek-to-avoid-falling-under-the-codetermi","sources":[{"slug":"voice-at-work"}],"lede":"Some worry that passing a codetermination mandate would motivate companies to organize just beneath qualifying criteria to avoid the mandate. In Finland, this study finds no evidence of such behavior.","tags":[{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"}],"title":"There is no evidence that Finnish firms seek to avoid falling under the codetermination law"},{"id":"72742950","slug":"finnish-codetermination-had-a-neutral-or-slightly-positive-effect-on-firms-capita","sources":[{"slug":"voice-at-work"}],"lede":"Contrary to the \"hold-up hypothesis\", which predicts involving workers in corporate governance will distort incentives away from capital investment, Finnish codetermination is generally neutral, or slightly positive, for capital formation. ","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"capital","name":"Capital","id":"72742932"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"}],"title":"Finnish codetermination had a neutral, or slightly positive, effect on firms' capital formation, as measured by fixed assets"},{"id":"121564515","slug":"only-5-of-swedish-corporate-directors-reported-codetermination-had-a-negative-imp","sources":[{"slug":"codetermination-in-sweden-myth-and-reality"}],"lede":"Sample size of 293. Similarly, only 9% reported negative experiences with \"employee board representation\" more broadly (n=411). ","tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"industrial-relations","name":"Industrial Relations","id":"96360124"}],"title":"Only 5% of Swedish corporate directors reported codetermination had a negative impact on company activities."},{"id":"121544257","slug":"firms-with-equal-representation-on-the-supervisory-board-parity-codetermination-h","sources":[{"slug":"class-struggle-inside-the-firm-a-study-of-german-codetermination"}],"lede":"\"We find that firms with equal representation on the supervisory board have a significant 26 percent decline in the market-to-book ratio, compared to firms with one-third representation. Employees use their power in equal representation firms to increase the employees-to-sales and wage bill-to-sales ratios, consistent with resistance to firm restructuring. Shareholders attempt to counteract codetermination by increasing the leverage of the firm and by making board member compensation more sensitive to firm performance.”","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"stock-prices","name":"Stock Prices","id":"121539931"}],"title":"Firms with equal representation on the supervisory board (parity codetermination) have a 26% decline in market-to-book ratio, compared to firms with one-third representation."},{"id":"121544251","slug":"under-german-codetermination-employees-use-their-power-in-equal-representation-fi","sources":[{"slug":"class-struggle-inside-the-firm-a-study-of-german-codetermination"}],"lede":"-","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"labor-power","name":"Labor Power","id":"69609536"}],"title":"Under German codetermination, employees use their power in equal representation firms (1/2 parity codetermination) to increase the employees-to-sales and wage bill-to-sales ratios."},{"id":"121525656","slug":"overall-productivity-and-profitability-declined-for-german-codetermined-firms-tha","sources":[{"slug":"economic-effects-of-codetermination"}],"lede":"\"The change from one-third to almost-parity seems to have had a consistently negative effect on productivity and profitability, but little influence on labour cost, in our sample of 68 mostly very large corporations in comparison with a control group of 44 smaller firms.\"","tags":[{"slug":"productivity","name":"Productivity","id":"69648335"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"profitability","name":"Profitability","id":"96358787"}],"title":"Overall productivity and profitability declined for German codetermined firms that went from 1/3 to 1/2 parity from 1975 - 1983."},{"id":"121525658","slug":"return-on-shareholder-s-equity-declined-between-1975-and-1983-for-large-german-co","sources":[{"slug":"economic-effects-of-codetermination"}],"lede":"\"In Table 4 we consider a measure of accounting profitability, return on shareholders' equity. The COD coefficient was not significantly different from zero in 1975, but declined to -0.17 in 1983. This coefficient was significant at 5 per cent, and the change was also significant. Thus the loss of productivity appears to have reduced profits without affecting labour cost. Other interesting results here are the significantly negative effects of size (L) and capital intensity on ROE.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Return on shareholder's equity declined between 1975 and 1983 for large German codetermined firms."},{"id":"121564657","slug":"german-codetermination-improved-labor-productivity-value-added-per-employee-by-16","sources":[{"slug":"labor-in-the-boardroom"}],"lede":"\"Does the additional capital reflect only unproductive amenities demanded by workers (such as nice break rooms) rather than directly productive capital inputs (such as machines)? Our analysis of productivity suggests that this is not the case: we find that shared governance increases labor productivity, as indicated by a 16 to 21% increase in value added per employee, and detect no effects on total factor productivity.\"","tags":[{"slug":"productivity","name":"Productivity","id":"69648335"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"German codetermination improved labor productivity (value-added per employee) by 16 - 21%."},{"id":"121540684","slug":"data-from-1972-76-and-1981-85-find-codetermination-had-a-small-positive-effect-on","sources":[{"slug":"codetermination-efficiency-and-productivity"}],"lede":"\"To overcome the problems inherent in cross sectional data, in the present paper we use panel data for 179 firms, from 1972-76 and from 1981-85, allowing for adjustment to the 1976 law. Both periods contain severe recessions, as well as more normal years, so the sample is still, if anything, biased towards exaggerating the costs of co-determination, though obviously less so than the single recession year cross sections. The empirical results suggest a significant, though small, positive influence on productivity from the 1976 strengthening of co- determination law.\"","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"productivity","name":"Productivity","id":"69648335"}],"title":"Data from 1972-76 and 1981-85 find codetermination had a small positive effect on productivity following the 1976 strengthening of codetermination laws."},{"id":"72743409","slug":"finnish-codetermination-is-associated-with-small-increases-in-labor-productivity","sources":[{"slug":"voice-at-work"}],"lede":"The Finnish introduction of codetermination in 1991 gave workers the right of up to 20% represenatation on company boards, compared with Germany's 50%. Consistent with studies elsewhere, this study finds a a small but positive effect on firm performance.","tags":[{"slug":"productivity","name":"Productivity","id":"69648335"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"}],"title":"Finnish codetermination is associated with small increases in labor productivity"},{"id":"69648340","slug":"finnish-codetermination-had-a-slight-but-positive-impact-on-total-factor-producti","sources":[{"slug":"voice-at-work"}],"lede":"In general, current empirical studies find that codetermination either has neutral or slightly positive economic effects. While this study found a small increase in productivity, the authors emphasize the more important finding is the absence of negative effects.","tags":[{"slug":"labor-power","name":"Labor Power","id":"69609536"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"productivity","name":"Productivity","id":"69648335"}],"title":"Finnish codetermination had a slight, but positive impact on total factor productivity"},{"id":"122007430","slug":"a-study-of-french-firms-found-no-significant-difference-in-productivity-between-l","sources":[{"slug":"productivity-capital-and-labor-in-labor-managed-and-conventional-firms-an-investi"}],"lede":"“Overall, the GLS estimates suggest that in most industries there is no significant productivity difference between labor-managed and conventional firms. This result is in keeping with existing studies. In only one industry, Paper and Wood, is there a significant difference—one that is in favor of worker cooperatives.”","tags":[{"slug":"productivity","name":"Productivity","id":"69648335"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"france","name":"France","id":"122007419"}],"title":"A study of French firms found no significant difference in productivity between labor-managed and conventional firms."},{"id":"122007431","slug":"a-study-of-french-firms-finds-that-labor-managed-firms-may-use-their-inputs-more","sources":[{"slug":"productivity-capital-and-labor-in-labor-managed-and-conventional-firms-an-investi"}],"lede":"“In several cases, no significant difference appears between the outputs a given type of firm would produce with the technology used by the cooperatives and with the conventional firms' technology. In almost all cases in which a significant difference occurs, the SCOPs would produce more with their own technology, regardless of the data set or estimation method. The exception is the GLS estimate for the Mechanical Engineering industry with Data Set 2, but the GMM estimate indicates that SCOPs would produce more with their own technology in that industry as well. In contrast, in a number of industries conventional firms would produce more using the cooperatives' technology with their current input levels. Overall, these results suggest that SCOPs are as productive as conventional firms, or more productive, and use their inputs better. Differences occur across industries, but it seems that in several industries conventional firms would be better off if they behaved like labor-managed firms”","tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A study of French firms finds that labor-managed firms may use their inputs more efficiently than conventional firms."},{"id":"72745966","slug":"finnish-codetermination-slightly-raised-wages-for-the-lowest-wage-earners-within","sources":[{"slug":"voice-at-work"}],"lede":"While Finnish codetermination had little impact on executive compensation, by slightly raising wages for the lowest wage-earners, it reduced overall inequality within firms.","tags":[{"slug":"wages","name":"Wages","id":"49378899"},{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"}],"title":"Finnish codetermination slightly raised wages for the lowest wage-earners within firms, compressing overall within-firm wages"},{"id":"121260239","slug":"in-norway-there-is-no-evidence-that-adopting-codetermination-caused-any-change-in","sources":[{"slug":"do-employees-benefit-from-worker-representation-on-corporate-boards"}],"lede":"While the authors did find that codetermination and wages are positively correlated, the evidence suggests that firm size and unionization - not worker representation - are the causal mechanisms.","tags":[{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"wages","name":"Wages","id":"49378899"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"In Norway, there is no evidence that adopting codetermination caused any change in wages."},{"id":"121525072","slug":"in-norway-workers-moving-into-firms-with-codetermination-experience-a-4-increase","sources":[{"slug":"do-employees-benefit-from-worker-representation-on-corporate-boards"}],"lede":"\"On average, we find that workers moving into firms with worker representation experience a four percent increase in wages, compared with their former co-workers moving between firms without representation. Conversely, workers moving out of firms with worker representation experience, on average, a three percent drop in wages, compared with their former co-workers mov- ing between firms with representation.\"","tags":[{"slug":"wages","name":"Wages","id":"49378899"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"labor-power","name":"Labor Power","id":"69609536"},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"}],"title":"In Norway, workers moving into firms with codetermination experience a 4% increase in wages relative to former co-workers moving into firms without codetermination."},{"id":"121525066","slug":"during-recessions-in-norway-workers-at-codetermined-firms-only-experience-wage-de","sources":[{"slug":"do-employees-benefit-from-worker-representation-on-corporate-boards"}],"lede":"\"The wages of workers in firms with worker representation are not only higher on average, but they are also better insured against fluctuations in firm performance. Controlling for time-invariant worker and firm heterogeneity, we estimate a significantly lower pass through of idiosyncratic firm shocks to incumbent workers’ wages in firms with representation. In response to a 10 percent fall in the value added of a firm, the wages of workers decrease by 0.9 percent in firms without worker representation, while the wages of workers only decrease by 0.2 percent in firms with worker representation.\"","tags":[{"slug":"wages","name":"Wages","id":"49378899"},{"slug":"recessions","name":"Recessions","id":"116254487"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"}],"title":"During recessions in Norway, workers at codetermined firms only experience wage decreases of 0.2%, compared with 0.9% for workers at non-codetermined firms."},{"id":"121525077","slug":"in-norway-workers-at-codetermined-firms-have-higher-wages-and-less-earnings-risk","sources":[{"slug":"do-employees-benefit-from-worker-representation-on-corporate-boards"}],"lede":"\"We find that a worker is paid more and faces less earnings risk if she gets a job in a firm with worker representation on the corporate board. However, these gains in wages and declines in earnings risk are not caused by worker representation per se. Instead, the wage premium and reduced earnings risk reflect that firms with worker representation are likely to be larger and unionized, and that larger and unionized firms tend to both pay a premium and better insure workers against fluctuations in firm performance. Conditional on the firm’s size and unionization rate, worker representation has little if any effect.\"","tags":[{"slug":"wages","name":"Wages","id":"49378899"},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"In Norway, workers at codetermined firms have higher wages and less earnings risk, though the causal mechanism appears to be the size and unionization of codetermined firms, rather than worker representation."},{"id":"121542876","slug":"employee-owned-businesses-in-the-u-s-pay-5-12-more-in-wages-have-twice-the-retire","sources":[{"slug":"fighting-short-termism-with-worker-power-roosevelt-institute"}],"lede":"ESOPs—a form of worker ownership—have also been gaining policy attention recently as a means of redressing wage inequality. According to the National Center for Employee Ownership (NCEO), there are approximately 7,000 ESOPs in the U.S., involving 14 million employees.\"","tags":[{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"wages","name":"Wages","id":"49378899"}],"title":"Employee-owned businesses in the U.S. pay 5 - 12% more in wages, have twice the retirement accounts, and are one-quarter as likely to be laid off."},{"id":"121543293","slug":"property-rights-theory-arguments-against-codetermination-suggest-that-codetermina","sources":[{"slug":"co-determination-and-innovation"}],"lede":"In practice, however, the opposite has generally been observed.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"innovation","name":"Innovation","id":"69608404"},{"slug":"industrial-relations","name":"Industrial Relations","id":"96360124"}],"title":"Property rights theory arguments against codetermination suggest that codetermination might create tension between innovation and employment, and may increase the time needed to make decisions."},{"id":"95835658","slug":"codetermination-can-dampen-or-eliminate-information-asymmetry-between-employers-a","sources":[{"slug":"codetermination-a-poor-fit-for-u-s-corporations"}],"lede":"\"Codetermination, however, ensures that the employee representatives have access to the same information as other board members. As a result, mandatory codetermination can mitigate or eliminate the information asymmetry between employers and workers.\"","tags":[{"slug":"information-flow","name":"Information Flow","id":"95060907"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"efficiency","name":"Efficiency","id":"72743745"}],"title":"Codetermination can dampen or eliminate information asymmetry between employers and workers."},{"id":"121542882","slug":"a-1998-german-commission-unanimously-concluded-that-codetermination-deepened-trus","sources":[{"slug":"fighting-short-termism-with-worker-power-roosevelt-institute"}],"lede":"\"By contrast, the Komission Mitbestimmung, tasked in 1998 with evaluating the worth of Germany’s co-determination system, concluded unanimously that co- determination promoted the “cooperative modernization” of Germany’s firms by deepening trust between management and labor and improving information flow (Silvia 2013).\"","tags":[{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"industrial-relations","name":"Industrial Relations","id":"96360124"},{"slug":"information-flow","name":"Information Flow","id":"95060907"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"A 1998 German commission unanimously concluded that codetermination deepened trust between management and labor, improving information flow."},{"id":"121543284","slug":"the-overwhelming-majority-of-supervisory-board-decisions-under-codetermination-ar","sources":[{"slug":"co-determination-and-innovation"}],"lede":"The commission “Mitbestimmung” also discusses this point and argues that the overwhelming majority of all decisions are unanimous.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"decision-making","name":"Decision-Making","id":"95060898"}],"title":"The “overwhelming majority” of supervisory board decisions under codetermination are unanimous."},{"id":"121543267","slug":"there-is-suggestive-evidence-for-a-positive-impact-of-co-determination-on-innovat","sources":[{"slug":"co-determination-and-innovation"}],"lede":"In this study, innovation is measured by the number of patents awarded to German companies before and after codetermination laws were introduced in 1976, controlling for several variables including number of employees, capital intensity, and firm age.","tags":[{"slug":"innovation","name":"Innovation","id":"69608404"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"There is suggestive evidence for a positive impact of co-determination on innovation."},{"id":"121540955","slug":"86-of-swedish-managing-directors-did-not-believe-that-union-participation-contrib","sources":[{"slug":"codetermination-in-sweden-myth-and-reality"}],"lede":".","tags":[{"slug":"industrial-relations","name":"Industrial Relations","id":"96360124"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"86% of Swedish managing directors did not believe that 'union participation contributes to conflict and slowing down of company operations.'"},{"id":"69648555","slug":"76-of-swedish-corporate-directors-reported-positive-experiences-with-codeterminat","sources":[{"slug":"codetermination-in-sweden-myth-and-reality"}],"lede":"A survey of Swedish stakeholders with experience in codetermination yielded broadly favorable attitudes towards codetermination, across both workers and executives.","tags":[{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"76% of Swedish corporate directors reported positive experiences with codetermination"},{"id":"121544269","slug":"stronger-employee-representation-laws-are-positively-associated-with-aggregate-in","sources":[{"slug":"employee-representation-legislations-and-innovation"}],"lede":"Study data spanned manufacturing sectors of the USA, UK, France, and Germany from 1977 - 2005. ","tags":[{"slug":"innovation","name":"Innovation","id":"69608404"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"}],"title":"Stronger employee representation laws are positively associated with aggregate innovation."},{"id":"95060900","slug":"81-of-swedish-managing-directors-report-codetermination-does-not-hinder-effective","sources":[{"slug":"codetermination-in-sweden-myth-and-reality"}],"lede":"Survey data from nearly 300 Swedish managing directors was gathered from 1984, 1996, and 1998 to assess their experience with codetermination.","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"efficiency","name":"Efficiency","id":"72743745"},{"slug":"decision-making","name":"Decision-Making","id":"95060898"}],"title":"81% of Swedish managing directors report codetermination does not hinder effective decision-making."},{"id":"143363843","slug":"in-2018-germany-was-ranked-as-the-world-s-most-innovative-economy-outperforming-t","sources":[{"slug":"the-2018-global-competitiveness-report"}],"lede":"The analysis was performed by the World Economic Forum. Germany received a score of 87.5 out of 100, compared to the 2nd place US, with a score of 86.5. Germany’s high score is driven largely by innovation in the automobile industry.","tags":[{"slug":"innovation","name":"Innovation","id":"69608404"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"germany","name":"Germany","id":"143363841"}],"title":"In 2018, Germany was ranked as the world's most innovative economy, outperforming the US."},{"id":"121765930","slug":"a-primary-criticism-of-stock-buybacks-is-that-they-draw-corporate-resources-away","sources":[{"slug":"curbing-stock-buybacks-a-crucial-step-to-raising-worker-pay-and-reducing-inequali"}],"lede":"“The terms “stock buyback” and “share repurchase” refer to the practice in which companies repurchase their own stocks from shareholders on the open market. This creates a scarcity of shares and boosts their value. Corporate executives benefit from this because share repurchases drive up the value of their stock-based compensation and give them an opportunity to cash out their personal stock holdings at a profit (Palladino 2018; Jackson 2018); furthermore, shareholders can benefit, but only if they sell their shares at the artificially inflated prices. This means that fewer corporate resources are available for growth-inducing activities, such as investing in research and development, spending on capital investments and new technologies, or creating new jobs and improving worker compensation.”","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"investment","name":"Investment","id":"121525298"}],"title":"A primary criticism of stock buybacks is that they draw corporate resources away from other growth-inducing activities, like investing in research and development, spending on capital investments, or improving worker compensation."},{"id":"121765911","slug":"one-rationale-for-stock-buybacks-is-when-companies-have-no-other-productive-inves","sources":[{"slug":"curbing-stock-buybacks-a-crucial-step-to-raising-worker-pay-and-reducing-inequali"}],"lede":"“Proponents of buybacks argue that corporate executives conduct buybacks when other value-creating investment opportunities are unavailable, and instead use that cash to reward shareholders in the form of share repurchases. This cash, they suggest, can then circulate in capital markets to fund productive investment in other companies and generate growth. In other words, buybacks allow companies to reward shareholders, and the cash gets recycled into investment in other companies or startups.”","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"investment","name":"Investment","id":"121525298"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"One rationale for stock buybacks is when companies have no other productive investment available, buybacks transfer cash to shareholders, which they can use to fund other productive investments."},{"id":"121765901","slug":"an-analysis-by-the-sec-commissioner-found-that-executives-frequently-exploit-stoc","sources":[{"slug":"stock-buybacks-and-corporate-cashouts"}],"lede":"“Even more disturbing, there is clear evidence that a substantial number of corporate executives today use buybacks as a chance to cash out the shares of the company they received as executive pay. We give stock to corporate managers to convince them to create the kind of long-term value that benefits American companies and the workers and communities they serve. Instead, what we are seeing is that executives are using buybacks as a chance to cash out their compensation at investor expense…Executives often claim that a buyback is the right long-term strategy for the company, and they’re not always wrong. But if that’s the case, they should want to hold the stock over the long run, not cash it out once a buyback is announced.”","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"short-termism","name":"Short-Termism","id":"118562815"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"inequality","name":"Inequality","id":"69359341"}],"title":"An analysis by the SEC Commissioner found that executives frequently exploit stock buybacks to cash out their company shares at inflated prices."},{"id":"121525299","slug":"share-buybacks-began-increasing-soon-after-1982-when-sec-rule-10b-18-allowed-comp","sources":[{"slug":"investment-less-growth-an-empirical-investigation"}],"lede":"The authors find that private fixed investment in the U.S. over the past 30 years has been low, and find empirical support for the hypothesis that the under-investment is driven by short-termism and tightened governance. In particular, industries with more institutional investor ownership invest less.","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"short-termism","name":"Short-Termism","id":"118562815"},{"slug":"investment","name":"Investment","id":"121525298"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Share buybacks began increasing soon after 1982, when SEC rule 10b-18 allowed companies to repurchase shares on the open market without regulatory limits."},{"id":"121765949","slug":"from-2015-2017-the-u-s-restaurant-industry-spent-more-in-stock-buybacks-than-it-m","sources":[{"slug":"curbing-stock-buybacks-a-crucial-step-to-raising-worker-pay-and-reducing-inequali"}],"lede":"-","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"investment","name":"Investment","id":"121525298"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"From 2015 - 2017, the U.S. restaurant industry spent more in stock buybacks than it made in profits - 136.5%. Buybacks were financed through debt and cash reserves."},{"id":"121525652","slug":"between-1998-2014-germany-had-210-stock-buybacks-to-the-us-s-11-096","sources":[{"slug":"buybacks-around-the-world"}],"lede":"The global, non-US total number of stock buybacks was 9,034. Next closest was Canada, with 2,298.","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"neoliberalism","name":"Neoliberalism","id":"118560604"},{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"short-termism","name":"Short-Termism","id":"118562815"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Between 1998 - 2014, Germany had 210 stock buybacks to the US's 11,096."},{"id":"121525249","slug":"firms-that-rely-heavily-on-stock-option-based-compensation-are-significantly-more","sources":[{"slug":"investment-less-growth-an-empirical-investigation"}],"lede":"\"In particular, Almeida et al. [2016] show that the probability of share repurchases is sharply higher for firms that would have just missed the EPS forecast in the absence of a repurchase; and Jolls [1998] shows that firms which rely heavily on stock-option-based compensation are significantly more likely to repurchase their stock than firms which rely less heavily on stock options to compensate their top executives. Given the rise of institutional ownership, an increase in market-induced short-termism may lead firms to increase buybacks and cut long term investment.\"","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"short-termism","name":"Short-Termism","id":"118562815"},{"slug":"executive-compensation","name":"Executive Compensation","id":"121525247"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"neoliberalism","name":"Neoliberalism","id":"118560604"}],"title":"Firms that rely heavily on stock-option-based compensation are significantly more likely to repurchase their stock than firms which rely less heavily on stock options for executive compensation."},{"id":"121544261","slug":"one-reason-firms-repurchase-shares-is-to-avoid-dilution-from-executive-stock-comp","sources":[{"slug":"fighting-short-termism-with-worker-power-roosevelt-institute"}],"lede":"\"Analysts often treat buybacks as a stand-alone issue, but there is compelling research that suggests one of the main reasons companies conduct stock buybacks is to offset their executive compensation packages. For example, Klassen and Sivakumar’s (2001) research looks at repurchase and option activity for nonfinancial firms from 1995 to 1999. Their findings indicate that firms repurchase shares particularly to avoid dilution from executive stock option compensation programs. Further, Griffin and Zhu’s (2009) research states that “we conclude that the popular use of buybacks as a form of cash distribution derives significantly from a strong contemporaneous relation between stock buybacks and CEOs’ use of stock options as compensation.” However, Weisbenner (2000) finds that for 1995 repurchase activity, overall firm options rather than executive options, are connected with repurchase activity. Whether or not offsetting pay is the sole reason companies conduct share repurchases, we can be sure that without buybacks, companies could not structure compensation so heavily with stock grants and options.\"","tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245"},{"slug":"executive-compensation","name":"Executive Compensation","id":"121525247"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"One reason firms repurchase shares is to avoid dilution from executive stock compensation programs."},{"id":"121544287","slug":"there-is-an-economically-and-statistically-significant-positive-correlation-betwe","sources":[{"slug":"democracy-does-cause-growth"}],"lede":"\"Skepticism about the performance of democratic institutions is as old as democracy itself. Plato, for example, denigrated democracy as the second worst form of government after tyranny. The view that democracy is a constraint on economic growth has recently been gaining ground. In this paper, we show that once the dynamics of GDP are controlled for in a fixed effects OLS regression, there is an economically and statistically significant positive correlation between democracy and future GDP per capita. This result remains true in GMM estimates that account for any bias due to lagged dependent variables, as well as with semi-parametric estimators based on a propensity score for democratic transitions estimated using past lags of log GDP. Our preferred specifications imply that long-run GDP increases by about 20% following a democratic transition.\"","tags":[{"slug":"democracy","name":"Democracy","id":"95836537"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752"}],"title":"There is an economically and statistically significant positive correlation between democracy and future GDP per capita."},{"id":"121544291","slug":"democracy-may-encourage-growth-through-economic-reforms-increasing-human-capital","sources":[{"slug":"democracy-does-cause-growth"}],"lede":"\"Overall, we take these results as suggesting that democracy might be working through a number of channels, in particular, by encouraging economic reforms, increasing human capital (especially primary schooling), and raising state capacity and some aspects of public services (especially re- lated to health) as well as, to some degree, increasing investment and reducing social unrest. Of course, our strategy does not allow us to conclusively establish that these are the most important mechanisms, but the fact that these variables increase following a democratization even controlling for lags of GDP per capita suggests they are prime candidates for the channels through which democracy might be causing higher GDP.\"","tags":[{"slug":"democracy","name":"Democracy","id":"95836537"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"investment","name":"Investment","id":"121525298"},{"slug":"education","name":"Education","id":"101119962"}],"title":"Democracy may encourage growth through: economic reforms, increasing human capital (especially through primary schooling), increasing investment, and reducing social unrest."},{"id":"121543527","slug":"theoretical-arguments-suggest-that-codetermination-has-scope-for-real-efficiency","sources":[{"slug":"codetermination-efficiency-and-productivity"}],"lede":"-","tags":[{"slug":"job-satisfaction","name":"Job Satisfaction","id":"96360247"},{"slug":"productivity","name":"Productivity","id":"69648335"}],"title":"Theoretical arguments suggest that codetermination has scope for real efficiency gains in terms of both productivity & job satisfaction, but the latter is difficult to measure, while the former is mostly likely to show up in long-run data sets that are difficult to acquire."},{"id":"121540498","slug":"higher-levels-of-codetermination-correlate-with-greater-national-equality","sources":[{"slug":"the-macroeconomic-effect-of-codetermination-on-income-equality"}],"lede":"\"Out of this, the previously stated hypothesis can be confirmed by the analysed sample of EU countries. This strongly supports Vitols (2005) results, which indicated a negative bivariate correlation between the existence of a compulsory codetermination system in the private sector and the level of the Gini index. Correspondingly, it is fair to conclude that states with codetermination inhabit a more equal distribution of incomes than states without employee representation in the board of companies in the private sector. This supports – on the macro-level – the results found on the micro-level by Gorton & Schmid (2002), stating that codetermination has an impact on the wage level in German companies.\"","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Higher levels of codetermination correlate with greater national equality."},{"id":"121540331","slug":"codetermination-led-to-significantly-lower-income-share-for-the-highest-decile-of","sources":[{"slug":"the-macroeconomic-effect-of-codetermination-on-income-equality"}],"lede":"The results show that the level of codetermination in the private sector has a strong and strongly significant impact on the income distribution on both, the EU and the OECD countries. A higher level of codetermination thereby leads to more equally distributed incomes, indicated by a lower Gini index. This result holds true if the socio-economic control variables are included (see Model 3). The impact of codetermination however becomes slightly smaller if the controls are included, but remains strongly significant and negative.","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Codetermination led to significantly lower income share for the highest decile of income, while union strength had no significant impact."},{"id":"121540477","slug":"codetermination-level-has-a-stronger-correlation-with-national-equality-than-trad","sources":[{"slug":"the-macroeconomic-effect-of-codetermination-on-income-equality"}],"lede":"The results show that the level of codetermination in the private sector has a strong and strongly significant impact on the income distribution on both, the EU and the OECD countries. A higher level of codetermination thereby leads to more equally distributed incomes, indicated by a lower Gini index. This result holds true if the socio-economic control variables are included (see Model 3). The impact of codetermination however becomes slightly smaller if the controls are included, but remains strongly significant and negative.","tags":[{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"inequality","name":"Inequality","id":"69359341"}],"title":"Codetermination level has a stronger correlation with national equality than trade union density (together they explain more than 2/3rds of the variation)."},{"id":"121542884","slug":"in-2015-typical-german-ceo-made-5-6-million-while-their-u-s-counterparts-made-14","sources":[{"slug":"fighting-short-termism-with-worker-power-roosevelt-institute"}],"lede":".","tags":[{"slug":"executive-compensation","name":"Executive Compensation","id":"121525247"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"short-termism","name":"Short-Termism","id":"118562815"}],"title":"In 2015, typical German CEO made $5.6 million, while their U.S. counterparts made $14.9 million."},{"id":"121542888","slug":"stock-options-comprise-63-of-average-ceo-pay-in-america-but-only-24-in-germany","sources":[{"slug":"fighting-short-termism-with-worker-power-roosevelt-institute"}],"lede":".","tags":[{"slug":"executive-compensation","name":"Executive Compensation","id":"121525247"},{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Stock options comprise 63% of average CEO pay in America, but only 24% in Germany."},{"id":"72743889","slug":"finnish-codetermination-had-no-effect-on-executive-compensation","sources":[{"slug":"voice-at-work"}],"lede":"Codetermination is sometimes suggested as one potential remedy for the growing inequality between worker and executive pay. The authors find that in Finland, codetermination had little impact on executive pay.","tags":[{"slug":"inequality","name":"Inequality","id":"69359341"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Finnish codetermination had no effect on executive compensation"},{"id":"73833354","slug":"finnish-worker-representatives-do-not-believe-they-can-affect-wages-investment-ou","sources":[{"slug":"voice-at-work"}],"lede":"Different degrees of codetermination confer workers with varying degrees of power. In Finland, workers at firms with greater than 150 employees have the right to elect up to 20% of the board, compared to Germany's 50%. Surveyed Finnish workers report feeling little control over corporate decision making. Instead, they view their role as about improving communication, information sharing, and working conditions.","tags":[{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"labor-power","name":"Labor Power","id":"69609536"}],"title":"Finnish worker-representatives do not believe they can affect wages, investment, outsourcing, or other strategic decisions"},{"id":"121544448","slug":"codetermination-laws-have-been-passed-in-countries-with-already-existing-pro-work","sources":[{"slug":"what-does-codetermination-do"}],"lede":"\"Third, codetermination laws coexist with other important pro-worker institutions whose influence may leave little room for codetermination to have an impact. European countries with codetermination laws tend to also have centralized collective bargaining systems, high rates of union representation, and extensive labor market regulations. These institutions may already capture most of the low-hanging fruit when it comes to affecting worker outcomes, leaving limited scope for codetermination to further shape outcomes.\"","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"}],"title":"Codetermination laws have been passed in countries with already existing pro-worker institutions, such as centralized collective bargaining systems, high union coverage, and extensive labor market regulations. Thus, the low hanging fruit of codetermination's potential impact may already be plucked. "},{"id":"95835630","slug":"in-2015-only-7-2-of-us-private-sector-workers-were-covered-under-collective-barga","sources":[{"slug":"codetermination-a-poor-fit-for-u-s-corporations"}],"lede":"The authors suggest that the potential benefits of codetermination, such as sharing information between employers and workers, depend on widespread collective bargaining. Without it, the benefits may be lessened.","tags":[{"slug":"information-flow","name":"Information Flow","id":"95060907"},{"slug":"labor-power","name":"Labor Power","id":"69609536"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"In 2015, only 7.2% of US private sector workers were covered under collective bargaining agreements. Meanwhile, 50.2% in Germany."},{"id":"121543877","slug":"union-density-in-western-europe-ranges-from-below-10-in-france-to-almost-80-in-sw","sources":[{"slug":"union-recognition-and-collective-bargaining-how-does-the-united-states-compare-wi"}],"lede":"--","tags":[{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Union density in Western Europe ranges from below 10% in France to almost 80% in Sweden; but collective bargaining coverage is over 80% in all but Germany, where it’s over 60%."},{"id":"72746108","slug":"surveys-suggest-the-finnish-transition-to-worker-representation-slightly-increase","sources":[{"slug":"voice-at-work"}],"lede":"While surveys suggested small increases in perceived job quality, other findings studying revealed preferences found no evidence of significant increases in job quality.","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"job-quality","name":"Job Quality","id":"72746068"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"}],"title":"Surveys suggest the Finnish transition to worker representation slightly increased perceived job quality "},{"id":"96360615","slug":"a-2021-survey-of-codetermination-studies-finds-that-the-existing-empirical-eviden","sources":[{"slug":"what-does-codetermination-do"}],"lede":"“Our overall conclusion in this section is that the existing empirical evidence points to nonexistent or very small positive effects of codetermination on key proxies for worker welfare, including wages, rent-sharing, voluntary and involuntary separations, health, and subjective job quality.”","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"job-quality","name":"Job Quality","id":"72746068"},{"slug":"job-satisfaction","name":"Job Satisfaction","id":"96360247"}],"title":"A 2021 survey of codetermination studies finds that the existing empirical evidence \"points to nonexistent or very small positive effects of codetermination on key proxies for worker welfare, including wages, rent-sharing, voluntary and involuntary separations, health, and subjective job quality.\""},{"id":"121543444","slug":"americans-prefer-to-work-at-democratic-firms-because-they-intrinsically-value-hav","sources":[{"slug":"what-do-americans-want-from-private-government"}],"lede":"“Respondents prefer to work at democratic firms in part because they intrinsically value having more power at work: Our experimental design also allows us to hold many other job search factors constant such as salary, benefits, and workplace culture–features that would also likely change in response to workplace democratization. As a result, we are able to isolate that individuals value workplace democracy because they perceive that they would have more power at the workplace. Labor republican theorists argue that workers should want more democratic power at work and we find that they do.”","tags":[{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"public-opinion","name":"Public Opinion","id":"118561899"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"labor-power","name":"Labor Power","id":"69609536"}],"title":"Americans prefer to work at democratic firms because they intrinsically value having more power at work."},{"id":"121525618","slug":"codetermination-raised-the-probability-of-employees-preferring-to-work-at-a-firm","sources":[{"slug":"what-do-americans-want-from-private-government"}],"lede":"\"In the left panel, we find that respondents in general prefer to work at more democratic workplaces to the private corporation. Relative to the baseline condition, co-determination raises the probability of preferring a given firm by 7 percentage points (CI95 = [4pp, 11pp]), ESOP raises the probability of preferring a given firm by 10 percent- age points (CI95 = [6pp, 14pp]), and management elections raises the probability of preferring a given firm by 5 percentage points (CI95 = [1pp, 8pp]).\"","tags":[{"slug":"job-satisfaction","name":"Job Satisfaction","id":"96360247"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Codetermination raised the probability of employees preferring to work at a firm by 7%; ESOP's by 10%."},{"id":"121525624","slug":"americans-value-economic-democracy-equivalently-to-a-wage-increase-of-20-hr","sources":[{"slug":"what-do-americans-want-from-private-government"}],"lede":"\"To provide a further sense of the economic magnitude, we directly benchmark our workplace democracy results with respect to salary offers. Because we also randomized salary offers in $10,000 increments, we are essentially able to generate a labor supply curve based on salary. Using these estimates (see Figure A1-3 and Table A1-2 for details), we estimate that co-determination, ESOPs, and management elections are approximately equivalent to a $70,000, $100,000, and $40,000 increase in salaries holding constant the implied utility that a respondent would get from working at a given hypothetical firm. This translates, on average, to approximately a $20/hour increase in wages. This is likely an upper bound on the wage growth that individuals might be willing to forego so we caution against over-interpreting these magnitudes. Future work, using field experimental methods, are likely better suited to test for the actual wages that individuals might give up for workplace democracy. Nevertheless, our results suggest that workplace democracy preferences are economically meaningful.\"","tags":[{"slug":"job-satisfaction","name":"Job Satisfaction","id":"96360247"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"}],"title":"Americans value economic democracy equivalently to a wage increase of $20/hr."},{"id":"96360237","slug":"a-synthesis-of-case-studies-interviews-and-surveys-suggests-that-existing-codeter","sources":[{"slug":"what-does-codetermination-do"}],"lede":"\"The qualitative evidence paints a picture of an institution that gives workers some control over their immediate working conditions, but grants them negligible authority beyond that. Given this characterization, it is unsurprising that codetermination fails to significantly shift major outcomes like wages or investment. This \"limited power\" explanation also accounts for the fact that quasi-parity and parity codetermination arrangements (which convey greater formal authority to workers) provoke more opposition from managers and directors, and possibly have larger wage effects.... If limited power conveyed by minority board-level representation is key to explaining codetermination’s lack of impact, then we should expect the codetermination proposals in the US and UK to have similarly negligible impacts if implemented.\"","tags":[{"slug":"labor-power","name":"Labor Power","id":"69609536"},{"slug":"power","name":"Power","id":"95341701"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"A synthesis of case studies, interviews, and surveys suggests that existing codetermination laws grant workers power in three areas: moderate control over working conditions, small influence in layoffs, and small influence over wage setting."},{"id":"121544436","slug":"there-is-nearly-unanimous-agreement-that-worker-representatives-have-no-influence","sources":[{"slug":"what-does-codetermination-do"}],"lede":"\"There is nearly unanimous agreement that worker representatives have no influence on broad strategic decisions, even when they sit on company boards. Fewer than 5% of Finnish worker representatives believe they can affect strategic decisions (Harju, Jäger, and Schoefer, 2021), and Swedish Managing Directors report that worker representatives are almost completely inactive during strategic discussions in board meetings (Levinson, 2000). The general perception among worker representatives is that strategic decisions are made out of their view, and presented to them once management’s mind is already made up (Wheeler, 2002; Gold, Kluge, and Conchon, 2010). While this survey evidence leaves room for equilibrium or anticipation effects of board-level representation on the decisions of managers, this self-professed near-complete lack of influence on strategic decisions highlights the lack of power conveyed by arrangements like minority board-level representation. Worker representatives’ inability to influence strategic decisions in particular may help explain the absence of evidence for negative effects of codetermination on firm performance.","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"labor-power","name":"Labor Power","id":"69609536"}],"title":"There is nearly unanimous agreement that worker representatives have no influence on broad strategic decisions, even when they sit on company boards."},{"id":"69609552","slug":"in-a-survey-of-finnish-shop-floor-representatives-76-say-worker-representation-fe","sources":[{"slug":"voice-at-work"}],"lede":"In practice, codetermination may confer less real power to workers than theory suggests. In Finland, the specifics of the codetermination mandate have left workers reporting negligible changes in power dynamics.","tags":[{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"labor-power","name":"Labor Power","id":"69609536"}],"title":"In a survey of Finnish shop-floor representatives, 76% say worker representation \"feels like a formality\", and 65% believe the rights of worker representatives are too narrow"},{"id":"95853420","slug":"a-2021-qualitative-analysis-finds-that-codetermination-is-an-effective-strategy-f","sources":[{"slug":"codetermination-and-the-democratic-state"}],"lede":"“But is codetermination an effective mechanism for constraining corporate power? That is the crucial question, and to answer it, this Article analyzes the mechanics, the strengths and the weaknesses of codetermination as a tool for protecting the democratic state. Our analysis demonstrates that, although we acknowledge some important drawbacks, codetermination works effectively toward the goal of curbing corporate power. Additionally, we show that the motivation for implementing codetermination influences the optimal design of codetermination laws; not all variations of codetermination are equally suited to the goal of curtailing corporate power.”","tags":[{"slug":"power","name":"Power","id":"95341701"},{"slug":"corporate-power","name":"Corporate Power","id":"95341709"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"democracy","name":"Democracy","id":"95836537"},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474"}],"title":"A 2021 qualitative analysis finds that codetermination is an effective strategy for curbing corporate political power."},{"id":"96354511","slug":"by-allowing-employees-to-elect-a-significant-portion-of-corporate-directors-codet","sources":[{"slug":"codetermination-and-the-democratic-state"}],"lede":"“Allowing employees to elect a sizable portion of corporate directors in large corporations imposes an effective check on the power of shareholders and managers. Thus, codetermination plays a role that is broadly similar to that of the Constitutional separation of powers. Codetermination does not seek to limit corporate growth. Rather, it helps to ensure that large corporations use their resources responsibly and do not undermine democracy. By “democratizing” decision-making within large corporations, codetermination protects and strengthens the democratic political process outside corporations.”","tags":[{"slug":"corporate-power","name":"Corporate Power","id":"95341709"},{"slug":"democracy","name":"Democracy","id":"95836537"},{"slug":"stability","name":"Stability","id":"23916385"}],"title":"By allowing employees to elect a significant portion of corporate directors, codetermination can play a similar role as that of the Constitutional separation of powers."},{"id":"121525189","slug":"a-statement-co-signed-by-prominent-conservatives-including-jonathan-berry-marco-r","sources":[{"slug":"conservatives-should-ensure-workers-a-seat-at-the-table"}],"lede":"The letter notes that strong labor institutions should be a point of bipartisan agreement, as they support economic prosperity, limited government, and strong communities.","tags":[{"slug":"political-barriers","name":"Political Barriers","id":"99764018"},{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"},{"slug":"labor-power","name":"Labor Power","id":"69609536"}],"title":"A statement co-signed by prominent conservatives, including Jonathan Berry, Marco Rubio, Oren Cass, and Jeff Sessions, advocated for codetermination and stronger labor institutions."},{"id":"121539860","slug":"american-trade-unions-generally-opposed-codetermination-in-the-1970-s-german-unio","sources":[{"slug":"labor-participation-in-corporate-policy-making-decisions-west-germany-s-experienc"}],"lede":"Thomas Donahue, the Executive Assistant to the President of the AFL-CIO in 1976 said: \"We do not wish to be a partner in management – to be, most likely, the junior partner in success and the senior partner in failure.\" ","tags":[{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"American trade unions generally opposed codetermination in the 1970's (German unions fought for it)."},{"id":"121544454","slug":"americans-are-less-polarized-on-economic-democracy-codetermination-employee-stock","sources":[{"slug":"what-do-americans-want-from-private-government"}],"lede":"-","tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899"},{"slug":"stability","name":"Stability","id":"23916385"},{"slug":"political-barriers","name":"Political Barriers","id":"99764018"}],"title":"Americans are less polarized on economic democracy (codetermination, employee stock ownership programs, and management elections) than unionization."},{"id":"121541011","slug":"the-larger-the-company-the-more-likely-the-directors-indicated-positive-views-of","sources":[{"slug":"codetermination-in-sweden-myth-and-reality"}],"lede":"\"Statistical analysis of the directors' responses indicated that the percentage of positive opinions is largest in companies with more than 500 employees.\"","tags":[{"slug":"industrial-relations","name":"Industrial Relations","id":"96360124"}],"title":"The larger the company, the more likely the directors indicated positive views of codetermination."},{"id":"95341925","slug":"of-the-14-european-countries-that-enacted-codetermination-laws-only-2-hungary-and","sources":[{"slug":"codetermination-and-the-democratic-state"}],"lede":"Even the walk-backs were not absolute, and in the Czech Republic, did not last. Hungary retained codetermination for firms with two-tier boards (covering most firms in Hungary), and The Czech Republic re-introduced codetermination for large firms in 2017 after abolishing it only 3 years earlier.","tags":[{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Of the 14 European countries that enacted codetermination laws, only 2 (Hungary and the Czech Republic) walked them back. Even after, the Czech Republic re-implemented codetermination for large corporations."},{"id":"95341864","slug":"from-the-perspective-of-large-corporations-codetermination-may-be-a-more-preferab","sources":[{"slug":"codetermination-and-the-democratic-state"}],"lede":"“The relatively soft constraint imposed by codetermination becomes especially apparent if one considers other mechanisms that the U.S. Congress has used or could use to tame concentrations of private power. For example, we suspect that if choosing between a marginal income tax rate of 94% (the tax rate imposed upon the highest earners from 1944 to 1945) and codetermination, most of the country’s entrepreneurs, scholars, and wealthy citizens would view the latter as less disruptive. Similarly, we suspect that America’s largest corporations, such as Amazon or Facebook, would prefer codetermination to suffering the fate of Standard Oil: that is, to be split into several smaller corporations. General size limits also can be highly disruptive, potentially eliminating network benefits and economies of scale.”","tags":[{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"corporate-power","name":"Corporate Power","id":"95341709"},{"slug":"power","name":"Power","id":"95341701"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"From the perspective of large corporations, codetermination may be a more preferable measure to lessen their power than alternatives, such as higher tax rates, or being split into several smaller corporations."},{"id":"95342014","slug":"codetermination-may-help-societies-weather-exogenous-shocks-such-as-covid-19-by-c","sources":[{"slug":"codetermination-and-the-democratic-state"}],"lede":"Giving employees voting power in corporate decision-making processes may help mitigate conflicts at the source. During periods of upheaval that tend to pit the interests of corporations against employees, such as COVID-19, codetermination allows employees to influence and mediate corporate responses, potentially reducing the amplitude of conflicts causes by such shocks.","tags":[{"slug":"stability","name":"Stability","id":"23916385"}],"title":"Codetermination may help societies weather exogenous shocks, such as COVID-19, by creating a mechanism through which firms and employees can take coordinated action."},{"id":"96360198","slug":"several-important-labor-market-institutions-sectoral-collective-bargaining-widesp","sources":[{"slug":"what-does-codetermination-do"}],"lede":"In addition, the authors consider two additional explanations for codeterminations negligible economic impact in Europe: a higher existing baseline of informal worker participation, and the relatively little amount of real power it confers to workers.","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"}],"title":"\"Several important labor market institutions—sectoral collective bargaining, widespread union representation, and extensive regulation—may already capture most of the low-hanging fruit when it comes to affecting worker outcomes, leaving little room for German and Nordic codetermination to make an impact. If this explanation is correct, then codetermination may have larger impacts (either positive or negative) if implemented in contexts like the United States, where these institutions are less powerful...\""},{"id":"96360148","slug":"there-is-little-precedent-for-how-codetermination-might-be-implemented-in-the-us","sources":[{"slug":"what-does-codetermination-do"}],"lede":"“Overall, much of the practical infrastructure of codetermination in European countries relies on the near-universal presence and widespread legitimacy of union representatives. There is therefore little precedent for how codetermination might be implemented in the United States, where many workplaces either lack union representatives entirely, or lack union representatives who hold the confidence of workers.”","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"}],"title":"There is little precedent for how codetermination might be implemented in the US, since European models rely on the near-universal presence and legitimacy of union representatives, a feature lacking in the US."},{"id":"96360083","slug":"codetermination-is-not-a-standalone-institution-rather-it-is-part-of-a-broader-in","sources":[{"slug":"what-does-codetermination-do"}],"lede":"Codetermination in Europe relies on related labor institutions, like widespread union representation and collective bargaining. These elements are crucial not only in understandings its impacts (or lack thereof), but the logistics of how it works. Strengthening these institutions in the U.S. may play an important role in a well-implemented codetermination policy.","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"},{"slug":"labor-power","name":"Labor Power","id":"69609536"},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132"}],"title":"“…codetermination is not a standalone institution. Rather, it is part of a broader institutional and cultural package whose other elements complement codetermination and supply its practical infrastructure. The recent American policy discourse has seen several proposals to introduce other elements of the European package, including stronger union representation and sectoral collective bargaining.”"},{"id":"95342061","slug":"from-1981-2010-in-germany-there-were-only-338-mergers-over-the-same-period-in-the","sources":[{"slug":"codetermination-and-the-democratic-state"}],"lede":"Given the differences in business dynamics between the U.S. and Germany, a concern over codetermination is that giving workers voting power would reduce events such as mergers and hostile takeovers, which play a much more significant role in the U.S. economy. Doing so may thus have greater consequences in the U.S. economy that European ones by hampering the takeover market.","tags":[{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"From 1981 - 2010 in Germany, there were only 338 mergers. Over the same period in the US, there were 60,244 mergers."},{"id":"95835185","slug":"codetermination-could-raise-incentives-for-companies-to-re-incorporate-in-foreign","sources":[{"slug":"codetermination-a-poor-fit-for-u-s-corporations"}],"lede":"The U.S. is already familiar with incentives that drive companies to base themselves in foreign countries whose corporate tax laws are more hospitable. If U.S. companies were now also subject to codetermination laws, they may face greater incentive to dodge such mandates via foreign reincorporation.","tags":[{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"growth","name":"Growth","id":"23932836"},{"slug":"globalization","name":"Globalization","id":"95835183"}],"title":"Codetermination could raise incentives for companies to (re)incorporate in foreign tax-havens."},{"id":"95060840","slug":"codetermination-in-the-u-s-may-entail-reducing-the-flexibility-of-corporate-law-i","sources":[{"slug":"codetermination-a-poor-fit-for-u-s-corporations"}],"lede":"From the source: \"One of the less obvious costs of codetermination lies in the need to reduce the flexibility of corporate law to prevent regulatory arbitrage. Corporations may seek to find some way around the mandatory codetermination rules, and thus lawmakers need to adopt additional mandatory rules to prevent the codetermination regime from being circumvented.”","tags":[{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562"},{"slug":"growth","name":"Growth","id":"23932836"}],"title":"Codetermination in the U.S. may entail reducing the flexibility of corporate law, i.e. enacting more regulations, in order to prevent regulatory arbitrage."},{"id":"121543891","slug":"during-a-2018-rolling-strike-google-employees-included-an-employee-representative","sources":[{"slug":"time-s-up-google-as-tech-workers-walk-out-in-global-rolling-strike"}],"lede":"This is particularly notable given that in Germany, codetermination began at the bottom, as a negotiation between employees and employers. Only later was it codified as national law.","tags":[{"slug":"labor-power","name":"Labor Power","id":"69609536"},{"slug":"implementation","name":"Implementation","id":"69609492"}],"title":"During a 2018 rolling strike, Google employees included an employee representative sitting on the company board on their list of demands."}]}}],"insights":[{"id":"121669970","lede":"-","slug":"using-conservative-estimates-lvt-could-raise-enough-funding-to-cover-the-entirety","title":"Using conservative estimates, LVT could raise enough funding to cover the entirety of either Defense spending, Social Security, or Medicare + Medicaid (roughly $1.1 trillion per year). More optimistic estimates suggest LVT revenues could reach $3.36 trillion per year, nearly enough to cover the entire federal budget.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"pay-fors","name":"Pay-Fors","id":"99763897","lede":"

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

The details of a policy can fundamentally transform its effects. For example, a basic income that replaces all other welfare appeals greatly to conservatives and libertarians, while one that supplements the existing welfare state appeals to progressives.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Neoclassically-informed economic models — which held sway over policymaking for at least the last 50 years — operate on the assumption that raising taxes discourages work.

\n\n

As a result, policy approaches such as unconditional cash transfers to low-income citizens, or raising marginal tax rates on the wealthy are quickly dismissed by economists, under the reasoning that unconditional cash and higher taxes both reduce work incentives.

\n\n

These assumptions have always been sites of theoretical contestation from heterodox economics, but recently, empirical evidence is mounting against these long-held assumptions. Especially around unconditional cash transfers, case studies are finding that they either have no effect on work, or even stimulate economic activity by reducing the risks to entrepreneurship.

We define stability as the resiliency, robustness, and constancy of our nested social, financial, and environmental systems. Stability is the degree to which our systems can withstand stress and maintain their functionality over time.

\n\n

Why do we need stability? All else equal, a stable society is preferable to an unstable society. Stability - the product of the harmonious interaction between parts, or interwoven systems - protects against uncertainty and decay. For example, a healthy body regulates its blood glucose levels to provide cells with their required energy. Too much glucose makes cells sticky, with a paralyzing effect. Too little glucose starves them. What's important is the constancy of glucose regulation within functional limits, and the resiliency to maintain this regulation amidst adversity.

\n\n

Instability occurs when systems transgress functional limits, causing the breakdown of other systems and suffering for those who depend on them. When interlocking systems remain stable, they provide a fertile foundation for positive expectations that fuel investments in progress and broad cooperation throughout society.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Negative Income Tax (NIT) is a form of basic income that phases out as recipient earned income rises. NIT is composed of an "income floor" and a "phaseout rate". The income floor is the amount of cash a recipient with $0 of earned income receives. The phaseout rate is how much the cash benefit is decreased per additional dollar of earned income.

\n\n

For example, consider an NIT with an income floor of $13,000 and a phaseout rate of 50%. A citizen with no income would receive $13,000 per year, often broken up into monthly payments. If the citizen gets a part-time job and begins earning $20,000 per year, they would still receive $3,000 per year in NIT benefits.

Welfare refers to government-sponsored assistance programs intended to ensure that all members of society can meet their basic needs. Examples include social insurance, Medicaid, and disability insurance.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

The EITC is one of the most successful antipoverty programs in the history of US social policy. It provides a work credit that returns money back to low-income earners at tax time, effectively boosting the earnings of low-income wage-earners.

One of the defining conflicts of economic discourse today is the debate over whether government programs should be 'targeted' to particular demographics - such as stimulus payments only going to those who earn less than $75,000 per year - or if they should be 'universal', provided to all citizens (and taxed to adjust distribution afterwards).

\n\n

Universal programs boast the virtue of simplicity, while carrying the burden of size. Universal programs require far less bureaucracy, since no determination of who is eligible for payments is required. Advocates suggest that society can still tailor the distributional effects of universal programs by taxing 'on the backend'. But universal programs thus carry significantly higher gross costs, and require greater disbursement of public funds up front.

\n\n

Targeted programs effectively 'tax on the frontend', adjusting the distribution of a program before giving it out. Thus, they have smaller price tags, but require more complex infrastructure to keep track of eligibility and adjust accordingly.

\n","ledeExcerpt":"One of the defining conflicts of economic discourse today is the debate over whether government programs should be 'targeted' to particular demographics - such as stimulus payments only going to those who earn less than $75,000 per year - or if they should be 'universal', provided to all citizens.\n\nUniversal programs boast the virtue of simplicity, while carrying the burden of size. Universal programs require far less bureaucracy, since no determination of who is eligible for payments is required. Advocates suggest that society can still tailor the distributional effects of universal programs by taxing 'on the backend'. But universal programs thus carry significantly higher gross costs, and require greater disbursement of public funds up front.\n\nTargeted programs effectively 'tax on the frontend', adjusting the distribution of a program before giving it out. Thus, they have smaller price tags, but require more complex infrastructure to keep track of eligibility and adjust accordingly.","featured":true}],"sources":[{"id":"100746732","lede":"The author proposes an expansion of the EITC in order to capture many of the benefits inherent in a basic income, while avoiding some of the usual points of contention and political disagreement.","link":"https://scholarlycommons.law.wlu.edu/crsj/vol26/iss1/4/","slug":"eitc-for-all-a-ubi-compromise-proposal","kind":"Academic Paper","title":"EITC for All: A UBI Compromise Proposal","year":"2019-01-01","researchers":[{"id":"100746733","location":"","name":"Benjamin M. Leff","seoDescription":"","slug":"benjamin-m-leff"}]}]},{"id":"113013346","lede":"Many existing models assume an 'equity-efficiency' tradeoff between redistribution and efficiency. Higher redistribution is assumed to reduce work incentives, reducing overall economic efficiency. The authors suggest that if efficiency were held constant, unconditional transfers like negative income taxation would be preferable to work-dependent ones like the earned income tax credit.","slug":"if-redistribution-does-not-discourage-work-then-nit-style-programs-better-optimiz","title":"If redistribution does not discourage work, then NIT-style programs better optimize social welfare functions relative to to EITC-style ones.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Amidst debates over the merits of continued growth, we begin with the idea that all else equal, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.

\n\n

But there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising improved measures that account for missing elements such as sustainability, equity, leisure time, or digital value, or constructing altogether new proxies (OECD's Better Life Index, for example), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

In economic contexts, there are two main types of efficiency: microeconomic efficiency (where system efficiency is understood as maximizing a particular output given available inputs), and the efficient-market hypothesis (a state where asset prices reflect all available information).

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n\n

Neoclassically-informed economic models — which held sway over policymaking for at least the last 50 years — operate on the assumption that raising taxes discourages work.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n","ledeExcerpt":"Welfare refers to government-sponsored assistance programs intended to ensure that all members of society can meet their basic needs. Examples include social insurance, Medicaid, and disability insurance.\n\nThe vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.","featured":true}],"sources":[{"id":"101097114","lede":"Jain Family Institute's second installation in a four-part series in 'reweaving the safety net', with an eye towards program design for basic income. Here, they focus on the relationship between basic income and other welfare programs. They find that basic income works well when markets work well, but is a poor substitute for public insurance provision.","link":"https://www.jainfamilyinstitute.org/assets/reweaving-the-safety-net-12.15.20.pdf","slug":"reweaving-the-safety-net-the-best-fit-for-guaranteed-income","kind":"Report","title":"Reweaving the Safety Net: The Best Fit For Guaranteed Income","year":"2020-01-01","researchers":[{"id":"101079025","location":"Research Lead, Jain Family Institute","name":"Sidhya Balakrishnan","seoDescription":"","slug":"sidhya-balakrishnan"},{"id":"101079026","location":"","name":"Michael Lewis","seoDescription":"","slug":"michael-lewis"},{"id":"101079028","location":"Jain Family Institute","name":"Stephen Nuñez","seoDescription":"","slug":"stephen-nunez"}]}]},{"id":"116254489","lede":"\"The Earned Income Tax Credit is the largest and perhaps most effective income support program in the U.S., providing roughly 63 billion dollars to about 25 million recipients in 2019. The EITC is unique among income support policies in that it is designed with a “phase-in” to incentivize work: the benefit cannot be claimed if earnings are too low, increases for a time as earnings grow, and then levels off before eventually phasing out like the typical means-tested benefit. This trapezoidal structure is, not surprisingly, the subject of criticism for guaranteed income advocates. While there is some disagreement as to whether the phase-in is effective in increasing workforce participation on the extensive margin (the choice to work at all), the phase-in clearly locks aid behind labor market outcomes that are at least partly outside the control of potential recipients. As noted above, this means the EITC may fail as an economy-wide stabilizer during periods of economic recession.\"","slug":"trapezoidal-income-support-structures-like-the-earned-income-tax-credit-may-fail","title":"Trapezoidal income support structures (like the Earned Income Tax Credit) may fail as an economy-wide stabilizer during periods of economic recession.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"business-cycles","name":"Business Cycles","id":"115027534","lede":"

Business cycles refer to the cyclical intervals of expansion and recession experienced by firms and economies.

\n","ledeExcerpt":"Business cycles refer to the cyclical intervals of expansion and recession experienced by firms and economies.","featured":null},{"slug":"recessions","name":"Recessions","id":"116254487","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n\n

\n","ledeExcerpt":"The EITC is one of the most successful antipoverty programs in the history of US social policy. It provides a work credit that returns money back to low-income earners at tax time, effectively boosting the earnings of low-income wage-earners.","featured":null}],"sources":[{"id":"101097114","lede":"Jain Family Institute's second installation in a four-part series in 'reweaving the safety net', with an eye towards program design for basic income. Here, they focus on the relationship between basic income and other welfare programs. They find that basic income works well when markets work well, but is a poor substitute for public insurance provision.","link":"https://www.jainfamilyinstitute.org/assets/reweaving-the-safety-net-12.15.20.pdf","slug":"reweaving-the-safety-net-the-best-fit-for-guaranteed-income","kind":"Report","title":"Reweaving the Safety Net: The Best Fit For Guaranteed Income","year":"2020-01-01","researchers":[{"id":"101079025","location":"Research Lead, Jain Family Institute","name":"Sidhya Balakrishnan","seoDescription":"","slug":"sidhya-balakrishnan"},{"id":"101079026","location":"","name":"Michael Lewis","seoDescription":"","slug":"michael-lewis"},{"id":"101079028","location":"Jain Family Institute","name":"Stephen Nuñez","seoDescription":"","slug":"stephen-nunez"}]}]},{"id":"101707814","lede":"\"Results from targeted, conditional cash transfer programmes suggested that, in the USA, those that were accompanied by work conditions generally did not yield positive effects. Reforms to the US welfare system were associated with an increase in infant mortality rate for children of foreign-born Mexican women of 3.1 deaths per 1000 live births (SE: 0.001), from a baseline rate of 4.23–6.22 deaths per 1000 live births depending on the state. In a more socioeconomically restricted sample, welfare reform was associated with an increase of 5.9 deaths per 1000 live births (SE: 0.002). Studies on EITC were divided. Two studies found positive effects. In one, US$1000 of EITC was associated with a 2%–3% decline in low birth weight and an increase of 6.4 g in mean birth weight. Preterm birth, small for gestational age and Apgar score were also improved. In another study, EITC was associated with an average increase in birth weight of 15.70 g(SE: 1.211) among unmarried women with high school education or less. Two other studies found no significant effects of EITC.\"","slug":"in-the-usa-the-1970-s-reforms-to-the-welfare-system-that-introduced-targeted-cash","title":"In the USA, the 1970's reforms to the welfare system that introduced targeted cash transfer programs conditional on work were associated with higher infant mortality rates.","showTitleAsQuote":null,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"health","name":"Health","id":"101706852","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

\n","ledeExcerpt":"The EITC is one of the most successful antipoverty programs in the history of US social policy. It provides a work credit that returns money back to low-income earners at tax time, effectively boosting the earnings of low-income wage-earners.","featured":null}],"sources":[{"id":"101707181","lede":"A review of 14 studies on the impact of cash transfer interventions on infant health. The study suggests that unconditional programmes yielded more positive outcomes regarding birth weight and infant mortality relative to programs conditional on labor force participation, which yielded no positive effects.","link":"https://adc.bmj.com/content/archdischild/103/10/920.full.pdf","slug":"do-cash-transfer-programmes-yield-better-health-in-the-first-year-of-life-a-syste","kind":"Academic Paper","title":"Do cash transfer programmes yield better health in the first year of life? A systematic review linking low-income/middle-income and high-income contexts","year":"2018-01-01","researchers":[{"id":"101707170","location":"University of Toronto","name":"Arjumand Siddiqi","seoDescription":"","slug":"arjumand-siddiqi"},{"id":"101707174","location":"University of Toronto","name":"Akshay Rajaram","seoDescription":"","slug":"akshay-rajaram"},{"id":"101707178","location":"Queen's University of Ontario","name":"Steven P. Miller","seoDescription":"","slug":"steven-p-miller"}]}]},{"id":"141181621","lede":"A UBI of $500 per person per month—$2,000 per month for a four-member household—would more than compensate for the loss of SNAP benefits (up to $192 per month for a single person and up to $640 per month for a four-person household) and/or the EITC (the equivalent of up to $44.08 per month for a single person and up to $485.67 per month for a two adult, two-child household). Throwing the refundable child credit (the equivalent of $233.33 per month for a two-child household) into the mix does not change this calculus. Even those who also qualify for WIC (average monthly benefit of roughly $41 per person) on top of SNAP and the EITC will almost always prefer the UBI.","slug":"a-500-per-month-ubi-would-more-than-compensate-for-the-loss-of-snap-and-or-eitc-b","title":"A $500 per month UBI would more than compensate for the loss of SNAP and/or EITC benefits.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n","ledeExcerpt":"The EITC is one of the most successful antipoverty programs in the history of US social policy. It provides a work credit that returns money back to low-income earners at tax time, effectively boosting the earnings of low-income wage-earners.","featured":null}],"sources":[{"id":"141181078","lede":"\"The notion of a universal basic income (“UBI”) has captivated academics, entrepreneurs, policymakers, and ordinary citizens in recent months. Pilot studies of a UBI are underway or in the works on three continents. And prominent voices from across the ideological spectrum have expressed support for a UBI or one of its variants, including libertarian Charles Murray, Facebook co-founder Chris Hughes, labor leader Andy Stern, and — most recently — former President Barack Obama. Although even the most optimistic advocates for a UBI will acknowledge that nationwide implementation lies years away, the design of a basic income will require sustained scholarly attention. This article seeks to advance the conversation among academics and policymakers about UBI implementation.\"","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3346467","slug":"the-architecture-of-a-basic-income","kind":"Academic Paper","title":"The Architecture of a Basic Income","year":"2019-01-01","researchers":[{"id":"141181065","location":"University of San Diego School of Law","name":"Miranda Perry Fleischer","seoDescription":"","slug":"miranda-perry-fleischer"},{"id":"141181075","location":"New York University School of Law","name":"Daniel J. Hemel","seoDescription":"","slug":"daniel-j-hemel"}]}]},{"id":"116254496","lede":"\"Evidence from the U.S. Earned Income Tax Credit program (EITC) may shed light on frequency’s impact in high-income economies. EITC recipient households often have limited access to liquidity, such that even a short delay in income payments leads to notable changes in spending. Studies of EITC spending find that recipients allocate most of this income to savings, debt repayments, vehicle purchases, transportation, education investment, and housing. Evidence from the Chicago EITC Periodic Payment Pilot indicates that periodic payments reduce perceived financial stress, diminish debt accumulation and late fees, and improve mental health. This indicates that credit and savings constraints exist in developed country contexts as well, and deserve more study.\"","slug":"relative-to-annual-payments-more-frequent-periodic-payments-of-the-eitc-indicates","title":"Relative to annual payments, more frequent, periodic payments of the EITC indicates that periodic payments reduce perceived financial stress, diminish debt accumulation and late fees, and improve mental health.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"},{"id":"74233776","title":"Social Wealth Fund","slug":"social-wealth-fund"}],"tags":[{"slug":"mental-health","name":"Mental health","id":"23916384","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

ESG stands for environmental, social, and corporate governance.

\n","ledeExcerpt":"ESG stands for environmental, social, and corporate governance.","featured":null},{"slug":"sustainability","name":"Sustainability","id":"141181471","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

Decarbonization has two components: reducing greenhouse gas emissions from fossil fuels, and absorbing carbon from the atmosphere.

\n","ledeExcerpt":"Decarbonization has two components: reducing greenhouse gas emissions from fossil fuels, and absorbing carbon from the atmosphere.","featured":null}],"sources":[{"id":"143554781","lede":"“We examine the relationship between board-level codetermination and corporate social responsibility in German companies, engaging with two distinct literatures. Most quantitative studies of codetermination focus on its economic impact, with little attention to other outcomes. Studies of corporate social responsibility rarely consider the role of worker representatives. Our new measure of the strength of codetermination, the Mitbestimmungsindex (MB-ix), shows a positive relationship with ‘substantive’ policies such as the adoption of targets for reducing pollution, but not with ‘symbolic’ policies, such as membership of the UN Global Compact. We therefore shed new light on the role of codetermination and provide a more differentiated view of the spread of what has been termed ‘explicit’ corporate social responsibility in Germany.”","link":"https://journals.sagepub.com/doi/abs/10.1177/0959680119830566","slug":"board-level-codetermination-a-driving-force-for-corporate-social-responsibility-i","kind":"Academic Paper","title":"Board-level codetermination: A driving force for corporate social responsibility in German companies?","year":"2019-01-01","researchers":[{"id":"143554778","location":"Wissenschaftszentrum Berlin für Sozialforschung, Germany","name":"Robert Scholz","seoDescription":"","slug":"robert-scholz"},{"id":"143554779","location":"Wissenschaftszentrum Berlin für Sozialforschung, Germany","name":"Sigurt Vitols","seoDescription":"","slug":"sigurt-vitols"}]}]},{"id":"143776361","lede":"“Seventy-one percent of Democratic voters and 56 percent of independent voters believe the government should have a universal basic income program, a 15 and 12 percentage point increase from last February, respectively. Among Republican voters, support grew from 27 percent last winter to 34 percent support in August 2020.”","slug":"71-of-democratic-voters-and-56-of-independent-voters-support-universal-basic-inco","title":"71% of Democratic voters and 56% of Independent voters support universal basic income, while only 34% of Republicans (a 7% percentage point increase from eight months prior).","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899","lede":"","ledeExcerpt":"","featured":true},{"slug":"political-feasibility","name":"Political Feasibility","id":"121668951","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121902123","lede":"The poll ran from August 2nd - 5th in 2020, with a sample size of 2,850 registered voters.","link":"https://thehill.com/hilltv/what-americas-thinking/512099-poll-majority-of-voters-now-say-the-government-should-have-a/","slug":"majority-of-voters-now-say-the-government-should-have-a-universal-basic-income-pr","kind":"Poll","title":"Majority of voters now say the government should have a universal basic income program","year":"2020-01-01","researchers":[]}]},{"id":"143776360","lede":"“The survey found an increase in support across demographic groups, primarily among younger voters and Democratic voters. Sixty-nine percent of voters ages 18 to 34 and 35 to 49 were in favor of universal basic income, a 14 percentage point and 16 percentage point increase, respectively. Support has not yet reached the majority among older voters in the survey, however, it grew from 21 percent in February 2019 to 34 percent in August 2020 among voters 65 years old and beyond.”","slug":"69-of-voters-aged-18-49-support-universal-basic-income-while-only-34-of-voters-ag","title":"69% of voters aged 18 - 49 support universal basic income, while only 34% of voters aged 65 and older are in favor.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121902123","lede":"The poll ran from August 2nd - 5th in 2020, with a sample size of 2,850 registered voters.","link":"https://thehill.com/hilltv/what-americas-thinking/512099-poll-majority-of-voters-now-say-the-government-should-have-a/","slug":"majority-of-voters-now-say-the-government-should-have-a-universal-basic-income-pr","kind":"Poll","title":"Majority of voters now say the government should have a universal basic income program","year":"2020-01-01","researchers":[]}]},{"id":"143776359","lede":"The poll ran from August 2nd - 5th in 2020, with a sample size of 2,850 registered voters. Support increased from 43% in February 2019, and 49% in September 2019.","slug":"55-of-registered-voters-support-universal-basic-income-while-45-are-opposed","title":"55% of registered voters support universal basic income, while 45% are opposed.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899","lede":"","ledeExcerpt":"","featured":true},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121902123","lede":"The poll ran from August 2nd - 5th in 2020, with a sample size of 2,850 registered voters.","link":"https://thehill.com/hilltv/what-americas-thinking/512099-poll-majority-of-voters-now-say-the-government-should-have-a/","slug":"majority-of-voters-now-say-the-government-should-have-a-universal-basic-income-pr","kind":"Poll","title":"Majority of voters now say the government should have a universal basic income program","year":"2020-01-01","researchers":[]}]},{"id":"115436987","lede":"Interpreting results from the Manitoba basic income experiments in the 1970's, the author finds that contrary to concerns that universal payments act as a subsidy for low-wages, where payments were universal and generous, wages increased.","slug":"when-payment-is-conditional-on-work-or-narrowly-targeted-basic-income-will-increa","title":"When payment is conditional on work or narrowly targeted, basic income will increase workers’ market dependence and facilitate exploitation, but when it is generous, broadly available, and crucially, delinked from work, it will obstruct exploitation.","showTitleAsQuote":true,"epistemicStatus":"anecdotal","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"labor-power","name":"Labor Power","id":"69609536","lede":"","ledeExcerpt":"","featured":null},{"slug":"power","name":"Power","id":"95341701","lede":"","ledeExcerpt":"","featured":null},{"slug":"wages","name":"Wages","id":"49378899","lede":"","ledeExcerpt":"","featured":null},{"slug":"universalism","name":"Universalism","id":"101707811","lede":"

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n\n

\n","ledeExcerpt":"Negative Income Tax (NIT) is a form of basic income that phases out as recipient earned income rises. NIT is composed of an \"income floor\" and a \"phaseout rate\". The income floor is the amount of cash a recipient with $0 of earned income receives. The phaseout rate is how much the cash benefit is decreased per additional dollar of earned income.\n\nFor example, consider an NIT with an income floor of $13,000 and a phaseout rate of 50%. A citizen with no income would receive $13,000 per year, often broken up into monthly payments. If the citizen gets a part-time job and begins earning $20,000 per year, they would still receive $3,000 per year in NIT benefits.","featured":null}],"sources":[{"id":"115436871","lede":"Studies the Manitoba Basic Annual Income Experiment from the 1970's in Canada, exploring whether guaranteed income leads to an 'employer response' of either raising or lowering wages. Using an archived survey of local firms, the author finds support for the former, that basic income tightened labor markets and raised wages.","link":"https://academic.oup.com/ser/article-abstract/18/2/493/4866063?redirectedFrom=fulltext","slug":"the-employer-response-to-the-guaranteed-annual-income","kind":"Academic Paper","title":"The Employer Response to the Guaranteed Annual Income","year":"2020-01-01","researchers":[{"id":"115436847","location":"Western University","name":"David Calnitsky","seoDescription":"","slug":"david-calnitsky"}]}]},{"id":"143617241","lede":"Using municipality-level panel data, the study shows that raising the tax rate on land while lowering the tax rate on buildings leads to an increase in land value per acre. Further, this impact differs between residential land and commercial and industrial land. Residential land appears to be more responsive to changes in the tax differential than commercial and industrial land.","slug":"raising-taxes-on-land-value-under-a-split-rate-system-can-increase-land-value-per","title":"Raising taxes on land value under a split-rate system can increase land value per acre. Residential land is more sensitive to these changes than commercial or industrial land.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405","lede":"","ledeExcerpt":"","featured":null},{"slug":"housing","name":"Housing","id":"121669963","lede":"

The (un)affordability of housing is of central concern to modern economics. Some recent research even argues that the majority of rising inequality over the past few decades is driven entirely by rising housing prices.

\n\n

There are generally two main approaches towards reducing housing prices. The first is to increase housing supply, such as by repealing restrictive zoning laws, increasing competition and lowering prices. The second is to provide public housing, where the government owns and operates residential units, usually offering below-market-rate housing.

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

\n","ledeExcerpt":"Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.","featured":true},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Labor institutions are any policy intervention or collective organization that confer workers power in wage and employment determinations. Examples include labor unions, minimum wages, employment protections, unemployment insurance, codetermination, and collective bargaining.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Decarbonization has two components: reducing greenhouse gas emissions from fossil fuels, and absorbing carbon from the atmosphere.

\n","ledeExcerpt":"Decarbonization has two components: reducing greenhouse gas emissions from fossil fuels, and absorbing carbon from the atmosphere.","featured":null}],"sources":[{"id":"141181078","lede":"\"The notion of a universal basic income (“UBI”) has captivated academics, entrepreneurs, policymakers, and ordinary citizens in recent months. Pilot studies of a UBI are underway or in the works on three continents. And prominent voices from across the ideological spectrum have expressed support for a UBI or one of its variants, including libertarian Charles Murray, Facebook co-founder Chris Hughes, labor leader Andy Stern, and — most recently — former President Barack Obama. Although even the most optimistic advocates for a UBI will acknowledge that nationwide implementation lies years away, the design of a basic income will require sustained scholarly attention. This article seeks to advance the conversation among academics and policymakers about UBI implementation.\"","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3346467","slug":"the-architecture-of-a-basic-income","kind":"Academic Paper","title":"The Architecture of a Basic Income","year":"2019-01-01","researchers":[{"id":"141181065","location":"University of San Diego School of Law","name":"Miranda Perry Fleischer","seoDescription":"","slug":"miranda-perry-fleischer"},{"id":"141181075","location":"New York University School of Law","name":"Daniel J. Hemel","seoDescription":"","slug":"daniel-j-hemel"}]}]},{"id":"143365501","lede":"“Assuming that worker representatives have an appropriate mechanism for sharing information with the workforce, worker representation on boards will increase the flow of information between employers and employees, increasing productivity. In recent work, Jäger et. al (2020) find that shared governance increases capital formation without affecting wages in Germany (finding that firms with shared governance show increased labor productivity between two and eight percent, larger fixed capital stock, and higher capital-labor ratios). However, these effects will be muted if there is not a robust mechanism for the workforce to share information collectively with their worker representative.”","slug":"if-worker-representatives-have-appropriate-mechanisms-for-sharing-information-wit","title":"If worker-representatives have appropriate mechanisms for sharing information with the workforce, could increase productivity and innovation by improving information flow within firms.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"information-flow","name":"Information Flow","id":"95060907","lede":"","ledeExcerpt":"","featured":null},{"slug":"innovation","name":"Innovation","id":"69608404","lede":"","ledeExcerpt":"","featured":true},{"slug":"productivity","name":"Productivity","id":"69648335","lede":"","ledeExcerpt":"","featured":true},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

ESG stands for environmental, social, and corporate governance.

\n","ledeExcerpt":"ESG stands for environmental, social, and corporate governance.","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"143365365","lede":"“In 2018, in response to growing concerns over corporate wealth, wage stagnation, and income inequality, Senator Elizabeth Warren proposed a bill that would require U.S. companies with more than one billion dollars in annual revenue to obtain federal corporate charters. Perhaps the most dramatic requirement of this proposed federal law is that it would mandate that at least forty percent of the board members of a corporation subject to the law be elected by employees. As this note will show, the proposal would depart significantly from the recent history of U.S. corporate law. Over the past few years, however, U.S. corporations have been adopting their own internal changes to ensure greater representation of stakeholder interests—those of employees, customers, and neighbors, as well as other constituencies—in corporate decision making within a framework commonly referred to as ESG (Environmental, Social, and Governance). This note provides a comparative analysis of the advantages and disadvantages of board codetermination, largely through discussion of its historical existence under German law, and ESG in order to determine whether government-enforced stakeholder representation or private ordering provides a better solution to the socioeconomic problems Senator Warren, as well as others, currently seeks to address.”","link":"https://www.nyujilp.org/wp-content/uploads/2020/07/NYI206-1.pdf","slug":"codetermination-and-esg-viable-alternatives-to-shareholder-primacy","kind":"Academic Paper","title":"Codetermination and ESG: Viable Alternatives to Shareholder Primacy?","year":"2020-01-01","researchers":[{"id":"143365364","location":"","name":"Pierre J. Allegaert","seoDescription":"","slug":"pierre-j-allegaert"}]}]},{"id":"143365363","lede":"“The recent performance of the German economy has begun to change the way people view codetermination. By 2016, its popularity among the German people rose to an all-time high. The German business community looks at it in a more positive light, and foreign businesspeople—long baffled by the complex codetermination laws—have come to see some of its advantages.”","slug":"in-2016-the-popularity-of-codetermination-among-the-german-people-rose-to-an-all","title":"In 2016, the popularity of codetermination among the German people rose to an all time high.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899","lede":"","ledeExcerpt":"","featured":true},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"germany","name":"Germany","id":"143363841","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"143365358","lede":"“Codetermination—a system of shared corporate governance between shareholders and workers—has been mostly ignored within the U.S. corporate governance literature. When it has made an appearance, it has largely served as a foil for shareholder primacy and as an example of corporate deviance. However, over the last fifteen years—and especially in the last five—empirical research on codetermination has shown surprising results as to the system’s efficiency, resilience, and benefits to stakeholders. This Article reviews the extant American legal scholarship on codetermination and provides a fresh look at the current state of codetermination theory and practice. Rather than experiencing the failures predicted by our law-and-economics framework of shareholder primacy, codetermination has fared better than alternative systems, particularly with respect to the ravages of the Global Financial Crisis of 2008. At a time when corporate leaders, politicians, and academics are rethinking the shareholder primacy model, this Article presents an updated perspective on codetermination and invites U.S. scholars to reexamine their prior assumptions.”","link":"https://scholarship.law.ufl.edu/cgi/viewcontent.cgi?article=1611&context=flr#:~:text=Codetermination%E2%80%94a%20system%20of%20shared,an%20example%20of%20corporate%20deviance","slug":"codetermination-in-theory-and-practice","kind":"Academic Paper","title":"Codetermination in Theory and Practice","year":"2021-01-01","researchers":[{"id":"143365356","location":"Professor and Robert G. Storey Distinguished Faculty Fellow, SMU-Dedman School of Law","name":"Grant M. Hayden","seoDescription":"","slug":"grant-m-hayden"},{"id":"143365357","location":"Callis Family Professor, Saint Louis University School of Law","name":"Matthew T. Bodie","seoDescription":"","slug":"matthew-t-bodie"}]}]},{"id":"143363843","lede":"The analysis was performed by the World Economic Forum. Germany received a score of 87.5 out of 100, compared to the 2nd place US, with a score of 86.5. Germany’s high score is driven largely by innovation in the automobile industry.","slug":"in-2018-germany-was-ranked-as-the-world-s-most-innovative-economy-outperforming-t","title":"In 2018, Germany was ranked as the world's most innovative economy, outperforming the US.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"innovation","name":"Innovation","id":"69608404","lede":"","ledeExcerpt":"","featured":true},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"We define growth as the expansion of wealth in society; growth is about generating a \"a bigger pie\".\n\nAmidst debates over the merits of continued growth, we begin with the idea that *all else equal*, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.\n\nBut there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising revised measures, such as Tyler Cowen's notion of wealth plus\" (GDP, plus measures of leisure time, household production, and environmental considerations), or constructing altogether new proxies (OECD's 'Better Life Index), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.","featured":true},{"slug":"education","name":"Education","id":"101119962","lede":"","ledeExcerpt":"","featured":null},{"slug":"health","name":"Health","id":"101706852","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"142030274","lede":"“This article presents the findings of a review of the impact of non-contributory cash transfers on individuals and households in low- and middle-income countries, covering the literature of 15 years, from 2000 to 2015. Based on evidence extracted from 165 studies, retrieved through a systematic search and screening process, this article discusses the impact of cash transfers on 35 indicators covering six outcome areas: monetary poverty; education; health and nutrition; savings, investment and production; work; and empowerment. For most of the studies, cash transfers contributed to progress in the selected indicators in the direction intended by policymakers. Despite variations in the size and strength of the underlying evidence base by outcome and indicator, this finding is consistent across all outcome areas. The article also investigates unintended effects of cash transfer receipt, such as potential reductions in adult work effort and increased fertility, finding limited evidence for such unintended effects. Finally, the article highlights gaps in the evidence base and areas which would benefit from additional future research.”","link":"https://www.cambridge.org/core/journals/journal-of-social-policy/article/abs/impact-of-cash-transfers-a-review-of-the-evidence-from-low-and-middleincome-countries/F8273371A30A504CBDCAFA32BF6F2EAD","slug":"the-impact-of-cash-transfers-a-review-of-the-evidence-from-low-and-middle-income","kind":"Academic Paper","title":"The Impact of Cash Transfers: A Review of the Evidence from Low- and Middle-income Countries","year":"2018-01-01","researchers":[{"id":"142030262","location":"","name":"Francesca Bastagli","seoDescription":"","slug":"francesca-bastagli"},{"id":"142030270","location":"","name":"Jessica Hagen-Zanker","seoDescription":"","slug":"jessica-hagen-zanker"},{"id":"142030271","location":"Luke Harman","name":"Luke Harman","seoDescription":"","slug":"luke-harman"},{"id":"142030272","location":"","name":"Georgina Sturge","seoDescription":"","slug":"georgina-sturge"},{"id":"142030273","location":"","name":"Tanja Schmidt","seoDescription":"","slug":"tanja-schmidt"}]}]},{"id":"141648706","lede":"“However, these higher investment incentives can come at a cost to some households who may see their land value change substantially due to zoning decisions. Protection against sudden changes to land values for landholders can be built into a land value tax system by changing the prescribed valuation method for residential property to assume that the current use is the highest and best use.”","slug":"one-option-to-protect-landowners-from-the-negative-impacts-of-sudden-changes-in-l","title":"One option to protect landowners from the negative impacts of sudden changes in land valuation is to change the land valuation method to assume that current use is the ‘highest and best use’.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"141645302","lede":"In 2012 the Australian Capital Territory (the Territory) began a multi-decade task of major land tax reform to exchange taxes on transactions for taxes on the economic rents that accrue to landholders. This report evaluates the economic effects of these changes at the first interval, 2016, to tease out potential lessons from this rare policy experiment.","link":"https://www.prosper.org.au/2016/09/the-first-interval-evaluating-acts-land-value-tax-transition-full-report/","slug":"the-first-interval-evaluating-act-s-land-value-tax-transition","kind":"Report","title":"The First Interval: Evaluating ACT’s Land Value Tax Transition","year":"2016-01-01","researchers":[{"id":"141645157","location":"","name":"Cameron Murray","seoDescription":"","slug":"cameron-murray"}]}]},{"id":"141788193","lede":"“There is limited attention to the impact of the broader social and fiscal policy environment on outcomes within the existing body of evidence. It is widely agreed that financing a UBI will require new revenue streams or diversions from existing programs. The interactions between UBI and additional taxes or decreases in expenditures from other programs are needed for a more complete picture of program effects.”","slug":"the-potential-trade-offs-between-ubi-and-other-programs-are-largely-unaddressed","title":"The potential trade-offs between UBI and other programs are largely unaddressed.","showTitleAsQuote":false,"epistemicStatus":"practical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"future-research","name":"Future Research","id":"100833586","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121902233","lede":"","link":"https://basicincome.stanford.edu/uploads/Umbrella%20Review%20BI_final.pdf","slug":"what-we-know-about-universal-basic-income-a-cross-synthesis-of-reviews","kind":"Report","title":"What We Know About Universal Basic Income: A Cross-Synthesis of Reviews","year":"2020-01-01","researchers":[{"id":"121902232","location":"Postdoctoral Research Fellow with the Stanford Basic Income Lab","name":"Rebecca Hasdell","seoDescription":"","slug":"rebecca-hasdell"}]}]},{"id":"141788043","lede":"“Examining the variability in interventions that are claimed to approximate a UBI is important. In countries with minimal or fragmented welfare states, the injection of cash through payments or categorical transfers may play a very different role than when interventions are introduced into and evaluated against a more robust social safety net. Simply put, effects that are observed under some social and economic conditions may not transfer elsewhere. Evidence is also limited for how cash transfers may interact with the existing fabric of social supports in countries with well established social safety nets, or how cash transfers compare to spending on other public goods in settings with less collective infrastructure. This is highly relevant to decisions about universality in settings where individuals are guaranteed benefits in an existing system of supports. Experiments which are underway in many countries across the globe will allow for comparison between individuals receiving benefits under the current system and those who receive additional unconditional cash and clarify the relative effectiveness of unconditional cash under different welfare schemes.”","slug":"the-contexts-where-interventions-are-introduced-are-relevant-for-anticipating-how","title":"The contexts where interventions are introduced are relevant for anticipating how interventions may work across settings and are also important for determining what types of programs are considered as unconditional and universal.","showTitleAsQuote":false,"epistemicStatus":"practical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"future-research","name":"Future Research","id":"100833586","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121902233","lede":"","link":"https://basicincome.stanford.edu/uploads/Umbrella%20Review%20BI_final.pdf","slug":"what-we-know-about-universal-basic-income-a-cross-synthesis-of-reviews","kind":"Report","title":"What We Know About Universal Basic Income: A Cross-Synthesis of Reviews","year":"2020-01-01","researchers":[{"id":"121902232","location":"Postdoctoral Research Fellow with the Stanford Basic Income Lab","name":"Rebecca Hasdell","seoDescription":"","slug":"rebecca-hasdell"}]}]},{"id":"141788042","lede":"“There are a variety of other outcomes that have been pursued by researchers but where evidence is less certain. More research is needed on outcomes such as stigma and social cohesion to clarify the imperative to provide transfers universally. Our review surfaced that impacts of UBI-type programs are not uniform across all groups. Sub-group analysis that more comprehensively examines how intersectional factors—such as gender, race and age—modify intervention impacts could elucidate for whom UBI matters and why. It is evident from the social inequalities’ literature that income differences between groups matter for many of the outcomes that a UBI is intended to improve. Without careful attention to uneven impacts, interventions risk leaving existing inequalities untouched, or even exacerbating them, rather than ameliorating the issue. Further research is required to identify how different policy designs address not only absolute changes in outcomes among recipients, but also relative gaps based on income levels.”","slug":"findings-are-generally-positive-that-ubi-type-programs-alleviate-poverty-and-impr","title":"Findings are generally positive that UBI-type programs alleviate poverty and improve health and education outcomes and that the effects on labor market participation are minimal.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"poverty","name":"Poverty","id":"100414757","lede":"

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

In economics, consumption is the use of resources to satisfy current needs and wants. This is in contrast to spending resources for future income, known as investing.

\n","ledeExcerpt":"In economics, consumption is the use of resources to satisfy current needs and wants. This is in contrast to spending resources for future income, known as investing.","featured":null},{"slug":"spending","name":"Spending","id":"23933660","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"141757810","lede":"“As of December 2021, the expanded Child Tax Credit has delivered six monthly payments, reaching over 61 million children in more than 36 million households nationwide. A continuous stream of new research has tracked the impact of these payments. A challenge for policymakers and fellow researchers alike has been how best to understand the key findings emerging from this regularly evolving evidence base.\n\nThis research roundup compiles what we know so far about families’ awareness of the new program, who has received it, how families are using it, and how it is impacting their lives. It pulls from a large set of publicly available sources, from the US Census Household Pulse to surveys, focus groups, and other data held about families with children as conducted by polling firms, research organizations, service providers, banking and finance companies, and more. The evidence is reviewed and organized across eight central themes: access; income; poverty; spending; food; financial stress; employment; and equity.”","link":"https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/61f946b1cb0bb75fd2ca03ad/1643726515657/Child-Tax-Credit-Research-Roundup-CPSP-2021.pdf","slug":"research-roundup-of-the-expanded-child-tax-credit-the-first-6-months","kind":"Report","title":"Research Roundup of the Expanded Child Tax Credit: The First 6 Months","year":"2021-01-01","researchers":[{"id":"141757809","location":"Center on Poverty and Social Policy at Columbia University","name":"Megan A. Curran","seoDescription":"","slug":"megan-a-curran"}]}]},{"id":"141757818","lede":"The growth in anti-poverty effects were due primarily to the IRS being able to reach more eligible children as the program progressed.","slug":"over-5-months-of-the-expanded-child-tax-credit-the-number-of-children-kept-from-p","title":"Over 5 months of the expanded Child Tax Credit, the number of children kept from poverty each month grew from 3 million in July 2021 to 3.8 million in November 2021.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"child-poverty","name":"Child Poverty","id":"141757813","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Neoclassically-informed economic models — which held sway over policymaking for at least the last 50 years — operate on the assumption that raising taxes discourages work.

\n\n

In economics, consumption is the use of resources to satisfy current needs and wants. This is in contrast to spending resources for future income, known as investing.

\n","ledeExcerpt":"In economics, consumption is the use of resources to satisfy current needs and wants. This is in contrast to spending resources for future income, known as investing.","featured":null}],"sources":[{"id":"141593942","lede":"\"A key policy question in evaluating social programs to address childhood poverty is how families receiving unconditional financial support would spend those funds. Economists have limited empirical evidence on this topic in the U.S. We provide causal estimates of financial and time investments in infants among families living in poverty from a large-scale, multi-site randomized controlled study of monthly unconditional cash transfers starting at the time of a child’s birth. We find that the cash transfers increased spending on child-specific goods and mothers’ early-learning activities with their infants. The marginal propensity to consume child-focused items from the cash transfer exceeded that from other income, consistent with the behavioral cues in the cash transfer design. We find no statistically detectable offsets in household earnings nor statistically detectable impacts in other pre-registered outcomes related to general household expenditures, maternal labor supply, infants’ time in childcare, or mothers’ subjective well-being.\"","link":"https://www.nber.org/papers/w30379","slug":"unconditional-cash-and-family-investments-in-infants-evidence-from-a-large-scale","kind":"Academic Paper","title":"Unconditional Cash and Family Investments in Infants: Evidence from a Large-Scale Cash Transfer Experiment in the U.S.","year":"2022-01-01","researchers":[{"id":"141593847","location":"New York University","name":"Hirokazu Yoshikawa","seoDescription":"","slug":"hirokazu-yoshikawa"},{"id":"141593832","location":"University of Wisconsin-Madison","name":"Sarah Halpern-Meekin","seoDescription":"","slug":"sarah-halpern-meekin"},{"id":"141593835","location":"Columbia University","name":"Kimberly G. Noble","seoDescription":"","slug":"kimberly-g-noble"},{"id":"141593829","location":"University of Maryland","name":"Nathan A. Fox","seoDescription":"","slug":"nathan-a-fox"},{"id":"141593830","location":"University of Wisconsin","name":"Katherine Magnuson","seoDescription":"","slug":"katherine-magnuson"},{"id":"141593826","location":"Research Associate, Duke University","name":"Lisa A. Gennetian","seoDescription":"","slug":"lisa-a-gennetian"},{"id":"141593827","location":"University of California, Irvine","name":"Greg Duncan","seoDescription":"","slug":"greg-duncan"}]}]},{"id":"141593798","lede":"However in less developed Mexican cities (well below median density), the price effects of cash transfers were stronger. The authors show that these inflationary effects are largely due to these villages being less connected to outside economies, and having less competition among local suppliers.","slug":"in-developed-mexican-cities-cash-transfers-caused-negligible-increases-in-prices","title":"In developed Mexican cities, cash transfers caused negligible increases in prices, while equivalently-valued in-kind transfers caused a 4% fall in prices.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"inflation","name":"Inflation","id":"49378895","lede":"

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

\n","ledeExcerpt":"Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.","featured":true},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n\n

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Public goods are commodities or services made available to all members of a society that are non-rivalrous, meaning one's use of the good or service does not diminish from another's. Examples may include national defense, infrastructure, education, or environmental protection.

\n","ledeExcerpt":"Public goods are commodities or services made available to all members of a society that are non-rivalrous, meaning one's use of the good or service does not diminish from another's. Examples may include national defense, infrastructure, education, or environmental protection.","featured":null}],"sources":[{"id":"141199864","lede":"“This paper explores the relationship between aggregate land rents and public expenditure in a residential urban economy.”","link":"https://www.jstor.org/stable/1884466","slug":"aggregate-land-rents-expenditure-on-public-goods-and-optimal-city-size","kind":"Academic Paper","title":"Aggregate Land Rents, Expenditure on Public Goods, and Optimal City Size","year":"1979-01-01","researchers":[{"id":"141199854","location":"Queen's University, Canada","name":"Richard J. Arnott","seoDescription":"","slug":"richard-j-arnott"},{"id":"141199860","location":"Oxford University, England","name":"Joseph Stiglitz","seoDescription":"","slug":"joseph-stiglitz"}]}]},{"id":"141199753","lede":"-","slug":"a-tax-credit-provision-alongside-moving-from-single-rate-to-split-rate-property-t","title":"A tax credit provision alongside moving from single-rate to split-rate property taxing could mitigate regressive tendencies.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

Poverty is an economic condition with consequences that ripple out into many dimensions of social life. Poverty is a significant factor in crime, physical health, mental health, and parental quality.

\n\n

Poverty is an economic condition with consequences that ripple out into many dimensions of social life. Poverty is a significant factor in crime, physical health, mental health, and parental quality.

\n","ledeExcerpt":"Poverty is an economic condition with consequences that ripple out into many dimensions of social life. Poverty is a significant factor in crime, physical health, mental health, and parental quality.","featured":null}],"sources":[{"id":"117694300","lede":"The universal basic income has become a widely discussed measure in policy circles around the world. In this review, we cover the evidence relevant to its potential impact in the US, and in developed countries more generally. Many studies find no statistically significant effect of an unconditional cash transfer on the probability of working. In the studies that do find an effect on labor supply, the effect is small: a 10% income increase induced by an unconditional cash transfer decreases labor supply by about 1%. The evidence shows that an unconditional cash transfer can improve health and educational outcomes, and decrease criminality and drug & alcohol use, especially among the most disadvantaged youths.","link":"https://www.nber.org/papers/w24337","slug":"no-strings-attached-the-behavioral-effects-of-u-s-unconditional-cash-transfer-pro","kind":"Academic Paper","title":"No Strings Attached: The Behavioral Effects of U.S. Unconditional Cash Transfer Programs","year":"2018-01-01","researchers":[{"id":"117694297","location":"University of Pennsylvania","name":"Ioana Marinescu","seoDescription":"","slug":"ioana-marinescu"}]},{"id":"141181975","lede":"\"This paper has two purposes. First, it documents the historical context of MINCOME, a Canadian guaranteed annual income field experiment (1974 to 1979). Second, it uses routinely collected health administration data and a quasi-experimental design to document an 8.5 percent reduction in the hospitalization rate for participants relative to controls, particularly for accidents and injuries and mental health. We also found that participant contacts with physicians declined, especially for mental health, and that more adolescents continued into grade 12. We found no increase in fertility, family dissolution rates, or improved birth outcomes. We conclude that a relatively modest GAI can improve population health, suggesting significant health system savings.\"","link":"https://s3.us-west-2.amazonaws.com/secure.notion-static.com/3c2cf45a-b115-416e-be2c-2c4084f363e4/townwithnopoverty.pdf?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Credential=AKIAT73L2G45EIPT3X45/20220919/us-west-2/s3/aws4_request&X-Amz-Date=20220919T144417Z&X-Amz-Expires=86400&X-Amz-Signature=7648c537ffaf71fdae38b15ea952e9aa1b47cf74acab9b16059cf2179ad3f9e7&X-Amz-SignedHeaders=host&response-content-disposition=filename%20%3D%22townwithnopoverty.pdf%22&x-id=GetObject","slug":"the-town-with-no-poverty-the-health-effects-of-a-canadian-guaranteed-annual-incom","kind":"Academic Paper","title":"The Town with No Poverty: The Health Effects of a Canadian Guaranteed Annual Income Field Experiment","year":"2011-01-01","researchers":[{"id":"141181966","location":"Community Health Sciences, University of Manitoba, Winnipeg","name":"Evelyn Forget","seoDescription":"","slug":"evelyn-forget"}]}]},{"id":"141181466","lede":"While this proposal represents a sharp break from current approaches, the authors do suggest a series of incremental changes that can smooth the path to such a basic income.","slug":"one-review-of-the-basic-income-literature-suggests-starting-with-a-500-month-ubi","title":"One review of the basic income literature suggests starting with a $500/month UBI, paid to every citizen on a biweekly basis and administered by the SSA, funded by consolidating some – but not all – existing welfare programs, plus a modest increase in taxes.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Neoclassically-informed economic models — which held sway over policymaking for at least the last 50 years — operate on the assumption that raising taxes discourages work.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Poverty is an economic condition with consequences that ripple out into many dimensions of social life. Poverty is a significant factor in crime, physical health, mental health, and parental quality.

\n","ledeExcerpt":"Poverty is an economic condition with consequences that ripple out into many dimensions of social life. Poverty is a significant factor in crime, physical health, mental health, and parental quality.","featured":null},{"slug":"investment","name":"Investment","id":"121525298","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"122563735","lede":"“In 1997, the Mexican government designed the conditional cash transfer program Progresa, which became the worldwide model of a new approach to social programs, simultaneously targeting human capital accumulation and poverty reduction. A large literature has documented the short and medium-term impacts of the Mexican program and its successors in other countries. Using Progresa’s experimental evaluation design originally rolled out in 1997 -2000, and a tracking survey conducted 20 years later, this paper studies the differential long-term impacts of exposure to Progresa. We focus on two cohorts of children: i) those that during the period of differential exposure were in -utero or in the first years of life, and ii) those who during the period of differential exposure were transitioning from primary to secondary school. Results for the early childhood cohort, 18–20-year-old at endline , shows that differential exposure to Progresa during the early years led to positive impact s on educational attainment and labor income expectations. This constitutes unique long -term evidence on the returns of an at -scale intervention on investments in human capital during the first 1000 days of life . Results for the school cohort - in their early 30s at endline - show that the short- term impacts of differential exposure to Progresa on schooling were sustained in the long-run and manifested themselves in larger labor incomes, more geographical mobility including through international migration, and later family formation.”","link":"https://publications.iadb.org/publications/english/document/Education-Income-and-Mobility-Experimental-Impacts-of-Childhood-Exposure-to-Progresa-after-20-Years.pdf","slug":"education-income-and-mobility-experimental-impacts-of-childhood-exposure-to-progr","kind":"Report","title":"Education, Income and Mobility: Experimental Impacts of Childhood Exposure to Progresa after 20 Years","year":"2021-01-01","researchers":[{"id":"122563732","location":"","name":"M. Caridad Araujo ","seoDescription":"","slug":"m-caridad-araujo"},{"id":"122563734","location":"","name":"Karen Macours","seoDescription":"","slug":"karen-macours"}]}]},{"id":"23916383","lede":"\"When the control group was compared to themselves as a baseline, there was no significant change in scores on the Kessler 10. However, the treatment group showed significant improvement in scores when compared to themselves at baseline. Cohen’s d for this effect was .29, again a small effect. Taken together, these findings suggest that the treatment group experienced clinically and statistically significant improvements in their mental health that the control group did not - moving from likely having a mild mental health disorder to likely mental wellness over the year-long intervention.\"","slug":"insight-1","title":"Recipients of Stockton's unconditional basic income experienced clinically significant gains in mental health.","showTitleAsQuote":false,"epistemicStatus":"","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"mental-health","name":"Mental health","id":"23916384","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

\n","ledeExcerpt":"The (un)affordability of housing is of central concern to modern economics. Some recent research even argues that the majority of rising inequality over the past few decades is driven entirely by rising housing prices.\n\nThere are generally two main approaches towards reducing housing prices. The first is to increase housing supply, such as by repealing restrictive zoning laws, increasing competition and lowering prices. The second is to provide public housing, where the government owns and operates residential units, usually offering below-market-rate housing.","featured":true}],"sources":[{"id":"121744550","lede":"\"This study examines how replacing a uniform property tax with a land value tax (LVT) would shift the tax burden for single-family residential properties in Tarrant County, Texas, over the period 1997–2006. Results suggest that a LVT would shift the tax burden away from single-family properties and on to other property classes. For the more recent years in the sample, the average tax liability for single-family properties would decrease about 30 percent, regardless of household income, and SuitsIndices suggest that, within residential properties, a LVT would be slightly more progressive than a property tax. Horizontal equity problems would be greatest for the lowest-valued properties relative to other properties. This study also examines how a LVT would change property values due to the effects of tax capitalization.\"","link":"https://www.researchgate.net/profile/Elizabeth-Plummer/publication/228366356_Evidence_on_the_Distributional_Effects_of_a_Land_Value_Tax_on_Residential_Households/links/00b4952a09003cc24d000000/Evidence-on-the-Distributional-Effects-of-a-Land-Value-Tax-on-Residential-Households.pdf","slug":"evidence-on-the-distributional-effects-of-a-land-value-tax-on-residential-househo","kind":"Academic Paper","title":"Evidence on the Distributional Effects of a Land Value Tax on Residential Households","year":"2010-01-01","researchers":[{"id":"121744549","location":"Department of Accounting, Neeley School of Business, Texas Christian University","name":"Elizabeth Plummer","seoDescription":"","slug":"elizabeth-plummer"}]}]},{"id":"122007431","lede":"“In several cases, no significant difference appears between the outputs a given type of firm would produce with the technology used by the cooperatives and with the conventional firms' technology. In almost all cases in which a significant difference occurs, the SCOPs would produce more with their own technology, regardless of the data set or estimation method. The exception is the GLS estimate for the Mechanical Engineering industry with Data Set 2, but the GMM estimate indicates that SCOPs would produce more with their own technology in that industry as well. In contrast, in a number of industries conventional firms would produce more using the cooperatives' technology with their current input levels. Overall, these results suggest that SCOPs are as productive as conventional firms, or more productive, and use their inputs better. Differences occur across industries, but it seems that in several industries conventional firms would be better off if they behaved like labor-managed firms”","slug":"a-study-of-french-firms-finds-that-labor-managed-firms-may-use-their-inputs-more","title":"A study of French firms finds that labor-managed firms may use their inputs more efficiently than conventional firms.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745","lede":"

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

\n","ledeExcerpt":"Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.","featured":true},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447","lede":"

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null}],"sources":[{"id":"49378750","lede":"","link":"https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI-Macroeconomic-Effects-of-UBI-201708.pdf","slug":"modeling-the-macroeconomic-effects-of-a-universal-basic-income","kind":"","title":"Modeling the Macroeconomic Effects of a Universal Basic Income","year":"2017-08-29","researchers":[{"id":"49378747","location":"","name":"Michalis Nikiforos","seoDescription":"","slug":"michalis-nikiforos"},{"id":"49378748","location":"","name":"Marshall Steinbaum","seoDescription":"","slug":"marshall-steinbaum"},{"id":"49378749","location":"","name":"Gennaro Zezza","seoDescription":"","slug":"gennaro-zezza"}]}]},{"id":"49378905","lede":"Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans.","slug":"a-deficit-funded-ubi-of-usd6k-year-is-modeled-to-increase-federal-debt-by-63-5-by","title":"A deficit-funded UBI of $6k/year is modeled to increase federal debt by 63.5% by 2027.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null}],"sources":[{"id":"49378903","lede":"","link":"https://budgetmodel.wharton.upenn.edu/issues/2018/3/29/options-for-universal-basic-income-dynamic-modeling","slug":"options-for-universal-basic-income-dynamic-modeling","kind":"","title":"Options for Universal Basic Income: Dynamic Modeling","year":"2018-01-01","researchers":[]}]},{"id":"49378923","lede":"Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans.","slug":"a-deficit-funded-usd6k-year-ubi-is-modeled-to-decrease-gdp-by-6-1-by-2027-and-9-3","title":"A deficit-funded, $6k/year UBI is modeled to decrease GDP by 6.1% by 2027, and 9.3% by 2032","showTitleAsQuote":false,"epistemicStatus":"","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752","lede":"

GDP refers to the total value of a nation's production of goods and services.

\n\n

The formula for GDP is: consumer spending (C) + business investment (I) + government spending (G) + net exports (X-M). Nominal GDP refers to the unadjusted total, whereas "Real GDP" adjusts that total to account for inflation.

\n\n

Simon Kuznets invented the notion in 1937. It has since become the guiding metric to measure not only the volume and value of national production, but the welfare of the nation. Of all the criticisms of such "fetishization of GDP" (Joseph Stiglitz), the simplest may be that given by Kuznets himself, who wrote: "The welfare of a nation can scarcely be inferred from a measurement of national income."

\n\n

Thirty years later, Kuznets adds: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Deficit spending is when a government's spending exceeds its revenue, thus adding to the budget deficit.

\n\n

Since 1970, the US government has used deficit spending for all but four years, with larger budgets of spending that revenue. To close the gap, governments typically borrow by issuing Treasury bonds, adding to the national debt.

\n\n

The virtues and vices of deficit spending are highly contested, increasingly so in recent years. John Maynard Keynes famously quipped: "Anything we can actually do, we can afford", suggesting that so long as the economy's productive capacity remains underutilized, deficit spending can stimulate economic activity, to the benefit of all.

\n\n

Countervailing opinions, especially those of the neoliberal paradigm, argue that any deficit spending negatively impacts the economy, and should be strictly avoided.

\n","ledeExcerpt":"Deficit spending is when a government's spending exceeds its revenue, thus adding to the budget deficit.\n\nSince 1970, the US government has used deficit spending for all but four years, with larger budgets of spending that revenue. To close the gap, governments typically borrow by issuing Treasury bonds, adding to the national debt.\n\nThe virtues and vices of deficit spending are highly contested, increasingly so in recent years. John Maynard Keynes famously quipped: \"Anything we can actually do, we can afford\", suggesting that so long as the economy's productive capacity remains underutilized, deficit spending can stimulate economic activity, to the benefit of all.\n\nCountervailing opinions, especially those of the neoliberal paradigm, argue that any deficit spending negatively impacts the economy, and should be strictly avoided.","featured":null},{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447","lede":"

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null}],"sources":[{"id":"49378903","lede":"","link":"https://budgetmodel.wharton.upenn.edu/issues/2018/3/29/options-for-universal-basic-income-dynamic-modeling","slug":"options-for-universal-basic-income-dynamic-modeling","kind":"","title":"Options for Universal Basic Income: Dynamic Modeling","year":"2018-01-01","researchers":[]}]},{"id":"49378932","lede":"Using the Penn Wharton Budget Model, this study ran econometric simulations to predict the effects of various basic income plans.","slug":"a-usd6k-year-ubi-funded-by-an-11-25-payroll-tax-is-modeled-to-increase-federal-re","title":"A $6k year UBI funded by an 11.25% payroll tax is modeled to increase federal revenues by 56.1% by 2027.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"taxes","name":"Taxes","id":"49378929","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null}],"sources":[{"id":"49378903","lede":"","link":"https://budgetmodel.wharton.upenn.edu/issues/2018/3/29/options-for-universal-basic-income-dynamic-modeling","slug":"options-for-universal-basic-income-dynamic-modeling","kind":"","title":"Options for Universal Basic Income: Dynamic Modeling","year":"2018-01-01","researchers":[]}]},{"id":"69358633","lede":"A worker cooperative is a business that is entirely owned and controlled by its workers.","slug":"as-of-2018-there-are-465-worker-co-ops-in-the-us-employing-6-454-workers-and-gene","title":"As of 2018 there are 465 worker co-ops in the US employing 6,454 workers and generating $505 million in estimated revenue.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"worker-cooperatives","name":"Worker Cooperatives","id":"69358615","lede":"

Worker cooperatives are fully owned and managed by employees. Workers thus fully share in the profits or losses of the company, and manage decision making in democratic fashion.

\n","ledeExcerpt":"Worker cooperatives are fully owned and managed by employees. Workers thus fully share in the profits or losses of the company, and manage decision making in democratic fashion.","featured":null}],"sources":[{"id":"69358492","lede":"A long line of critical fiscal theorists has pointed to the limits of financing a politics of emancipation through levies on a regressive economy. We need to heed their warnings today.","link":"https://www.dissentmagazine.org/article/the-tax-trap","slug":"the-tax-trap","kind":"","title":"The Tax Trap","year":"2020-12-31","researchers":[{"id":"69358490","location":"","name":"Daniel Wortel-London","seoDescription":"","slug":"daniel-wortel-london"}]}]},{"id":"23933343","lede":"-","slug":"insight-3","title":"One econometric model predicts a NIT implies a 13% drop in the savings rate and a subsequent 22% reduction in the capital stock.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"Negative Income Tax (NIT) is a form of basic income that phases out as recipient earned income rises. NIT is composed of an \"income floor\" and a \"phaseout rate\". The income floor is the amount of cash a recipient with $0 of earned income receives. The phaseout rate is how much the cash benefit is decreased per additional dollar of earned income.\n\nFor example, consider an NIT with an income floor of $13,000 and a phaseout rate of 50%. A citizen with no income would receive $13,000 per year, often broken up into monthly payments. If the citizen gets a part-time job and begins earning $20,000 per year, they would still receive $3,000 per year in NIT benefits.","featured":null}],"sources":[{"id":"23932845","lede":"A simulation of the economy, suggesting the optimal Negative Income Tax consists of a 22% tax rate and a benefit amount equal to 11% of per-capita GDP. NIT outperforms a flat tax reform by a considerable welfare margin.","link":"https://www.sciencedirect.com/science/article/abs/pii/S0165188916300550?via%3Dihub","slug":"nit-picking-the-macroeconomic-effects-of-a-negative-income-tax","kind":"Academic Paper","title":"NIT Picking: The macroeconomic effects of a negative income tax","year":"2016-01-01","researchers":[{"id":"23932844","location":"","name":"Martin Lopez-Daneri","seoDescription":"","slug":"martin-lopez-daneri"}]}]},{"id":"23933529","lede":"This finding comes from the Penn Wharton Budget Model.","slug":"ubi-with-consumption-tax-would-contract-capital","title":"A $12k/year UBI funded via a 22% increase in consumption taxes would contract both capital and output.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

Generally, "capital" is any durable, produced good that is being 'put to work' as an input in further production; capital is any productive asset engaged in the process of producing further value.

\n\n

Examples include a factory and its machinery, financial assets that accrue value, or intellectual property such as patents.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"Negative Income Tax (NIT) is a form of basic income that phases out as recipient earned income rises. NIT is composed of an \"income floor\" and a \"phaseout rate\". The income floor is the amount of cash a recipient with $0 of earned income receives. The phaseout rate is how much the cash benefit is decreased per additional dollar of earned income.\n\nFor example, consider an NIT with an income floor of $13,000 and a phaseout rate of 50%. A citizen with no income would receive $13,000 per year, often broken up into monthly payments. If the citizen gets a part-time job and begins earning $20,000 per year, they would still receive $3,000 per year in NIT benefits.","featured":null}],"sources":[{"id":"23932845","lede":"A simulation of the economy, suggesting the optimal Negative Income Tax consists of a 22% tax rate and a benefit amount equal to 11% of per-capita GDP. NIT outperforms a flat tax reform by a considerable welfare margin.","link":"https://www.sciencedirect.com/science/article/abs/pii/S0165188916300550?via%3Dihub","slug":"nit-picking-the-macroeconomic-effects-of-a-negative-income-tax","kind":"Academic Paper","title":"NIT Picking: The macroeconomic effects of a negative income tax","year":"2016-01-01","researchers":[{"id":"23932844","location":"","name":"Martin Lopez-Daneri","seoDescription":"","slug":"martin-lopez-daneri"}]}]},{"id":"49378900","lede":"Using The Levy Institute's model of the economy, The Roosevelt Institute ran simulations to predict the effects of various levels of Universal Basic Income on the economy.","slug":"a-tax-funded-usd1k-month-ubi-is-modeled-to-increase-nominal-wages-by-0-51-over-ba","title":"A tax-funded, $1k/month UBI is modeled to increase nominal wages by 0.51% over baseline after 8 years.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

But as Robert Dahl writes: "...the agrarian economy and society on which it was based underwent a revolutionary transformation into a new system of commercial and industrial capitalism that automatically generated vast inequalities of wealth, income, status, and power. These inequalities were in turn a result of liberty of a certain kind–liberty to accumulate unlimited economic resources and to organize economic activity into hierarchically governed enterprises."

\n\n

Or, as David Schweickart comments: "Contemporary capitalism celebrates democracy, yet denies us our democratic rights at precisely the point where they might be utilized most immediately and concretely: at the place where we spend most of the active and alert hours of our adult lives."

\n\n

Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see "workplace democracy" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.

\n","ledeExcerpt":"Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see \"workplace democracy\" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.","featured":null}],"sources":[{"id":"95341635","lede":"A qualitative analysis of the potential codetermination holds for protecting democratic institutions from the dangers inherent in the accumulation of extreme waelth by private corporations. The authors argue that by splitting corporate voting rights between shareholders and employees, codetermination could play a similar role to the Constitutional separation of powers.","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3680769","slug":"codetermination-and-the-democratic-state","kind":"","title":"Codetermination and the Democratic State","year":"2020-01-01","researchers":[{"id":"95060147","location":"","name":"Jens Dammann","seoDescription":"","slug":"jens-dammann"},{"id":"95060339","location":"","name":"Horst Eudenmueller","seoDescription":"","slug":"horst-eudenmueller"}]}]},{"id":"121697153","lede":"\"Moving away from an income-based approach will likely create a lot of taxpayer confusion. And even though the tax bills split land value and the value of improvements, these reported values could change even when the total assessed values stay the same. Any reallocation of valuation between land and improvements will likely create great taxpayer angst and anger and will require additional resources for the extensive taxpayer education.\"","slug":"any-reallocation-of-valuation-between-land-and-improvements-will-require-resource","title":"Any reallocation of tax burden between land and improvements will require resources for taxpayer education.","showTitleAsQuote":false,"epistemicStatus":"practical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121697139","lede":"","link":"https://www.dcpolicycenter.org/publications/land-value-tax/","slug":"land-value-tax-can-it-work-in-the-district","kind":"Report","title":"Land Value Tax: Can it Work in the District?","year":"2019-01-01","researchers":[{"id":"121697137","location":"D.C. Policy Center","name":"Yesim Sayin Taylor","seoDescription":"","slug":"yesim-sayin-taylor"}]}]},{"id":"121669955","lede":"These figures assume a LVT rate of 100%, a $1.2 trillion estimate for America’s land rents, 209 million American citizens above the age of 18, and a land share of 50%.","slug":"pairing-a-national-lvt-with-a-ubi-funded-by-the-revenue-would-provide-a-net-gain","title":"Pairing a national LVT with a UBI funded by the revenue would provide a net gain to two-adult households with property values at $500,000 or less.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Precedents offer real, historical examples of policies in action. Whether Denmark's experience with land value taxation, Germany's experience with codetermination, or California, Seattle, and Denver's experiences with basic income, precedents can help ground economic theory in realy world experience.

\n","ledeExcerpt":"Precedents offer real, historical examples of policies in action. Whether Denmark's experience with land value taxation, Germany's experience with codetermination, or California, Seattle, and Denver's experiences with basic income, precedents can help ground economic theory in realy world experience.","featured":null}],"sources":[{"id":"121817859","lede":"A report for the incoming Mayor of London, advocating for a land value tax trial in the city.","link":"https://www.london.gov.uk/sites/default/files/final-draft-lvt-report_2.pdf","slug":"a-land-value-tax-for-london","kind":"Report","title":"A Land Value Tax for London?","year":"2016-01-01","researchers":[{"id":"121817853","location":"","name":"Nicky Gavron","seoDescription":"","slug":"nicky-gavron"},{"id":"121817855","location":"","name":"Steve O'Connell","seoDescription":"","slug":"steve-o-connell"},{"id":"121817856","location":"","name":"Andrew Boff","seoDescription":"","slug":"andrew-boff"},{"id":"121817857","location":"","name":"Tom Copley","seoDescription":"","slug":"tom-copley"},{"id":"121817858","location":"","name":"Navin Shah","seoDescription":"","slug":"navin-shah"}]}]},{"id":"121817871","lede":"“Tax revenues from land continue to rise and increased by 171 per cent between 1994 and 1999. Much of this increase arose from revaluations, raising tax rates and improvements in collection efficiency. Reportedly, the imposition of land tax has ‘encouraged some property owners who stood to benefit by keeping their land idle… either to develop it or to sell it.’”","slug":"estonia-introduced-a-land-value-tax-in-1993-while-the-tax-is-national-the-rates-a","title":"Estonia introduced a land value tax in 1993. While the tax is national, the rates annually determined by municipalities, who receive 100% of the revenue. Rates range from 0.5 to 2% of the market value of land. Agricultural land is taxed less.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n","ledeExcerpt":"Precedents offer real, historical examples of policies in action. Whether Denmark's experience with land value taxation, Germany's experience with codetermination, or California, Seattle, and Denver's experiences with basic income, precedents can help ground economic theory in realy world experience.","featured":null}],"sources":[{"id":"121817859","lede":"A report for the incoming Mayor of London, advocating for a land value tax trial in the city.","link":"https://www.london.gov.uk/sites/default/files/final-draft-lvt-report_2.pdf","slug":"a-land-value-tax-for-london","kind":"Report","title":"A Land Value Tax for London?","year":"2016-01-01","researchers":[{"id":"121817853","location":"","name":"Nicky Gavron","seoDescription":"","slug":"nicky-gavron"},{"id":"121817855","location":"","name":"Steve O'Connell","seoDescription":"","slug":"steve-o-connell"},{"id":"121817856","location":"","name":"Andrew Boff","seoDescription":"","slug":"andrew-boff"},{"id":"121817857","location":"","name":"Tom Copley","seoDescription":"","slug":"tom-copley"},{"id":"121817858","location":"","name":"Navin Shah","seoDescription":"","slug":"navin-shah"}]}]},{"id":"121817863","lede":"“The most recent amendment [to the system] also contains a new section providing for a special ‘penalty tax’ on vacant lots in urban areas, raising their tax rate to 1.0 to 3.0 per cent, representing at the highest end a trebling of the normal tax. The purpose, of course, is to bring such lots into the market or spur their owners to develop them.”","slug":"finland-uses-a-land-value-tax-the-rate-on-land-with-buildings-ranges-from-0-5-to","title":"Finland uses a land value tax. The rate on land with buildings ranges from 0.5 to 1% of land value, with lower rates for land with permanent housing, higher rates for land used as summer cottages, and a ‘penalty’ rate of 3% on vacant lots in urban areas.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n","ledeExcerpt":"Precedents offer real, historical examples of policies in action. Whether Denmark's experience with land value taxation, Germany's experience with codetermination, or California, Seattle, and Denver's experiences with basic income, precedents can help ground economic theory in realy world experience.","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121817859","lede":"A report for the incoming Mayor of London, advocating for a land value tax trial in the city.","link":"https://www.london.gov.uk/sites/default/files/final-draft-lvt-report_2.pdf","slug":"a-land-value-tax-for-london","kind":"Report","title":"A Land Value Tax for London?","year":"2016-01-01","researchers":[{"id":"121817853","location":"","name":"Nicky Gavron","seoDescription":"","slug":"nicky-gavron"},{"id":"121817855","location":"","name":"Steve O'Connell","seoDescription":"","slug":"steve-o-connell"},{"id":"121817856","location":"","name":"Andrew Boff","seoDescription":"","slug":"andrew-boff"},{"id":"121817857","location":"","name":"Tom Copley","seoDescription":"","slug":"tom-copley"},{"id":"121817858","location":"","name":"Navin Shah","seoDescription":"","slug":"navin-shah"}]}]},{"id":"121817862","lede":"Harrisburg enacted a LVT in 1975, reducing tax on buildings to one-half of those on land, and eventually increased the tax on land to six times that on property. From 1982 to 2009, there was $4.8 billion in new investments, businesses increased, and over 40,000 building permits were issued. The tax base went from $212 million to $1.6 billion, the number of residential units shot up, the crime rate went down 46%, and the number of vacant structures dropped by 80%.","slug":"the-city-of-harrisburg-pennsylvania-offers-a-strong-example-of-a-successful-land","title":"The city of Harrisburg, Pennsylvania, offers a strong example of a successful land value tax.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"precedents","name":"Precedents","id":"121744884","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Neoliberalism is a school of thought that began taking shape with the formation of The Mont Pelerin Society in the 1940's. It rose to power in the US in the 1980's, with tenets including: free trade benefits all; the government's role in the economy should remain confined to addressing market failures rather than pursuing proactive industrial policy; social benefits should be tied to work requirements; public services should be privatized; industry and finance should be maximally deregulated; stock market prices are accurate signals of all relevant information; deficits invariably lead to inflation; the primary role of indepenedent central banks is to fight inflation; and that taxes invariably discourage work, entrepreneurship, and growth.

\n\n

While the 2020 Biden administration is often suggested as marking the end of neoliberalism's singular hold over policymaking, the question remains: what comes next?

\n\n

The safety net refers to government programs that unconditionally assure a minimum amount of welfare that no citizen can fall below.

\n\n

Examples of safety net programs include SNAP benefits (food stamps), Medicaid, and basic income.

\n\n

By way of example, imagine a tight-rope strung across a deep chasm. If falling to the ground poses danger, a safety net is strung to catch anyone who falls, mitigating the danger.

\n","ledeExcerpt":"The safety net refers to government programs that unconditionally assure a minimum amount of welfare that no citizen can fall below.\n\nExamples of safety net programs include SNAP benefits (food stamps), Medicaid, and basic income.\n\nBy way of example, imagine a tight-rope strung across a deep chasm. If falling to the ground poses danger, a safety net is strung to catch anyone who falls, mitigating the danger.","featured":null},{"slug":"universalism","name":"Universalism","id":"101707811","lede":"

\n\n

\n","ledeExcerpt":"One of the defining conflicts of economic discourse today is the debate over whether government programs should be 'targeted' to particular demographics - such as stimulus payments only going to those who earn less than $75,000 per year - or if they should be 'universal', provided to all citizens.\n\nUniversal programs boast the virtue of simplicity, while carrying the burden of size. Universal programs require far less bureaucracy, since no determination of who is eligible for payments is required. Advocates suggest that society can still tailor the distributional effects of universal programs by taxing 'on the backend'. But universal programs thus carry significantly higher gross costs, and require greater disbursement of public funds up front.\n\nTargeted programs effectively 'tax on the frontend', adjusting the distribution of a program before giving it out. Thus, they have smaller price tags, but require more complex infrastructure to keep track of eligibility and adjust accordingly.","featured":true}],"sources":[{"id":"113013422","lede":"A critical analysis of the sentiment that government aid represents a subsidy paid to low-wage employers, allowing companies like Walmart or McDonald's to pay workers less than they would otherwise, if there were less government aid.","link":"https://www.brookings.edu/opinions/does-the-government-subsidize-low-wage-employers/","slug":"does-the-government-subsidize-low-wage-employers","kind":"Article","title":"Does the Government Subsidize Low Wage Employers?","year":null,"researchers":[{"id":"113013419","location":"Brookings Institution","name":"Gary Burtless","seoDescription":"","slug":"gary-burtless"}]}]},{"id":"113013416","lede":"\"Second, evaluations have found a great diversity of positive impacts. For example, a partial list of outcomes affected in a positive way in one study or another, according to Bastagli et al (2016), includes income, assets, savings, borrowing, total expenditure, food expenditure, dietary diversity, school attendance, test scores, cognitive development, use of health facilities, labor force participation, child labor migration, domestic violence, women’s empowerment, marriage, fertility, and use of contraception.\"","slug":"cash-transfer-studies-in-the-developing-world-have-found-positive-impacts-on-inco","title":"Cash transfer studies in the developing world have found positive impacts on: income, assets, savings, borrowing, total expenditure, food expenditure, dietary diversity, school attendance, test scores, cognitive development, use of health facilities, labor force participation, child labor migration, domestic violence, women's empowerment, marriage, fertility, and use of contraception.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"One of the defining conflicts of economic discourse today is the debate over whether government programs should be 'targeted' to particular demographics - such as stimulus payments only going to those who earn less than $75,000 per year - or if they should be 'universal', provided to all citizens.\n\nUniversal programs boast the virtue of simplicity, while carrying the burden of size. Universal programs require far less bureaucracy, since no determination of who is eligible for payments is required. Advocates suggest that society can still tailor the distributional effects of universal programs by taxing 'on the backend'. But universal programs thus carry significantly higher gross costs, and require greater disbursement of public funds up front.\n\nTargeted programs effectively 'tax on the frontend', adjusting the distribution of a program before giving it out. Thus, they have smaller price tags, but require more complex infrastructure to keep track of eligibility and adjust accordingly.","featured":true}],"sources":[{"id":"113013402","lede":"Surveying the evidence from basic income in the developing world, the authors address three questions: what are recipients likely to do with additional income, whether this would unlock more growth, and the potential consequences of universal transfers as opposed to targeting.","link":"https://www.nber.org/papers/w25598","slug":"universal-basic-income-in-the-developing-world","kind":"Academic Paper","title":"Universal Basic Income In the Developing World","year":"2019-01-01","researchers":[{"id":"113013404","location":"Massachusetts Institute of Technology","name":"Abhijit Banerjee","seoDescription":"","slug":"abhijit-banerjee"},{"id":"113013406","location":"University of California, San Diego","name":"Paul Niehaus","seoDescription":"","slug":"paul-niehaus"},{"id":"113013410","location":"Massachusetts Institute of Technology","name":"Tavneet Suri","seoDescription":"","slug":"tavneet-suri"}]}]},{"id":"113013376","lede":"Many traditional economic models assume that if workers receive unconditional transfers, like basic income, they will reduce their working hours. However, recent experimental evidence contradicts this long-held assumption. In theory, if unconditional cash doesn't discourage work, it better optimizes a social welfare function that programs conditional on work, like earned income credit programs.","slug":"if-redistributive-programs-do-not-discourage-work-then-guaranteed-income-paired-w","title":"If redistributive programs do not discourage work, then guaranteed income paired with high phaseout rates optimizes social welfare functions","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745","lede":"

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Neoclassically-informed economic models — which held sway over policymaking for at least the last 50 years — operate on the assumption that raising taxes discourages work.

\n\n

\n","ledeExcerpt":"Neoclassically-informed economic models - which held sway over policymaking for at least the last 50 years - operate on the assumption that raising taxes discourages work, as do unconditional cash transfers.\n\nAs a result, policy approaches such as raising marginal tax rates on the wealthy are quickly dismissed by economists, under the reasoning that doing so would discourage their work, and hurt growth overall. Similarly, cash transfer programs have been tied to work requirements in order to mitigate the risk of discouraging work.\n\nThese assumptions have always been sites of theoretical contestation from heterodox economics, but recently, empirical evidence is mounting against these long-held assumptions. Especially around unconditional cash transfers, case studies are finding that they either have no effect on work, or even stimulate economic activity by reducing the risks to entrepreneurship.","featured":true},{"slug":"redistribution","name":"Redistribution","id":"74016537","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"113013290","lede":"A paper studying the best way to design income transfer programs - like basic income, or the earned income tax credit - given various behavioral responses at the \"intensive\" and \"extensive\" margins. When behavior changes most at the intensive margin (how hard people work), the optimal progran is a negative income tax with a substantial guaranteed income. But when behavior changes most at the extensive margin (whether people work), earned income credits are better.","link":"https://www.nber.org/papers/w7708","slug":"optimal-income-transfer-programs-intensive-versus-extensive-labor-supply-response","kind":"Academic Paper","title":"Optimal Income Transfer Programs: Intensive Versus Extensive Labor Supply Responses","year":"2000-01-01","researchers":[{"id":"113013336","location":"University of California, Berkeley","name":"Emmanuel Saez","seoDescription":"","slug":"emmanuel-saez"}]}]},{"id":"114773136","lede":"Many of these new entrepreneurs who were newly eligible for SNAP didn't enroll in the expanded food stamps program. Instead, as Walter Frick writes in The Atlantic, \"simply knowing that they could fall back on food stamps if their venture failed was enough to make them more likely to take risks.\"","slug":"following-snap-eligibility-expansion-newly-eligible-households-are-20-more-likely","title":"Following SNAP eligibility expansion, newly-eligible households are 20% more likely to own a business, driven by an increase in new firm birth of 12%.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"entrepreneurship","name":"Entrepreneurship","id":"112058724","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

The safety net refers to government programs that unconditionally assure a minimum amount of welfare that no citizen can fall below.

\n\n

Examples of safety net programs include SNAP benefits (food stamps), Medicaid, and basic income.

\n\n

By way of example, imagine a tight-rope strung across a deep chasm. If falling to the ground poses danger, a safety net is strung to catch anyone who falls, mitigating the danger.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n","ledeExcerpt":"Welfare refers to government-sponsored assistance programs intended to ensure that all members of society can meet their basic needs. Examples include social insurance, Medicaid, and disability insurance.\n\nThe vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.","featured":true}],"sources":[{"id":"114773131","lede":"In the mid-2000's, expanding SNAP (formerly known as food stamps) eligibility increased enrollment by 3-5%. Newly eligible households were 20% more likely to own a business. The results are driven by newly-eligible households that did not enroll in SNAP, which the author suggests is an indication that uninsured risk from leaving wage employment is a primary barrier to entrepreneurship.","link":"https://www.hbs.edu/ris/Publication%20Files/16-143_2cf7ba14-5bfa-4c34-85d9-0edc0ddc7ce6.pdf","slug":"food-stamp-entrepreneurs","kind":"Academic Paper","title":"Food Stamp Entrepreneurs","year":"2016-01-01","researchers":[{"id":"114754586","location":"Harvard University","name":"Gareth Olds","seoDescription":"","slug":"gareth-olds"}]}]},{"id":"121520486","lede":"“Some further evidence we can examine is Alaska’s inflation statistics. Alaska has had a universal basic income via the Alaska Permanent Fund Dividend, which has provided each resident between $500 and $3,000 per year funded by state oil assets, since 1982. Since implementing that program, Alaska has had lower inflation than the rest of the United States, whereas before it had equal. While no formal causal study has yet confirmed whether this supports the potential “deflation” effect of universal basic income I discussed earlier, it does provide suggestive evidence that it is possible and that a US-based universal basic income would not cause significant inflation. We can also appreciate the post-transfer deflation from Kuwait, where Kuwait granted a $3,500 transfer to all its citizens in 2011.”","slug":"alaska-dividend-inflation","title":" Since implementing the APF - Alaska's quasi universal basic income - Alaska has experienced no spike in inflation, and notably, had lower inflation than the rest of the United States.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"inflation","name":"Inflation","id":"49378895","lede":"

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null}],"sources":[{"id":"121520484","lede":"One of the most common arguments against universal basic income is the idea that it will cause inflation. In this paper I will review the theoretical interactions between an universal basic income and the price level, as well as emerging empirical price effects from cash transfer programs across the world. I discuss what type of macroeconomic shock universal basic income qualifies as, and I also characterize universal basic income through the lens of orthodox and heterodox monetary theories. Applying Milton Friedman’s Quantity Theory of Money, I theorize about under what conditions universal basic income may cause inflation. Finally, I dissect how public policy choices may affect the inflationary potential of universal basic income.","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3920748","slug":"universal-basic-income-and-inflation-reviewing-theory-and-evidence","kind":"Academic Paper","title":"Universal Basic Income and Inflation: Reviewing Theory and Evidence","year":"2021-01-01","researchers":[{"id":"121520483","location":"Independent","name":"Joshua Miller","seoDescription":"","slug":"joshua-miller"}]}]},{"id":"121765953","lede":"“The problem is not isolated to a few companies or to a few industries: In most industries, the majority of companies spent over half of their total profits on buybacks between 2015 and 2017. Sixty percent (59.6 percent) of all non-financial, insurance, and real estate companies spent over half of their total profits on buybacks. During that same period, public companies in the restaurant, retail, and food manufacturing industries—employers of many of America’s low-wage workers, who are disproportionately women and people of color—spent 136.5 percent, 79.2 percent, and 58.2 percent, respectively, of their net profits on share buybacks.”","slug":"across-the-u-s-economy-from-2015-2017-companies-spent-58-6-of-their-net-profits-o","title":"Across the U.S. economy from 2015 - 2017, companies spent 58.6% of their net profits on stock buybacks.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245","lede":"

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

"Short-Termism" is a term often used to critique an excessive focus on short-term results at the expense of long-term interests. For example, in corporate contexts, this can mean making decisions that maximize quarterly revenues at the expense of long-term firm interests or value-creation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"investment","name":"Investment","id":"121525298","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"wages","name":"Wages","id":"49378899","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"wages","name":"Wages","id":"49378899","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121765909","lede":"","link":"https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI-NELP-Curbing-Stock-Buybacks-201806.pdf","slug":"curbing-stock-buybacks-a-crucial-step-to-raising-worker-pay-and-reducing-inequali","kind":"Report","title":"Curbing Stock Buybacks: A Crucial Step to Raising Worker Pay and Reducing Inequality","year":null,"researchers":[{"id":"121765907","location":" Senior researcher and policy analyst at the National Employment Law Project (NELP)","name":"Irene Tung","seoDescription":"","slug":"irene-tung"},{"id":"121765908","location":" Program director for the Roosevelt Institute","name":"Katy Milani","seoDescription":"","slug":"katy-milani"}]}]},{"id":"121765933","lede":"“The top spenders on buybacks in retail are Home Depot, Walmart, CVS, Lowe’s, and Target. On average, these companies spent 87 percent of their net profits on buybacks, and they could pay the median worker in their respective companies an average of 56 percent more each year. The average ratio of CEO pay to median worker compensation among these companies is 587 to 1—with average CEO total compensation at over $13 million.”","slug":"if-lowes-home-depot-and-cvs-each-reallocated-the-money-spent-on-buybacks-in-2015","title":"If Lowes, Home Depot, and CVS each reallocated the money spent on buybacks in 2015 - 2017 to workers, each worker would receive a raise of at least $18,000 per year.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245","lede":"

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"wages","name":"Wages","id":"49378899","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"investment","name":"Investment","id":"121525298","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121765909","lede":"","link":"https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI-NELP-Curbing-Stock-Buybacks-201806.pdf","slug":"curbing-stock-buybacks-a-crucial-step-to-raising-worker-pay-and-reducing-inequali","kind":"Report","title":"Curbing Stock Buybacks: A Crucial Step to Raising Worker Pay and Reducing Inequality","year":null,"researchers":[{"id":"121765907","location":" Senior researcher and policy analyst at the National Employment Law Project (NELP)","name":"Irene Tung","seoDescription":"","slug":"irene-tung"},{"id":"121765908","location":" Program director for the Roosevelt Institute","name":"Katy Milani","seoDescription":"","slug":"katy-milani"}]}]},{"id":"121765926","lede":"The authors find that these companies could pay the median worker an average of 25% more if they spent buyback funds on wages instead.","slug":"the-five-companies-who-spent-the-most-on-stock-buybacks-from-2015-2017-were-mcdon","title":"The five companies who spent the most on stock buybacks from 2015 - 2017 were McDonald's, YUM Brands, Starbucks, Restaurant Brands International, and Domino's Pizza.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245","lede":"

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"wages","name":"Wages","id":"49378899","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121765909","lede":"","link":"https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI-NELP-Curbing-Stock-Buybacks-201806.pdf","slug":"curbing-stock-buybacks-a-crucial-step-to-raising-worker-pay-and-reducing-inequali","kind":"Report","title":"Curbing Stock Buybacks: A Crucial Step to Raising Worker Pay and Reducing Inequality","year":null,"researchers":[{"id":"121765907","location":" Senior researcher and policy analyst at the National Employment Law Project (NELP)","name":"Irene Tung","seoDescription":"","slug":"irene-tung"},{"id":"121765908","location":" Program director for the Roosevelt Institute","name":"Katy Milani","seoDescription":"","slug":"katy-milani"}]}]},{"id":"121765921","lede":"“The growth of stock buybacks can be traced to 1982, when the Securities and Exchange Commission (SEC) relaxed the rules governing the circumstances in which companies could be held liable for manipulating the market for their own gain. Before 1982, companies buying back their shares potentially faced civil and criminal penalties for manipulating the markets. However, the SEC made the rules around buybacks more lax, creating greater leeway for buyback activity that fell within broad timing and volume parameters, essentially shielding companies from civil or criminal liability for such activity. This gave corporate executives license to buy back company shares with minimal threat of enforcement for market manipulation from the SEC (Palladino 2018).”","slug":"prior-to-the-1982-sec-ruling-that-rolled-back-restrictions-on-open-market-share-r","title":"Prior to the 1982 SEC ruling that rolled back restrictions on open-market share repurchasing, companies buying back their shares potentially faced civil and criminal penalties for manipulating markets.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245","lede":"

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"investment","name":"Investment","id":"121525298","lede":"","ledeExcerpt":"","featured":null},{"slug":"taxes","name":"Taxes","id":"49378929","lede":"","ledeExcerpt":"","featured":null},{"slug":"neoliberalism","name":"Neoliberalism","id":"118560604","lede":"

\n\n

While the 2020 Biden administration is often suggested as marking the end of neoliberalism's singular hold over policymaking, the question remains: what comes next?

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"investment","name":"Investment","id":"121525298","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null},{"slug":"investment","name":"Investment","id":"121525298","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"\"Short-Termism\" is a term often used to critique an excessive focus on short-term results at the expense of long-term interests. For example, in corporate contexts, this can mean making decisions that maximize quarterly revenues at the expense of long-term firm interests or value-creation.","featured":null}],"sources":[{"id":"121765909","lede":"","link":"https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI-NELP-Curbing-Stock-Buybacks-201806.pdf","slug":"curbing-stock-buybacks-a-crucial-step-to-raising-worker-pay-and-reducing-inequali","kind":"Report","title":"Curbing Stock Buybacks: A Crucial Step to Raising Worker Pay and Reducing Inequality","year":null,"researchers":[{"id":"121765907","location":" Senior researcher and policy analyst at the National Employment Law Project (NELP)","name":"Irene Tung","seoDescription":"","slug":"irene-tung"},{"id":"121765908","location":" Program director for the Roosevelt Institute","name":"Katy Milani","seoDescription":"","slug":"katy-milani"}]}]},{"id":"121765901","lede":"“Even more disturbing, there is clear evidence that a substantial number of corporate executives today use buybacks as a chance to cash out the shares of the company they received as executive pay. We give stock to corporate managers to convince them to create the kind of long-term value that benefits American companies and the workers and communities they serve. Instead, what we are seeing is that executives are using buybacks as a chance to cash out their compensation at investor expense…Executives often claim that a buyback is the right long-term strategy for the company, and they’re not always wrong. But if that’s the case, they should want to hold the stock over the long run, not cash it out once a buyback is announced.”","slug":"an-analysis-by-the-sec-commissioner-found-that-executives-frequently-exploit-stoc","title":"An analysis by the SEC Commissioner found that executives frequently exploit stock buybacks to cash out their company shares at inflated prices.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245","lede":"

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n","ledeExcerpt":"Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.","featured":null}],"sources":[{"id":"69648528","lede":"Survey studies from 1998, 1996, and 1984 suggest that Swedish codetermination has been well received by managers and labor representatives alike.","link":"https://journals.sagepub.com/doi/abs/10.1177/0143831X00214003","slug":"codetermination-in-sweden-myth-and-reality","kind":"","title":"Codetermination in Sweden: Myth and Reality","year":"2000-01-01","researchers":[{"id":"69648527","location":"","name":"Klas Levinson","seoDescription":"","slug":"klas-levinson"}]}]},{"id":"116532858","lede":"Cash recipients saved a total of $17,571 compared to their baseline shelter use. Non-cash participants only saved $9,399 compared to their baseline shelter use.","slug":"recently-homeless-recipients-of-a-cash-transfer-saved-an-extra-usd8-172-of-public","title":"Recently homeless recipients of a cash transfer saved an extra $8,172 of public expenditure by spending fewer nights in homeless shelters, more than recuperating the entire cost of the transfer program.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"We define stability as the resiliency, robustness, and constancy of our nested social, financial, and environmental systems. Stability is the degree to which our systems can withstand stress and maintain their functionality over time. \n\nWhy do we need stability? All else equal, a stable society is preferable to an unstable society. Stability - the product of the harmonious interaction between parts, or interwoven systems - protects against uncertainty and decay. For example, a healthy body regulates its blood glucose levels to provide cells with their required energy. Too much glucose makes cells sticky, with a paralyzing effect. Too little glucose starves them. What's important is the constancy of glucose regulation within functional limits, and the resiliency to maintain this regulation amidst adversity.\n\nInstability occurs when systems transgress functional limits, causing the breakdown of other systems and suffering for those who depend on them. When interlocking systems remain stable, they provide a fertile foundation for positive expectations that fuel investments in progress and broad cooperation throughout society.","featured":true}],"sources":[{"id":"121744909","lede":"Fifteen cities in Pennsylvania are pioneering an innovative approach to local tax reform that harnesses market incentives for urban renewal. Opting for the so-called \"two-rate\" or \"split-rate\" property tax, these cities are lowering taxes on buildings, thereby encouraging improvements and renovations, while raising the tax on land values, thus discouraging land speculation. The resulting infill development as indicated by increased building permits means down-town jobs, efficient use of urban infrastructure, an improved housing stock, and less urban sprawl. Cities in other states are poised to follow Pennsylvania's example.","link":"https://www.jstor.org/stable/3487258","slug":"pennsylvania-s-success-with-local-property-tax-reform-the-split-rate-tax","kind":"Academic Paper","title":"Pennsylvania's Success with Local Property Tax Reform: The Split Rate Tax","year":"1997-01-01","researchers":[{"id":"121744908","location":"","name":"Alanna Hartzok","seoDescription":"","slug":"alanna-hartzok"}]}]},{"id":"121744901","lede":"-","slug":"applied-methods-for-distinguishing-land-value-from-property-value-are-subject-to","title":"Applied methods for distinguishing land value from property value are subject to error.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121744896","lede":"\"Land value taxation has numerous potential advantages compared to conventional property taxes on capital and land. The models that establish these advantages, however, are grounded in the unlikely assumption that land values are assessed without error. This paper demonstrates that levying taxes based on land values assessed with error is equivalent to the application of one tax rate to the true value of land and a different effective tax rate to capital. The model demonstrates that a land value tax will have at most the distortion effects of a property tax, even with the worst possible land value assessment errors.\"","link":"https://www.jstor.org/stable/27759702","slug":"implications-of-a-land-value-tax-with-error-in-assessed-values","kind":"Academic Paper","title":"Implications of a Land Value Tax with Error in Assessed Values","year":"2009-01-01","researchers":[{"id":"121744891","location":"","name":"Jeffrey I. Chapman","seoDescription":"","slug":"jeffrey-i-chapman"},{"id":"121744892","location":"","name":"Robert J. Johnston","seoDescription":"","slug":"robert-j-johnston"},{"id":"121744895","location":"","name":"Timothy J. Tyrrell","seoDescription":"","slug":"timothy-j-tyrrell"}]}]},{"id":"121744897","lede":"\"Based on this reconceptualized model, we prove that a land value tax will have at most the distortion effects of a property tax of equivalent rate, even with the worst possible land value assessment errors. That is, we show that arguments of Mills (1998) and others are incorrect; benefits of land value taxation persist even in cases where land values are estimated with error.\"","slug":"benefits-of-land-value-taxation-persist-even-in-cases-where-land-values-are-estim","title":"Benefits of land value taxation persist even in cases where land values are estimated with error.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121744896","lede":"\"Land value taxation has numerous potential advantages compared to conventional property taxes on capital and land. The models that establish these advantages, however, are grounded in the unlikely assumption that land values are assessed without error. This paper demonstrates that levying taxes based on land values assessed with error is equivalent to the application of one tax rate to the true value of land and a different effective tax rate to capital. The model demonstrates that a land value tax will have at most the distortion effects of a property tax, even with the worst possible land value assessment errors.\"","link":"https://www.jstor.org/stable/27759702","slug":"implications-of-a-land-value-tax-with-error-in-assessed-values","kind":"Academic Paper","title":"Implications of a Land Value Tax with Error in Assessed Values","year":"2009-01-01","researchers":[{"id":"121744891","location":"","name":"Jeffrey I. Chapman","seoDescription":"","slug":"jeffrey-i-chapman"},{"id":"121744892","location":"","name":"Robert J. Johnston","seoDescription":"","slug":"robert-j-johnston"},{"id":"121744895","location":"","name":"Timothy J. Tyrrell","seoDescription":"","slug":"timothy-j-tyrrell"}]}]},{"id":"121744885","lede":"-","slug":"land-or-split-rate-taxes-exist-in-denmark-australia-parts-of-indonesia-18-pennsyl","title":"Land or split-rate taxes exist in Denmark, Australia, parts of Indonesia, & 18 Pennsylvanian cities.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"precedents","name":"Precedents","id":"121744884","lede":"

\n","ledeExcerpt":"Precedents offer real, historical examples of policies in action. Whether Denmark's experience with land value taxation, Germany's experience with codetermination, or California, Seattle, and Denver's experiences with basic income, precedents can help ground economic theory in realy world experience.","featured":null}],"sources":[{"id":"121744867","lede":"\"Urban sprawl has become a policy concern of national prominence. Land or split-rate taxes are one potential way to address this issue. In theory, such taxes can lower the land/capital ratio. This in turn can raise the density of housing units where it is applied, if the average quality/size of each housing unit does not increase by enough to offset an effect on the number of housing units. This research explores these issues, looking at a panel of land uses and demographics in Pennsylvania. We confirm the theoretical prediction that the capital/land ratio increases. We also find that the primary effect is in more housing units, rather than bigger or nicer units, suggesting the split rate tax is potentially a powerful anti-sprawl tool.\"","link":"https://www.lincolninst.edu/sites/default/files/pubfiles/banzhaf-wp08sb1.pdf","slug":"how-smart-is-the-split-rate-property-tax-evidence-from-growth-patterns-in-pennsyl","kind":"Report","title":"How \"Smart\" is the Split-Rate Property Tax? Evidence from Growth Patterns in Pennsylvania","year":"2008-01-01","researchers":[{"id":"121744865","location":"Dept. of Economics, Andrew Young School of Public Policy, Georgia State University, Associate Professor","name":"H. Spencer Banzhaf","seoDescription":"","slug":"h-spencer-banzhaf"},{"id":"121744866","location":" Fiscal analyst at the Vermont Legislative Joint Fiscal Office","name":"Nathan Lavery","seoDescription":"","slug":"nathan-lavery"}]}]},{"id":"121744882","lede":"\"The starting point for understanding the split-rate tax's effect on sprawl is that it should alleviate the property tax's distortionary effect on the land/capital ratio, increasing the capital stock on each unit of land. This has been called the \"improvement effect.\"","slug":"split-rate-land-taxation-alleviates-the-property-tax-s-distortionary-effect-on-th","title":"Split-rate/land taxation alleviates the property tax's distortionary effect on the land/capital ratio, increasing capital stock.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745","lede":"

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Generally, "capital" is any durable, produced good that is being 'put to work' as an input in further production; capital is any productive asset engaged in the process of producing further value.

\n\n

Examples include a factory and its machinery, financial assets that accrue value, or intellectual property such as patents.

\n","ledeExcerpt":"Generally, \"capital\" is any durable, produced good that is being 'put to work' as an input in further production; capital is any productive asset engaged in the process of producing further value.\n\nExamples include a factory and its machinery, financial assets that accrue value, or intellectual property such as patents.","featured":null}],"sources":[{"id":"121744867","lede":"\"Urban sprawl has become a policy concern of national prominence. Land or split-rate taxes are one potential way to address this issue. In theory, such taxes can lower the land/capital ratio. This in turn can raise the density of housing units where it is applied, if the average quality/size of each housing unit does not increase by enough to offset an effect on the number of housing units. This research explores these issues, looking at a panel of land uses and demographics in Pennsylvania. We confirm the theoretical prediction that the capital/land ratio increases. We also find that the primary effect is in more housing units, rather than bigger or nicer units, suggesting the split rate tax is potentially a powerful anti-sprawl tool.\"","link":"https://www.lincolninst.edu/sites/default/files/pubfiles/banzhaf-wp08sb1.pdf","slug":"how-smart-is-the-split-rate-property-tax-evidence-from-growth-patterns-in-pennsyl","kind":"Report","title":"How \"Smart\" is the Split-Rate Property Tax? Evidence from Growth Patterns in Pennsylvania","year":"2008-01-01","researchers":[{"id":"121744865","location":"Dept. of Economics, Andrew Young School of Public Policy, Georgia State University, Associate Professor","name":"H. Spencer Banzhaf","seoDescription":"","slug":"h-spencer-banzhaf"},{"id":"121744866","location":" Fiscal analyst at the Vermont Legislative Joint Fiscal Office","name":"Nathan Lavery","seoDescription":"","slug":"nathan-lavery"}]}]},{"id":"121744879","lede":"\"Oates and Schwab (1997) and Plassmann and Tideman (2000) show that the split-rate tax increases development activity as measured by building permits. This finding suggests the split- rate tax does have the expected effect on the land/capital ratio. Whether the aggregate increase in capital is the result of the improvement effect or of the dwelling size effect is unclear.\"","slug":"split-rate-tax-increases-development-activity-as-measured-by-building-permits","title":"Split-rate tax increases development activity as measured by building permits.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

\n","ledeExcerpt":"The (un)affordability of housing is of central concern to modern economics. Some recent research even argues that the majority of rising inequality over the past few decades is driven entirely by rising housing prices.\n\nThere are generally two main approaches towards reducing housing prices. The first is to increase housing supply, such as by repealing restrictive zoning laws, increasing competition and lowering prices. The second is to provide public housing, where the government owns and operates residential units, usually offering below-market-rate housing.","featured":true}],"sources":[{"id":"121744550","lede":"\"This study examines how replacing a uniform property tax with a land value tax (LVT) would shift the tax burden for single-family residential properties in Tarrant County, Texas, over the period 1997–2006. Results suggest that a LVT would shift the tax burden away from single-family properties and on to other property classes. For the more recent years in the sample, the average tax liability for single-family properties would decrease about 30 percent, regardless of household income, and SuitsIndices suggest that, within residential properties, a LVT would be slightly more progressive than a property tax. Horizontal equity problems would be greatest for the lowest-valued properties relative to other properties. This study also examines how a LVT would change property values due to the effects of tax capitalization.\"","link":"https://www.researchgate.net/profile/Elizabeth-Plummer/publication/228366356_Evidence_on_the_Distributional_Effects_of_a_Land_Value_Tax_on_Residential_Households/links/00b4952a09003cc24d000000/Evidence-on-the-Distributional-Effects-of-a-Land-Value-Tax-on-Residential-Households.pdf","slug":"evidence-on-the-distributional-effects-of-a-land-value-tax-on-residential-househo","kind":"Academic Paper","title":"Evidence on the Distributional Effects of a Land Value Tax on Residential Households","year":"2010-01-01","researchers":[{"id":"121744549","location":"Department of Accounting, Neeley School of Business, Texas Christian University","name":"Elizabeth Plummer","seoDescription":"","slug":"elizabeth-plummer"}]}]},{"id":"121744807","lede":"-","slug":"lvt-is-theorized-to-be-more-efficient-than-the-property-tax-because-the-supply-of","title":"LVT is theorized to be more efficient than the property tax because the supply of land is fixed, and thus will not be affected by taxation.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745","lede":"

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"We define stability as the resiliency, robustness, and constancy of our nested social, financial, and environmental systems. Stability is the degree to which our systems can withstand stress and maintain their functionality over time. \n\nWhy do we need stability? All else equal, a stable society is preferable to an unstable society. Stability - the product of the harmonious interaction between parts, or interwoven systems - protects against uncertainty and decay. For example, a healthy body regulates its blood glucose levels to provide cells with their required energy. Too much glucose makes cells sticky, with a paralyzing effect. Too little glucose starves them. What's important is the constancy of glucose regulation within functional limits, and the resiliency to maintain this regulation amidst adversity.\n\nInstability occurs when systems transgress functional limits, causing the breakdown of other systems and suffering for those who depend on them. When interlocking systems remain stable, they provide a fertile foundation for positive expectations that fuel investments in progress and broad cooperation throughout society.","featured":true},{"slug":"tax-burden","name":"Tax Burden","id":"99018007","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121744550","lede":"\"This study examines how replacing a uniform property tax with a land value tax (LVT) would shift the tax burden for single-family residential properties in Tarrant County, Texas, over the period 1997–2006. Results suggest that a LVT would shift the tax burden away from single-family properties and on to other property classes. For the more recent years in the sample, the average tax liability for single-family properties would decrease about 30 percent, regardless of household income, and SuitsIndices suggest that, within residential properties, a LVT would be slightly more progressive than a property tax. Horizontal equity problems would be greatest for the lowest-valued properties relative to other properties. This study also examines how a LVT would change property values due to the effects of tax capitalization.\"","link":"https://www.researchgate.net/profile/Elizabeth-Plummer/publication/228366356_Evidence_on_the_Distributional_Effects_of_a_Land_Value_Tax_on_Residential_Households/links/00b4952a09003cc24d000000/Evidence-on-the-Distributional-Effects-of-a-Land-Value-Tax-on-Residential-Households.pdf","slug":"evidence-on-the-distributional-effects-of-a-land-value-tax-on-residential-househo","kind":"Academic Paper","title":"Evidence on the Distributional Effects of a Land Value Tax on Residential Households","year":"2010-01-01","researchers":[{"id":"121744549","location":"Department of Accounting, Neeley School of Business, Texas Christian University","name":"Elizabeth Plummer","seoDescription":"","slug":"elizabeth-plummer"}]}]},{"id":"121744552","lede":"-","slug":"lvt-might-be-more-politically-feasible-in-jurisdictions-where-the-changes-for-hom","title":"LVT might be more politically feasible in jurisdictions where the changes for homeowners/voters would most likely be beneficial.","showTitleAsQuote":false,"epistemicStatus":"practical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"political-feasibility","name":"Political Feasibility","id":"121668951","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121744550","lede":"\"This study examines how replacing a uniform property tax with a land value tax (LVT) would shift the tax burden for single-family residential properties in Tarrant County, Texas, over the period 1997–2006. Results suggest that a LVT would shift the tax burden away from single-family properties and on to other property classes. For the more recent years in the sample, the average tax liability for single-family properties would decrease about 30 percent, regardless of household income, and SuitsIndices suggest that, within residential properties, a LVT would be slightly more progressive than a property tax. Horizontal equity problems would be greatest for the lowest-valued properties relative to other properties. This study also examines how a LVT would change property values due to the effects of tax capitalization.\"","link":"https://www.researchgate.net/profile/Elizabeth-Plummer/publication/228366356_Evidence_on_the_Distributional_Effects_of_a_Land_Value_Tax_on_Residential_Households/links/00b4952a09003cc24d000000/Evidence-on-the-Distributional-Effects-of-a-Land-Value-Tax-on-Residential-Households.pdf","slug":"evidence-on-the-distributional-effects-of-a-land-value-tax-on-residential-househo","kind":"Academic Paper","title":"Evidence on the Distributional Effects of a Land Value Tax on Residential Households","year":"2010-01-01","researchers":[{"id":"121744549","location":"Department of Accounting, Neeley School of Business, Texas Christian University","name":"Elizabeth Plummer","seoDescription":"","slug":"elizabeth-plummer"}]}]},{"id":"121744528","lede":"Poll by: https://smartgrowthamerica.org/about-us/our-history/","slug":"78-of-americans-support-the-control-of-urban-sprawl-in-land-use-planning","title":"78% of Americans support the control of urban sprawl in land use planning.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"public-opinion","name":"Public Opinion","id":"118561899","lede":"","ledeExcerpt":"","featured":true},{"slug":"urban-development","name":"Urban Development","id":"99017961","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121721052","lede":"\"The objective of this research is to evaluate a land value tax as a potential policy tool to moderate sprawling development in Nashville, TN, the nation’s most sprawling metropolitan community with a population of one million or more. To achieve this objective, the hypothesis is empirically tested that a land value tax encourages more development closer to preexisting development than farther from preexisting development. Specifically, the marginal effects of a land value tax on the probability of land development is hypothesized to be greater in areas around preexisting development than in areas more distant from preexisting development. The findings show that the marginal effects of a land value tax on the probability of developing parcels that neighbored previously developed parcels was greater than the probability of developing parcels that did not neighbor previously developed parcels. This finding suggests that land value taxation could be used to design compact development strategies that address sprawling development.\"","link":"https://ideas.repec.org/p/ags/saeana/46760.html","slug":"measuring-the-effects-of-a-land-value-tax-on-land-development","kind":"Academic Paper","title":"Measuring the Effects of a Land Value Tax on Land Development","year":"2009-01-01","researchers":[{"id":"121721046","location":"","name":"Seong-Hoon Cho","seoDescription":"","slug":"seong-hoon-cho"},{"id":"121721047","location":"","name":"Seung Gyu Kim","seoDescription":"","slug":"seung-gyu-kim"},{"id":"121721051","location":"","name":"Roland K. Roberts","seoDescription":"","slug":"roland-k-roberts"}]}]},{"id":"121744523","lede":"\"A shift from property to land taxation (or the movement to a “graded” tax system under which land is taxed at a higher rate than the structures on the land) will reduce the “penalty” on improvements and encourage more intensive land use. Brueckner (1986) has demonstrated this proposition in a rigorous static analysis: the replacement of taxes on structures by levies on land-value will result in a higher level of improvements to the land (i.e., a higher capital-land ratio). We will refer to this as the capital-intensity effect.\"","slug":"replacing-taxes-on-building-structures-with-taxes-on-land-value-results-in-more-i","title":"Replacing taxes on building structures with taxes on land-value results in more improvements to the land, measured as a higher capital-land ratio.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Zoning is a type of municipal regulation that governs how land may be used. As a method of urban planning, it's used to govern what kinds of development may occur on given land plots, including residential, commercial, agricultural, industrial, or hospitality.

\n\n

It's also used to designate whether plots of land are "single use" or "mixed use", dictating whether different types may coexist or not on particular land plots.

\n","ledeExcerpt":"Zoning is a type of municipal regulation that governs how land may be used. As a method of urban planning, it's used to govern what kinds of development may occur on given land plots, including residential, commercial, agricultural, industrial, or hospitality.\n\nIt's also used to designate whether plots of land are \"single use\" or \"mixed use\", dictating whether different types may coexist or not on particular land plots.","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121668946","lede":"","link":"https://astralcodexten.substack.com/p/does-georgism-work-part-3-can-unimproved?utm_source=url&s=r","slug":"does-georgism-work-part-3-can-unimproved-land-value-be-accurately-assessed-separa","kind":"Article","title":"Does Georgism Work, Part 3: Can Unimproved Land Value be Accurately Assessed Separately From Buildings?","year":"2021-01-01","researchers":[{"id":"121668940","location":"https://www.fortressofdoors.com/","name":"Lars Doucet","seoDescription":"","slug":"lars-doucet"}]}]},{"id":"121742623","lede":"Critics of LVT in Pittsburgh suggest their experience with LVT was unconvincing, largely because of the minimal impacts on development. They cite surveys that found respondents reporting LVT had little discernible impact on development decisions. However, the authors suggest that this 'neutrality', or absence of impact, is precisely LVT's strength, and in line with standard economic theory. The very appeal of LVT is that it can raise revenue without affecting decision-making. Thus LVT should not, and did not, in itself hasten development. Instead, the value of LVT is cited as a financing option that avoids the distortions carried by alternatives.","slug":"the-pittsburgh-experience-affirms-standard-economic-theory-predicting-that-a-majo","title":"The Pittsburgh experience affirms standard economic theory, predicting that a major increase in land value taxation should be neutral. That is, have little impact on development decisions.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"efficiency","name":"Efficiency","id":"72743745","lede":"

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n","ledeExcerpt":"Public policies that require significant revenue often meet an important question: \"how will you pay for that?\" Pay-fors are potential sources of funding.\n\nWhile it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.","featured":null}],"sources":[{"id":"121725289","lede":"\"In 1979–80, the city of Pittsburgh restructured its property tax system by raising the rate on land to more than five times the rate on structures. This paper explores the impact of this tax reform on the economic development of the city. Following some background on the theory of land taxation and Pittsburgh’s historical setting, the paper presents an empirical analysis of the impact of the tax reform. Pittsburgh experienced in the 1980s a dramatic increase in building activity, far in excess of other cities in the region. The analysis suggests that, while a shortage of commercial space was a primary driving force behind the expansion, the reliance on increased land taxation played an important supporting role by enabling the city to avoid rate increases in other taxes that could have impeded development.\"","link":"https://www.journals.uchicago.edu/doi/abs/10.1086/NTJ41789240?journalCode=ntj","slug":"the-impact-of-urban-land-taxation-the-pittsburgh-experience","kind":"Academic Paper","title":"The Impact of Urban Land Taxation: The Pittsburgh Experience","year":"1997-01-01","researchers":[{"id":"121725286","location":"","name":"Wallace E. Oates","seoDescription":"","slug":"wallace-e-oates"},{"id":"121725287","location":"","name":"Robert M. Schwab","seoDescription":"","slug":"robert-m-schwab"}]}]},{"id":"121742552","lede":"This is because unlike other subjects of taxation, the supply of land is fixed, so raising tax rates cannot affect supply.","slug":"land-value-taxation-is-unique-in-that-it-can-raise-tax-revenue-without-raising-th","title":"Land value taxation is unique in that it can raise tax revenue without raising the adverse fiscal incentives that other tax measures impose.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n","ledeExcerpt":"Public policies that require significant revenue often meet an important question: \"how will you pay for that?\" Pay-fors are potential sources of funding.\n\nWhile it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.","featured":null}],"sources":[{"id":"121725289","lede":"\"In 1979–80, the city of Pittsburgh restructured its property tax system by raising the rate on land to more than five times the rate on structures. This paper explores the impact of this tax reform on the economic development of the city. Following some background on the theory of land taxation and Pittsburgh’s historical setting, the paper presents an empirical analysis of the impact of the tax reform. Pittsburgh experienced in the 1980s a dramatic increase in building activity, far in excess of other cities in the region. The analysis suggests that, while a shortage of commercial space was a primary driving force behind the expansion, the reliance on increased land taxation played an important supporting role by enabling the city to avoid rate increases in other taxes that could have impeded development.\"","link":"https://www.journals.uchicago.edu/doi/abs/10.1086/NTJ41789240?journalCode=ntj","slug":"the-impact-of-urban-land-taxation-the-pittsburgh-experience","kind":"Academic Paper","title":"The Impact of Urban Land Taxation: The Pittsburgh Experience","year":"1997-01-01","researchers":[{"id":"121725286","location":"","name":"Wallace E. Oates","seoDescription":"","slug":"wallace-e-oates"},{"id":"121725287","location":"","name":"Robert M. Schwab","seoDescription":"","slug":"robert-m-schwab"}]}]},{"id":"121742486","lede":"Additionally, residential construction is projected to increase 1.16%, total exports by 0.19%, disposable income by 0.6%, and total population by 0.76%.","slug":"a-revenue-neutral-shift-to-a-pure-land-value-tax-in-the-state-of-new-hampshire-is","title":"A revenue-neutral shift to a pure land value tax in the state of New Hampshire is projected to raise total employment by 0.35% and raise gross state product by 0.36%","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"employment","name":"Employment","id":"23932807","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

\n","ledeExcerpt":"In general, efficiency refers to maximizing outputs while minimizing inputs. \n\nIn economic contexts, there are two main types of efficiency: microeconomic efficiency (where system efficiency is understood as maximizing a particular output given available inputs), and the efficient-market hypothesis (a state where asset prices reflect all available information).","featured":true}],"sources":[{"id":"121670317","lede":"\"A land value tax is a recurrent tax on landowners based on the value of unimproved land. There is a widely held view that a land value tax is an economically efficient means of taxing wealth and of encouraging land development. The arguments presented in the policy and academic literature tend to concentrate on the compelling theoretical case, but most do not consider the detail of how such a tax might be implemented. Indeed, land value taxation is not widely implemented as a standalone real estate tax despite the strong theoretical rationale for its use. We explore why this might be by identifying key practical, political and economic factors surrounding the implementation and operation of land value taxation in six countries. We examine the various rationales for the introduction of land value tax, reasons for its continued use or abolition (where applicable) as well the particular practical and political issues which policymakers need to consider prior to introducing land value taxation. These include the need for a comprehensive up-to-date land registry and forward planning of land use at plot level; the provision of a well-resourced and informed valuation profession; resources to undertake robust valuations which separate the value of land from the value of improvements for developed plots and do so on the basis of highest and best use; and the need for widespread political support for the introduction of a new tax (which may be difficult to secure). These issues present significant uncertainty in comparison with already-existing forms of land and property taxation. We conclude that these issues may therefore provide some explanation as to the lack of widespread adoption of land value tax despite the economic theoretical arguments in its favour.\"","link":"https://www.sciencedirect.com/science/article/abs/pii/S0264837719315704","slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice","kind":"Academic Paper","title":"Implementing a Land Value Tax: Considerations on Moving from Theory to Practice","year":"2020-01-01","researchers":[{"id":"121670312","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Cathy Hughes","seoDescription":"","slug":"cathy-hughes"},{"id":"121670314","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Sarah Sayce","seoDescription":"","slug":"sarah-sayce"},{"id":"121670315","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Edward Shepherd","seoDescription":"","slug":"edward-shepherd"},{"id":"121670316","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Pete Wyatt","seoDescription":"","slug":"pete-wyatt"}]}]},{"id":"121742411","lede":"Economic theory suggests a LVT would encourage the development of vacant or under-developed land by raising the tax burden of holding such land.","slug":"across-south-africa-estonia-australia-denmark-new-zealand-and-namibia-there-is-no","title":"Across South Africa, Estonia, Australia, Denmark, New Zealand, and Namibia, \"there is no firm evidence that LVT was a consistently effective tool for bringing land forward for development.\" Instead of taxation, more direct measures such as land use planning, development control, and infrastructure investment may be more effective.","showTitleAsQuote":false,"epistemicStatus":"practical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"The (un)affordability of housing is of central concern to modern economics. Some recent research even argues that the majority of rising inequality over the past few decades is driven entirely by rising housing prices.\n\nThere are generally two main approaches towards reducing housing prices. The first is to increase housing supply, such as by repealing restrictive zoning laws, increasing competition and lowering prices. The second is to provide public housing, where the government owns and operates residential units, usually offering below-market-rate housing.","featured":true}],"sources":[{"id":"121742364","lede":"The paper examines the effect of taxing structures at a lower rate than land on the level of construction in 15 Pennsylvania municipalities between 1972 and 1994. These municipalities are compared with 204 similar Pennsylvania municipalities that tax land and structures at the same rate. To reduce the standard errors of estimate below those of a quasi-maximum likelihood estimation, the model parameters are estimated with a Markov chain Monte Carlo method, the Gibbs sampler. In contrast to earlier tax analyses, the estimates indicate that cities with two-rate taxes enjoy significantly higher levels of construction than they would with one-rate taxes.\n\n","link":"https://www.sciencedirect.com/science/article/pii/S009411909992140X","slug":"a-markov-chain-monte-carlo-analysis-of-the-effect-of-two-rate-property-taxes-on-c","kind":"Academic Paper","title":"A Markov Chain Monte Carlo Analysis of the Effect of Two-Rate Property Taxes on Construction","year":"2000-01-01","researchers":[{"id":"121742337","location":"Department of Economics, State University of New York at Binghamton","name":"Florenz Plassmann","seoDescription":"","slug":"florenz-plassmann"},{"id":"121669923","location":"Virginia Polytechnic Institute & State University - Department of Economics","name":"T. Nicolaus Tideman","seoDescription":"","slug":"t-nicolaus-tideman"}]}]},{"id":"121740941","lede":"-","slug":"rising-housing-prices-entirely-accounts-for-the-rise-in-net-capital-share-of-inco","title":"Rising housing prices entirely accounts for the rise in net capital share of income since the 1970's. Despite recent studies citing the role of increased capital accumulation in exacerbating inequality, this rise may entirely be due to rising housing prices. ","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"inequality","name":"Inequality","id":"69359341","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

\n","ledeExcerpt":"The (un)affordability of housing is of central concern to modern economics. Some recent research even argues that the majority of rising inequality over the past few decades is driven entirely by rising housing prices.\n\nThere are generally two main approaches towards reducing housing prices. The first is to increase housing supply, such as by repealing restrictive zoning laws, increasing competition and lowering prices. The second is to provide public housing, where the government owns and operates residential units, usually offering below-market-rate housing.","featured":true}],"sources":[{"id":"121740930","lede":"\"In the postwar era, developed economies have experienced two substantial trends in the net capital share of aggregate income: a rise during the last several decades, which is well known, and a fall of comparable magnitude that continued until the 1970s, which is less well known. Overall, the net capital share has increased since 1948, but once disaggregated this increase turns out to come entirely from the housing sector: the contribution to net capital income from all other sectors has been zero or slightly negative, as the fall and rise have offset each other. Several influential accounts of the recent rise emphasize the role of increased capital accumulation, but this view is at odds with theory and evidence: it requires empirically improbable elasticities of substitution, and it presumes a correlation between the capital-income ratio and capital share that is not visible in the data. A more limited narrative that stresses scarcity and the increased cost of housing better fits the data. These results are clarified using a new, multisector model of factor shares.\"","link":"https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf","slug":"deciphering-the-fall-and-rise-in-the-net-capital-share-accumulation-or-scarcity","kind":"Academic Paper","title":"Deciphering the Fall and Rise in the Net Capital Share: Accumulation or Scarcity?","year":"2015-01-01","researchers":[{"id":"121740925","location":"MIT","name":"Matthew Rognlie","seoDescription":"","slug":"matthew-rognlie"}]}]},{"id":"121740898","lede":"“Our theoretical view of local tax options suggests that LVT is a reasonably effective means of financing public transportation capital improvements by levying taxes on the portion of property value created by transit stations. This approach is mostly consistent with the fiscal equivalence condition, as value capture attempts to assign costs directly to beneficiaries. Since this type of financial instrument does not, however, directly influence the use of the infrastructure, land value capture imperfectly fulfills the efficiency criterion in supplementing current financing regimes. Value capture helps indirectly internalize certain externalities (e.g., positive externalities accruing to property owners as property value increments, perhaps reducing automobile congestion), but has limited value for others, such as congestion in the transit system. In theory, LVT can improve horizontal equity, at least in terms of assigning costs. As our implementation scenarios show, however, the type of administrative methods adopted carry trade-offs between administrative ease, efficiency, and vertical equity”","slug":"land-value-taxation-offers-a-viable-approach-to-financing-public-transit-systems","title":"Land value taxation offers a viable approach to financing public transit systems, and places the tax burden on those areas that benefit most from such public services.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"public-goods","name":"Public Goods","id":"113764615","lede":"

\n","ledeExcerpt":"Public goods are commodities or services made available to all members of a society that are non-rivalrous, meaning one's use of the good or service does not diminish from another's. Examples may include national defense, infrastructure, education, or environmental protection.","featured":null},{"slug":"tax-burden","name":"Tax Burden","id":"99018007","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121740882","lede":"","link":"http://web.mit.edu/czegras/www/Zegras%20et%20al_LVT%20and%20CTA.pdf","slug":"sustaining-mass-transit-through-land-value-taxation-prospects-for-chicago","kind":"Report","title":"Sustaining Mass Transit through Land Value Taxation? Prospects for Chicago","year":"2013-01-01","researchers":[{"id":"121740853","location":"MIT, Associate Professor","name":"Christopher Zegras","seoDescription":"","slug":"christopher-zegras"},{"id":"121740857","location":"MIT, PhD Candidate","name":"Shan Jiang","seoDescription":"","slug":"shan-jiang"}]}]},{"id":"121740819","lede":"The land tax alone applies to a base of £5.5 trillion in non-governmental land value, raising £55 billion per year. Alone, this tax would raise the Gini index by 0.08%, but distributing the revenue as a UBI makes the tax highly progressive. The bottom decile’s income would rise by 16%, while the top’s would decline by 2%.","slug":"a-1-land-value-tax-in-the-uk-could-fund-a-ubi-of-ps16-per-week-reducing-poverty-b","title":"A 1% land value tax in the UK could fund a UBI of £16 per week, reducing poverty by 20% and benefitting 70% of the population.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"ubi","name":"Universal Basic Income (UBI)","id":"19519447","lede":"

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null},{"slug":"inequality","name":"Inequality","id":"69359341","lede":"","ledeExcerpt":"","featured":null},{"slug":"tax-burden","name":"Tax Burden","id":"99018007","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

Value extraction occurs when an entity (individual, or organization) appropriates economic gains vastly out of proportion with their contribution to said gains.

\n\n

Value extraction can be contrasted with value creation, where new goods or services are created.

\n\n

One example of value extraction is an individual or real estate company who buys vacant land near a developing city, and holds the land while the city continues to develop, waiting until the property value has risen and the land can be sold at a profit – despite making no contribution themselves.

\n","ledeExcerpt":"Value extraction occurs when an entity (individual, or organization) appropriates economic gains vastly out of proportion with their contribution to said gains.\n\nValue extraction can be contrasted with value creation, where new goods or services are created.\n\nOne example of value extraction is an individual or real estate company who buys vacant land near a developing city, and holds the land while the city continues to develop, waiting until the property value has risen and the land can be sold at a profit – despite making no contribution themselves.","featured":null}],"sources":[{"id":"121740730","lede":"\"Generally, subsidies increase the supply of goods beyond optimal amounts, and generate deadweight losses. The urban fringes receive implicit land-rent subsidies from the governmental provision of public works and civic services paid for mostly by taxing properties, goods, and income, rather than only the land values generated by these public goods. The provision of utilities such as water is also skewed towards subsidizing the fringes. The taxation of most of the land rent or land value, combined with the elimination of other taxes, especially on improvements, would prevent such subsidies and allow development markets to generate an optimal urban development. Urban sprawl, defined as the use of land relative to optimal use, would gradually become eliminated with the elimination of both horizontal land subsidies and the taxation of vertical development. Land value taxation would also prevent distortive land speculation and, combined with a reduction of taxes on wages or goods paid from wages, would remove a major source of economic inequality while improving productivity.\"","link":"https://www.sciencedirect.com/science/article/pii/S0264837717304076#!","slug":"the-taxation-of-land-value-as-the-means-towards-optimal-urban-development-and-the","kind":"Academic Paper","title":"The taxation of land value as the means towards optimal urban development and the extirpation of excessive economic inequality.","year":"2017-01-01","researchers":[{"id":"121740723","location":"San Jose State University","name":"Fred Emanuel Foldvary","seoDescription":"","slug":"fred-emanuel-foldvary"},{"id":"121740728","location":"Polytechnic University of Milan, Italy","name":"Luca Andrea Minola","seoDescription":"","slug":"luca-andrea-minola"}]}]},{"id":"121740748","lede":"“The economic inequality as presented in works such as Capital in the Twenty-First Century by Thomas Piketty (2014) has been a global problem, but often incompletely analysed. Critics of Piketty such as Matthew Rognlie (2015) have pointed out that the decline in the portion of income going to wages relative to non-wage income is explained by the rise in land value, not by the rise in (physical) capital value, as suggested by Piketty (2014). Thus, the taxation of land value, for public benefit, replacing other taxes, would reduce inequality while promoting greater efficiency.”","slug":"if-the-rise-in-inequality-between-labor-and-capital-is-due-to-the-rise-in-land-va","title":"If the rise in inequality between labor and capital is due to the rise in land value - as opposed to capital increasing its share of national income - then land value taxation for public benefit would reduce inequality while promoting efficiency.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"inequality","name":"Inequality","id":"69359341","lede":"","ledeExcerpt":"","featured":null},{"slug":"housing","name":"Housing","id":"121669963","lede":"

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

\n","ledeExcerpt":"We define stability as the resiliency, robustness, and constancy of our nested social, financial, and environmental systems. Stability is the degree to which our systems can withstand stress and maintain their functionality over time. \n\nWhy do we need stability? All else equal, a stable society is preferable to an unstable society. Stability - the product of the harmonious interaction between parts, or interwoven systems - protects against uncertainty and decay. For example, a healthy body regulates its blood glucose levels to provide cells with their required energy. Too much glucose makes cells sticky, with a paralyzing effect. Too little glucose starves them. What's important is the constancy of glucose regulation within functional limits, and the resiliency to maintain this regulation amidst adversity.\n\nInstability occurs when systems transgress functional limits, causing the breakdown of other systems and suffering for those who depend on them. When interlocking systems remain stable, they provide a fertile foundation for positive expectations that fuel investments in progress and broad cooperation throughout society.","featured":true}],"sources":[{"id":"121740730","lede":"\"Generally, subsidies increase the supply of goods beyond optimal amounts, and generate deadweight losses. The urban fringes receive implicit land-rent subsidies from the governmental provision of public works and civic services paid for mostly by taxing properties, goods, and income, rather than only the land values generated by these public goods. The provision of utilities such as water is also skewed towards subsidizing the fringes. The taxation of most of the land rent or land value, combined with the elimination of other taxes, especially on improvements, would prevent such subsidies and allow development markets to generate an optimal urban development. Urban sprawl, defined as the use of land relative to optimal use, would gradually become eliminated with the elimination of both horizontal land subsidies and the taxation of vertical development. Land value taxation would also prevent distortive land speculation and, combined with a reduction of taxes on wages or goods paid from wages, would remove a major source of economic inequality while improving productivity.\"","link":"https://www.sciencedirect.com/science/article/pii/S0264837717304076#!","slug":"the-taxation-of-land-value-as-the-means-towards-optimal-urban-development-and-the","kind":"Academic Paper","title":"The taxation of land value as the means towards optimal urban development and the extirpation of excessive economic inequality.","year":"2017-01-01","researchers":[{"id":"121740723","location":"San Jose State University","name":"Fred Emanuel Foldvary","seoDescription":"","slug":"fred-emanuel-foldvary"},{"id":"121740728","location":"Polytechnic University of Milan, Italy","name":"Luca Andrea Minola","seoDescription":"","slug":"luca-andrea-minola"}]}]},{"id":"121725307","lede":"-","slug":"county-and-city-assessors-are-skeptical-of-transitioning-to-a-land-value-tax-only","title":"County and city assessors are skeptical of transitioning to a land value tax. Only 9% of Minnesota county and city assessors surveyed believed land value tax was an idea worth pursuing, while 40% strongly disagreed with pursuing one.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"public-opinion","name":"Public Opinion","id":"118561899","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121725305","lede":"\"The author estimates the effect that a land value tax on commercial and industrial property would have in Minnesota. There would be winners and losers, but concurrent declassification would make the change more politically palatable, he says. However, the declassification increases the likelihood of small tax increases for small commercial parcels, the author says.\"","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=633542","slug":"evaluating-the-feasibility-and-burden-shifting-effects-of-a-statewide-land-value","kind":"Academic Paper","title":"Evaluating the Feasibility and Burden-Shifting Effects of a Statewide Land Value Tax on Commercial and Industrial Property","year":null,"researchers":[{"id":"121725304","location":"Minnesota Taxpayers Association (MTA)","name":"Mark Haveman","seoDescription":"","slug":"mark-haveman"}]}]},{"id":"121725306","lede":"-","slug":"despite-lvt-s-high-theoretical-appeal-administrative-and-political-realities-have","title":"Despite LVT's high theoretical appeal, administrative and political realities have generally outweighed and discouraged setting one up in practice.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"political-barriers","name":"Political Barriers","id":"99764018","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121725305","lede":"\"The author estimates the effect that a land value tax on commercial and industrial property would have in Minnesota. There would be winners and losers, but concurrent declassification would make the change more politically palatable, he says. However, the declassification increases the likelihood of small tax increases for small commercial parcels, the author says.\"","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=633542","slug":"evaluating-the-feasibility-and-burden-shifting-effects-of-a-statewide-land-value","kind":"Academic Paper","title":"Evaluating the Feasibility and Burden-Shifting Effects of a Statewide Land Value Tax on Commercial and Industrial Property","year":null,"researchers":[{"id":"121725304","location":"Minnesota Taxpayers Association (MTA)","name":"Mark Haveman","seoDescription":"","slug":"mark-haveman"}]}]},{"id":"121725301","lede":"But the conclusion is divisive among those close to the Pittsburgh experience. As the authors report: \"In contrast, a major official and a close observer (independently) have asserted categorically to us that all the major projects that were undertaken in the CBD would have been undertaken in the absence of any increase in land taxes; their view is that the shortage of office space was the basic driving force in these investment decisions.\"","slug":"the-pittsburgh-city-council-president-stated-i-m-not-going-to-say-the-land-tax-is","title":"The Pittsburgh City Council President stated: \"I'm not going to say the land tax is the only reason a second renaissance occurred, but it's been a big help\".","showTitleAsQuote":false,"epistemicStatus":"anecdotal","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n","ledeExcerpt":"The details of a policy can fundamentally transform its effects. For example, a basic income that replaces all other welfare appeals greatly to conservatives and libertarians, while one that supplements the existing welfare state appeals to progressives.\n\nTo evaluate any policy in full, we must know the details of its implementation.","featured":true}],"sources":[{"id":"121670317","lede":"\"A land value tax is a recurrent tax on landowners based on the value of unimproved land. There is a widely held view that a land value tax is an economically efficient means of taxing wealth and of encouraging land development. The arguments presented in the policy and academic literature tend to concentrate on the compelling theoretical case, but most do not consider the detail of how such a tax might be implemented. Indeed, land value taxation is not widely implemented as a standalone real estate tax despite the strong theoretical rationale for its use. We explore why this might be by identifying key practical, political and economic factors surrounding the implementation and operation of land value taxation in six countries. We examine the various rationales for the introduction of land value tax, reasons for its continued use or abolition (where applicable) as well the particular practical and political issues which policymakers need to consider prior to introducing land value taxation. These include the need for a comprehensive up-to-date land registry and forward planning of land use at plot level; the provision of a well-resourced and informed valuation profession; resources to undertake robust valuations which separate the value of land from the value of improvements for developed plots and do so on the basis of highest and best use; and the need for widespread political support for the introduction of a new tax (which may be difficult to secure). These issues present significant uncertainty in comparison with already-existing forms of land and property taxation. We conclude that these issues may therefore provide some explanation as to the lack of widespread adoption of land value tax despite the economic theoretical arguments in its favour.\"","link":"https://www.sciencedirect.com/science/article/abs/pii/S0264837719315704","slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice","kind":"Academic Paper","title":"Implementing a Land Value Tax: Considerations on Moving from Theory to Practice","year":"2020-01-01","researchers":[{"id":"121670312","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Cathy Hughes","seoDescription":"","slug":"cathy-hughes"},{"id":"121670314","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Sarah Sayce","seoDescription":"","slug":"sarah-sayce"},{"id":"121670315","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Edward Shepherd","seoDescription":"","slug":"edward-shepherd"},{"id":"121670316","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Pete Wyatt","seoDescription":"","slug":"pete-wyatt"}]}]},{"id":"121725261","lede":"\"In Queensland Australia, valuations are ideally based on comparable land sales of ‘vacant or lightly improved land’, but where these are not available, improved land sales may be used as comparable evidence, adjusted so as to exclude the value of the improvements. An increasing lack of vacant land sales has prompted greater reliance on improved land sales (Mangioni, 2016), and this has led to a lack of transparency and inconsistency of approaches in the valuation of land and has raised concerns regarding the economic efficiency, simplicity and transparency of the land tax. Consequently LVT in Australia has “constantly been challenged and is one of the more disliked, visual and least understood taxes imposed by governments” (Mangioni, 2016, pp.73–74).\"","slug":"lack-of-transparency-and-inconsistency-in-land-valuation-methods-has-led-lvt-in-a","title":"Lack of transparency and inconsistency in land valuation methods has led LVT in Australia to become one of their more disliked and least understood taxes.","showTitleAsQuote":false,"epistemicStatus":"anecdotal","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"land-valuation","name":"Land Valuation","id":"121670405","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121670317","lede":"\"A land value tax is a recurrent tax on landowners based on the value of unimproved land. There is a widely held view that a land value tax is an economically efficient means of taxing wealth and of encouraging land development. The arguments presented in the policy and academic literature tend to concentrate on the compelling theoretical case, but most do not consider the detail of how such a tax might be implemented. Indeed, land value taxation is not widely implemented as a standalone real estate tax despite the strong theoretical rationale for its use. We explore why this might be by identifying key practical, political and economic factors surrounding the implementation and operation of land value taxation in six countries. We examine the various rationales for the introduction of land value tax, reasons for its continued use or abolition (where applicable) as well the particular practical and political issues which policymakers need to consider prior to introducing land value taxation. These include the need for a comprehensive up-to-date land registry and forward planning of land use at plot level; the provision of a well-resourced and informed valuation profession; resources to undertake robust valuations which separate the value of land from the value of improvements for developed plots and do so on the basis of highest and best use; and the need for widespread political support for the introduction of a new tax (which may be difficult to secure). These issues present significant uncertainty in comparison with already-existing forms of land and property taxation. We conclude that these issues may therefore provide some explanation as to the lack of widespread adoption of land value tax despite the economic theoretical arguments in its favour.\"","link":"https://www.sciencedirect.com/science/article/abs/pii/S0264837719315704","slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice","kind":"Academic Paper","title":"Implementing a Land Value Tax: Considerations on Moving from Theory to Practice","year":"2020-01-01","researchers":[{"id":"121670312","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Cathy Hughes","seoDescription":"","slug":"cathy-hughes"},{"id":"121670314","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Sarah Sayce","seoDescription":"","slug":"sarah-sayce"},{"id":"121670315","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Edward Shepherd","seoDescription":"","slug":"edward-shepherd"},{"id":"121670316","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Pete Wyatt","seoDescription":"","slug":"pete-wyatt"}]}]},{"id":"121725260","lede":"“There needs to be a good understanding regarding what LVT is and what it is supposed to achieve and sufficient resource put behind the valuation exercise. Use of automated valuation models can reduce appeals against assessments, but currently these are only really practicable for domestic properties where reference to comparable capital transaction prices underpin values. However the Danish system which incorporates GIS (geographic information system) modelling with hedonic pricing techniques is considered by Milan et al. (2016) to offer the greatest potential moving forward. For the successful introduction of a land value tax, the issue of arriving at a credible land value method is a pre-requisite.\"","slug":"the-technical-difficulty-of-how-to-value-unimproved-land-while-not-insurmountable","title":"The technical difficulty of how to value unimproved land, while not insurmountable, is considerable and prone to generating confusion and a lack of transparency. There needs to be a good understanding regarding what LVT is and what it is supposed to achieve and sufficient resource put behind the valuation exercise.","showTitleAsQuote":true,"epistemicStatus":"practical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"land-valuation","name":"Land Valuation","id":"121670405","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121670317","lede":"\"A land value tax is a recurrent tax on landowners based on the value of unimproved land. There is a widely held view that a land value tax is an economically efficient means of taxing wealth and of encouraging land development. The arguments presented in the policy and academic literature tend to concentrate on the compelling theoretical case, but most do not consider the detail of how such a tax might be implemented. Indeed, land value taxation is not widely implemented as a standalone real estate tax despite the strong theoretical rationale for its use. We explore why this might be by identifying key practical, political and economic factors surrounding the implementation and operation of land value taxation in six countries. We examine the various rationales for the introduction of land value tax, reasons for its continued use or abolition (where applicable) as well the particular practical and political issues which policymakers need to consider prior to introducing land value taxation. These include the need for a comprehensive up-to-date land registry and forward planning of land use at plot level; the provision of a well-resourced and informed valuation profession; resources to undertake robust valuations which separate the value of land from the value of improvements for developed plots and do so on the basis of highest and best use; and the need for widespread political support for the introduction of a new tax (which may be difficult to secure). These issues present significant uncertainty in comparison with already-existing forms of land and property taxation. We conclude that these issues may therefore provide some explanation as to the lack of widespread adoption of land value tax despite the economic theoretical arguments in its favour.\"","link":"https://www.sciencedirect.com/science/article/abs/pii/S0264837719315704","slug":"implementing-a-land-value-tax-considerations-on-moving-from-theory-to-practice","kind":"Academic Paper","title":"Implementing a Land Value Tax: Considerations on Moving from Theory to Practice","year":"2020-01-01","researchers":[{"id":"121670312","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Cathy Hughes","seoDescription":"","slug":"cathy-hughes"},{"id":"121670314","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Sarah Sayce","seoDescription":"","slug":"sarah-sayce"},{"id":"121670315","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Edward Shepherd","seoDescription":"","slug":"edward-shepherd"},{"id":"121670316","location":"Department of Real Estate and Planning University of Reading, United Kingdom","name":"Pete Wyatt","seoDescription":"","slug":"pete-wyatt"}]}]},{"id":"121725258","lede":"\"The challenges associated with valuing land in its unimproved state are made potentially more complex if the valuation is to assume that the taxable asset (or land parcel) is assigned to its HABU rather than its existing use in cases where the two are different. Determining the value of land in its existing use would be a pragmatic solution, but this would not create any incentive to develop or sell land which is currently not developed to its potential. However, if land is to be valued based on its HABU then this brings with it technical issues associated with determining what actually is the HABU of the land parcel. Although these issues are not insurmountable, they can be difficult to address in a way that provides sufficient transparency or accountability. They are therefore open to challenge and appeal, which could undermine and discredit the tax.\"","slug":"whether-or-not-a-lvt-incentivizes-land-development-depends-largely-on-whether-the","title":"Whether or not a LVT incentivizes land development depends largely on whether the value of land is assessed according to its \"highest and best use\" (HABU) or its existing use.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n","ledeExcerpt":"Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.\n\nIn 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.","featured":true}],"sources":[{"id":"121721052","lede":"\"The objective of this research is to evaluate a land value tax as a potential policy tool to moderate sprawling development in Nashville, TN, the nation’s most sprawling metropolitan community with a population of one million or more. To achieve this objective, the hypothesis is empirically tested that a land value tax encourages more development closer to preexisting development than farther from preexisting development. Specifically, the marginal effects of a land value tax on the probability of land development is hypothesized to be greater in areas around preexisting development than in areas more distant from preexisting development. The findings show that the marginal effects of a land value tax on the probability of developing parcels that neighbored previously developed parcels was greater than the probability of developing parcels that did not neighbor previously developed parcels. This finding suggests that land value taxation could be used to design compact development strategies that address sprawling development.\"","link":"https://ideas.repec.org/p/ags/saeana/46760.html","slug":"measuring-the-effects-of-a-land-value-tax-on-land-development","kind":"Academic Paper","title":"Measuring the Effects of a Land Value Tax on Land Development","year":"2009-01-01","researchers":[{"id":"121721046","location":"","name":"Seong-Hoon Cho","seoDescription":"","slug":"seong-hoon-cho"},{"id":"121721047","location":"","name":"Seung Gyu Kim","seoDescription":"","slug":"seung-gyu-kim"},{"id":"121721051","location":"","name":"Roland K. Roberts","seoDescription":"","slug":"roland-k-roberts"}]}]},{"id":"121721103","lede":"\"Policy implementation in Nashville is particularly challenging because many of the policy instruments are often viewed as an infringement on private property rights that many Southerners hold as sacrosanct. Thus, there is interest in alternative instruments, other than zonal and acquisition types of policies, to moderate sprawl in the area. A higher tax rate on land than on land improvement or a “land value tax” is a potential policy tool to moderate sprawl in the Nashville area because it does not directly infringe on private property rights.\"","slug":"traditional-policies-to-control-urban-sprawl-can-rub-against-commitments-to-priva","title":"Traditional policies to control urban sprawl can rub against commitments to private property rights. Land value taxation offers an alternative that's amenable to conservatives and progressive alike.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"political-philosophy","name":"Political Philosophy","id":"121524327","lede":"","ledeExcerpt":"","featured":null},{"slug":"political-feasibility","name":"Political Feasibility","id":"121668951","lede":"","ledeExcerpt":"","featured":null},{"slug":"political-barriers","name":"Political Barriers","id":"99764018","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121721052","lede":"\"The objective of this research is to evaluate a land value tax as a potential policy tool to moderate sprawling development in Nashville, TN, the nation’s most sprawling metropolitan community with a population of one million or more. To achieve this objective, the hypothesis is empirically tested that a land value tax encourages more development closer to preexisting development than farther from preexisting development. Specifically, the marginal effects of a land value tax on the probability of land development is hypothesized to be greater in areas around preexisting development than in areas more distant from preexisting development. The findings show that the marginal effects of a land value tax on the probability of developing parcels that neighbored previously developed parcels was greater than the probability of developing parcels that did not neighbor previously developed parcels. This finding suggests that land value taxation could be used to design compact development strategies that address sprawling development.\"","link":"https://ideas.repec.org/p/ags/saeana/46760.html","slug":"measuring-the-effects-of-a-land-value-tax-on-land-development","kind":"Academic Paper","title":"Measuring the Effects of a Land Value Tax on Land Development","year":"2009-01-01","researchers":[{"id":"121721046","location":"","name":"Seong-Hoon Cho","seoDescription":"","slug":"seong-hoon-cho"},{"id":"121721047","location":"","name":"Seung Gyu Kim","seoDescription":"","slug":"seung-gyu-kim"},{"id":"121721051","location":"","name":"Roland K. Roberts","seoDescription":"","slug":"roland-k-roberts"}]}]},{"id":"121721084","lede":"By raising the tax rate on land and lowering that on buildings, LVT promotes the incentive to develop improvements on existing land, rather than building on new land.","slug":"in-theory-a-land-value-tax-encourages-compact-urban-development","title":"In theory, a land value tax encourages compact urban development.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

It's also used to designate whether plots of land are "single use" or "mixed use", dictating whether different types may coexist or not on particular land plots.

\n","ledeExcerpt":"Zoning is a type of municipal regulation that governs how land may be used. As a method of urban planning, it's used to govern what kinds of development may occur on given land plots, including residential, commercial, agricultural, industrial, or hospitality.\n\nIt's also used to designate whether plots of land are \"single use\" or \"mixed use\", dictating whether different types may coexist or not on particular land plots.","featured":null},{"slug":"urban-development","name":"Urban Development","id":"99017961","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121697139","lede":"","link":"https://www.dcpolicycenter.org/publications/land-value-tax/","slug":"land-value-tax-can-it-work-in-the-district","kind":"Report","title":"Land Value Tax: Can it Work in the District?","year":"2019-01-01","researchers":[{"id":"121697137","location":"D.C. Policy Center","name":"Yesim Sayin Taylor","seoDescription":"","slug":"yesim-sayin-taylor"}]}]},{"id":"121720948","lede":"Land near public transport, in safe neighborhoods, and in close proximity to job centers all benefit from higher land values, through causes unrelated to landowners. LVT would shift tax burdens onto this higher land value areas, so that those who benefit the most from community investments also return more of that benefit back to the community, via taxation.","slug":"land-value-taxation-can-help-shift-tax-burden-to-land-in-urban-centers-that-benef","title":"Land value taxation can help shift tax burden to land in urban centers that benefit the most from existing public spending.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"tax-burden","name":"Tax Burden","id":"99018007","lede":"","ledeExcerpt":"","featured":null},{"slug":"inequality","name":"Inequality","id":"69359341","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

It's also used to designate whether plots of land are "single use" or "mixed use", dictating whether different types may coexist or not on particular land plots.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

It's also used to designate whether plots of land are "single use" or "mixed use", dictating whether different types may coexist or not on particular land plots.

\n","ledeExcerpt":"Zoning is a type of municipal regulation that governs how land may be used. As a method of urban planning, it's used to govern what kinds of development may occur on given land plots, including residential, commercial, agricultural, industrial, or hospitality.\n\nIt's also used to designate whether plots of land are \"single use\" or \"mixed use\", dictating whether different types may coexist or not on particular land plots.","featured":null}],"sources":[{"id":"121697139","lede":"","link":"https://www.dcpolicycenter.org/publications/land-value-tax/","slug":"land-value-tax-can-it-work-in-the-district","kind":"Report","title":"Land Value Tax: Can it Work in the District?","year":"2019-01-01","researchers":[{"id":"121697137","location":"D.C. Policy Center","name":"Yesim Sayin Taylor","seoDescription":"","slug":"yesim-sayin-taylor"}]}]},{"id":"121697135","lede":"The letter, co-signed by leading economists, states: “The rental value of land arises from three sources. The first is the inherent natural productivity of land, combined with the fact that land is limited. The second source of land value is the growth of communities; the third is the provision of public services. All citizens have equal claims on the component of land value that arises from nature. The component of land value that arises from community growth and provision of services is the most sensible source of revenue for financing public services that raise the rental value of surrounding land. These services include roads, urban transit networks, parks, and public utility networks for such services as electricity, telephones, water and sewers. A public revenue system should strive to collect as much of the rent of land as possible, allocating the part of rent derived from nature to all citizens equally, and the part derived from public services to the governmental units that provide those services.”","slug":"the-value-of-land-arises-from-three-sources-the-fact-that-land-is-both-productive","title":"The value of land arises from three sources: the fact that land is both productive and limited, the growth of communities, and the provision of public services.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"land-valuation","name":"Land Valuation","id":"121670405","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"We define growth as the expansion of wealth in society; growth is about generating a \"a bigger pie\".\n\nAmidst debates over the merits of continued growth, we begin with the idea that *all else equal*, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.\n\nBut there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising revised measures, such as Tyler Cowen's notion of wealth plus\" (GDP, plus measures of leisure time, household production, and environmental considerations), or constructing altogether new proxies (OECD's 'Better Life Index), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.","featured":true}],"sources":[{"id":"121670324","lede":"","link":"https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=1036&context=nerc_pub","slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county","kind":"Report","title":"Land Value Tax Analysis: Simulating the Tax in Multnomah County","year":"2019-01-01","researchers":[{"id":"121670320","location":"Portland State University","name":"Peter Hulseman","seoDescription":"","slug":"peter-hulseman"},{"id":"121670321","location":"Portland State University","name":"Adam Rovang","seoDescription":"","slug":"adam-rovang"},{"id":"121670322","location":"Portland State University","name":"Devin Bales","seoDescription":"","slug":"devin-bales"},{"id":"121670323","location":"Portland State University","name":"Hoang The Nguyen","seoDescription":"","slug":"hoang-the-nguyen"}]}]},{"id":"121693863","lede":"-","slug":"research-suggests-the-city-of-pittsburgh-repealed-their-split-rate-lvt-after-near","title":"Research suggests the city of Pittsburgh repealed their split-rate LVT after nearly 100 years because of poor assessment and rate setting practices, despite evidence that LVT encouraged building activity.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"urban-development","name":"Urban Development","id":"99017961","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121670324","lede":"","link":"https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=1036&context=nerc_pub","slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county","kind":"Report","title":"Land Value Tax Analysis: Simulating the Tax in Multnomah County","year":"2019-01-01","researchers":[{"id":"121670320","location":"Portland State University","name":"Peter Hulseman","seoDescription":"","slug":"peter-hulseman"},{"id":"121670321","location":"Portland State University","name":"Adam Rovang","seoDescription":"","slug":"adam-rovang"},{"id":"121670322","location":"Portland State University","name":"Devin Bales","seoDescription":"","slug":"devin-bales"},{"id":"121670323","location":"Portland State University","name":"Hoang The Nguyen","seoDescription":"","slug":"hoang-the-nguyen"}]}]},{"id":"121693855","lede":"-","slug":"farms-could-experience-tax-hikes-under-lvt-since-they-provide-value-without-devel","title":"Farms could experience tax hikes under LVT since they provide value without development, and may require exemptions.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"tax-burden","name":"Tax Burden","id":"99018007","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121670324","lede":"","link":"https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=1036&context=nerc_pub","slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county","kind":"Report","title":"Land Value Tax Analysis: Simulating the Tax in Multnomah County","year":"2019-01-01","researchers":[{"id":"121670320","location":"Portland State University","name":"Peter Hulseman","seoDescription":"","slug":"peter-hulseman"},{"id":"121670321","location":"Portland State University","name":"Adam Rovang","seoDescription":"","slug":"adam-rovang"},{"id":"121670322","location":"Portland State University","name":"Devin Bales","seoDescription":"","slug":"devin-bales"},{"id":"121670323","location":"Portland State University","name":"Hoang The Nguyen","seoDescription":"","slug":"hoang-the-nguyen"}]}]},{"id":"121693852","lede":"-","slug":"mitigation-strategies-for-the-undue-tax-burden-placed-by-lvt-on-those-with-low-in","title":"Mitigation strategies for the undue tax burden placed by LVT on those with low incomes but high asset values include grandfathering such households into previous tax arrangements until death or sale of property, or a gradual phase-in of LVT.","showTitleAsQuote":false,"epistemicStatus":"practical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121670324","lede":"","link":"https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=1036&context=nerc_pub","slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county","kind":"Report","title":"Land Value Tax Analysis: Simulating the Tax in Multnomah County","year":"2019-01-01","researchers":[{"id":"121670320","location":"Portland State University","name":"Peter Hulseman","seoDescription":"","slug":"peter-hulseman"},{"id":"121670321","location":"Portland State University","name":"Adam Rovang","seoDescription":"","slug":"adam-rovang"},{"id":"121670322","location":"Portland State University","name":"Devin Bales","seoDescription":"","slug":"devin-bales"},{"id":"121670323","location":"Portland State University","name":"Hoang The Nguyen","seoDescription":"","slug":"hoang-the-nguyen"}]}]},{"id":"121693836","lede":"\"Ultimately, land-based property tax systems, whether a split-rate LVT or an AXI building exemption tax, do what they are designed to do—place more of the tax burden on wealthier land-owners, and encourage the highest and best use of land. Based on the simulations performed on the INE and OSE communities, a LVT would provide a more equitable tax structure, incentivize structure upgrading and development of underutilized properties, and discourage “holding” land for speculative purposes. Furthermore, the potential downsides of the tax policy—such as increasing taxes on low-income homeowners—can be mitigated with carefully crafted legislation. In short, many of the inequities created by Measure 5 and 50 would likely be reversed if a LVT were implemented in the Portland region.\"","slug":"in-the-case-of-multnomah-county-oregon-the-potential-downsides-of-land-value-taxa","title":"In the case of Multnomah County, Oregon, the potential downsides of land value taxation - such as increasing taxes on low-income homeowners - can be mitigated through complementary legislation.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"tax-burden","name":"Tax Burden","id":"99018007","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121670324","lede":"","link":"https://pdxscholar.library.pdx.edu/cgi/viewcontent.cgi?article=1036&context=nerc_pub","slug":"land-value-tax-analysis-simulating-the-tax-in-multnomah-county","kind":"Report","title":"Land Value Tax Analysis: Simulating the Tax in Multnomah County","year":"2019-01-01","researchers":[{"id":"121670320","location":"Portland State University","name":"Peter Hulseman","seoDescription":"","slug":"peter-hulseman"},{"id":"121670321","location":"Portland State University","name":"Adam Rovang","seoDescription":"","slug":"adam-rovang"},{"id":"121670322","location":"Portland State University","name":"Devin Bales","seoDescription":"","slug":"devin-bales"},{"id":"121670323","location":"Portland State University","name":"Hoang The Nguyen","seoDescription":"","slug":"hoang-the-nguyen"}]}]},{"id":"121693825","lede":"“So how does an LVT affect the price of land? Using the bathtub metaphor again, let's put a valve under the tap, so half of the water goes into the tub and half goes somewhere else. The amount of water flowing out of the tap does not change (the land is as productive as it ever was). However, the amount of water collected in my bathtub does change; five minutes of flow will produce less water in the tub than it did before. If I'm trying to sell my land to someone, they're going to notice the tax and correctly calculate that it will earn them half as much income over X years, so they'll pay half as much for it.”","slug":"raising-land-value-tax-rates-drives-down-the-price-of-land-by-reducing-the-portio","title":"Raising land value tax rates drives down the price of land by reducing the portion of land's output that goes to owners.","showTitleAsQuote":false,"epistemicStatus":"theoretical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

GDP refers to the total value of a nation's production of goods and services.

\n\n

\n","ledeExcerpt":"GDP refers to the total value of a nation's production of goods and services.\n\nThe formula for GDP is: consumer spending (C) + business investment (I) + government spending (G) + net exports (X-M). Nominal GDP refers to the unadjusted total, whereas \"Real GDP\" adjusts that total to account for inflation.\n\nSimon Kuznets invented the notion in 1937. It has since become the guiding metric to measure not only the volume and value of national production, but the welfare of the nation. Of all the criticisms of such \"fetishization of GDP\" (Joseph Stiglitz), the simplest may be that given by Kuznets himself, who wrote: \"The welfare of a nation can scarcely be inferred from a measurement of national income.\"\n\nThirty years later, Kuznets adds: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”","featured":null},{"slug":"taxes","name":"Taxes","id":"49378929","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121669926","lede":"A case for responding to the economic effects of the Covid-19 crises by shifting federal tax burdens onto land value taxes. The authors develop an econometric model of the US economy, and show that raising tax rates on land, balanced by decreasing tax rates on capital and labor, can maintain current levels of expenditure and debt, while raising welfare and output.","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3954888","slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land","kind":"Academic Paper","title":"Post-Corona Balanced-Budget Super-Stimulus: The Case for Shifting Taxes onto Land","year":"2021-01-01","researchers":[{"id":"121669922","location":"Center for Economic and Policy Research","name":"Michael Kumhof","seoDescription":"","slug":"michael-kumhof"},{"id":"121669923","location":"Virginia Polytechnic Institute & State University - Department of Economics","name":"T. Nicolaus Tideman","seoDescription":"","slug":"t-nicolaus-tideman"},{"id":"121669924","location":"University of Missouri at Kansas City - Department of Economics ; Bard College - The Levy Economics Institute","name":"Michael Hudson","seoDescription":"","slug":"michael-hudson"},{"id":"121669925","location":"London School of Economics & Political Science (LSE) - Financial Markets Group","name":"Charles Goodhart","seoDescription":"","slug":"charles-goodhart"}]}]},{"id":"121670436","lede":"“Welfare and output gains for a wealth tax that raises the same revenue, and which increases the tax rates on capital and land equally, are only half as large as the baseline.”","slug":"in-an-econometric-model-land-value-taxation-yields-double-the-amount-of-welfare-a","title":"In an econometric model, land value taxation yields double the amount of welfare and output gains as a wealth tax that raises the same revenue.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[],"tags":[{"slug":"welfare","name":"Welfare","id":"23933425","lede":"

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

GDP refers to the total value of a nation's production of goods and services.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n","ledeExcerpt":"Public policies that require significant revenue often meet an important question: \"how will you pay for that?\" Pay-fors are potential sources of funding.\n\nWhile it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.","featured":null},{"slug":"taxes","name":"Taxes","id":"49378929","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121670296","lede":"","link":"https://www.jstor.org/stable/3486038?read-now=1&refreqid=excelsior%3Aa80e2e4f164608a5bd818ab1af9442d7&seq=1#page_scan_tab_contents","slug":"how-much-revenue-would-a-full-land-value-tax-yield","kind":"Academic Paper","title":"How Much Revenue Would a Full Land Value Tax Yield?","year":"1985-01-01","researchers":[{"id":"121670295","location":"Indiana University of Pennsylvania","name":"Steven Cord","seoDescription":"","slug":"steven-cord"}]}]},{"id":"121669977","lede":"-","slug":"five-urban-centers-account-for-48-of-all-urban-land-value-in-the-u-s","title":"Five urban centers account for 48% of all urban land value in the U.S.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"urban-development","name":"Urban Development","id":"99017961","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121669975","lede":"\"We estimate the first cross-sectional index of transaction-based land values for every U.S. metropolitan area. The index accounts for geographic selection and incorporates novel shrinkage methods using a prior belief based on urban economic theory. Land values at the city center increase with city size, as do land-value gradients; both are highly variable across cities. Urban land values are estimated at more than two times GDP in 2006. These estimates are higher and less volatile than estimates from residual (total - structure) methods. Five urban agglomerations account for 48% of all urban land value in the United States.\"","link":"https://direct.mit.edu/rest/article-abstract/100/3/454/58476/Metropolitan-Land-Values?redirectedFrom=fulltext","slug":"metropolitan-land-values","kind":"Academic Paper","title":"Metropolitan Land Values","year":"2018-01-01","researchers":[{"id":"121669971","location":"University of Illinois and NBER","name":"David Albouy","seoDescription":"","slug":"david-albouy"},{"id":"121669972","location":"University of Michigan","name":"Gabriel Ehrlich","seoDescription":"","slug":"gabriel-ehrlich"},{"id":"121669973","location":"University of Illinois","name":"Minchul Shin","seoDescription":"","slug":"minchul-shin"}]}]},{"id":"121669976","lede":"-","slug":"between-2005-2010-new-york-city-s-urban-land-value-was-worth-roughly-2-5-trillion","title":"Between 2005-2010, New York City's urban land value was worth roughly $2.5 trillion (just the land alone).","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"pay-fors","name":"Pay-Fors","id":"99763897","lede":"

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n","ledeExcerpt":"Public policies that require significant revenue often meet an important question: \"how will you pay for that?\" Pay-fors are potential sources of funding.\n\nWhile it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121669944","lede":"","link":"https://astralcodexten.substack.com/p/does-georgism-work-is-land-really?s=r","slug":"does-georgism-work-part-1-is-land-really-a-big-deal","kind":"Article","title":"Does Georgism Work? Part 1: Is Land Really A Big Deal?","year":"2021-01-01","researchers":[{"id":"121668940","location":"https://www.fortressofdoors.com/","name":"Lars Doucet","seoDescription":"","slug":"lars-doucet"}]},{"id":"121669975","lede":"\"We estimate the first cross-sectional index of transaction-based land values for every U.S. metropolitan area. The index accounts for geographic selection and incorporates novel shrinkage methods using a prior belief based on urban economic theory. Land values at the city center increase with city size, as do land-value gradients; both are highly variable across cities. Urban land values are estimated at more than two times GDP in 2006. These estimates are higher and less volatile than estimates from residual (total - structure) methods. Five urban agglomerations account for 48% of all urban land value in the United States.\"","link":"https://direct.mit.edu/rest/article-abstract/100/3/454/58476/Metropolitan-Land-Values?redirectedFrom=fulltext","slug":"metropolitan-land-values","kind":"Academic Paper","title":"Metropolitan Land Values","year":"2018-01-01","researchers":[{"id":"121669971","location":"University of Illinois and NBER","name":"David Albouy","seoDescription":"","slug":"david-albouy"},{"id":"121669972","location":"University of Michigan","name":"Gabriel Ehrlich","seoDescription":"","slug":"gabriel-ehrlich"},{"id":"121669973","location":"University of Illinois","name":"Minchul Shin","seoDescription":"","slug":"minchul-shin"}]}]},{"id":"121669968","lede":"-","slug":"in-2019-a-national-lvt-is-estimated-to-raise-anywhere-from-25-1-1-trillion-76-3-3","title":"In 2019, a national LVT is estimated to raise anywhere from 25% ($1.1 trillion) - 76% ($3.36 trillion) of annual federal spending, depending on methodologies used to produce estimates.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n\n

Generally, "capital" is any durable, produced good that is being 'put to work' as an input in further production; capital is any productive asset engaged in the process of producing further value.

\n\n

Examples include a factory and its machinery, financial assets that accrue value, or intellectual property such as patents.

\n","ledeExcerpt":"Generally, \"capital\" is any durable, produced good that is being 'put to work' as an input in further production; capital is any productive asset engaged in the process of producing further value.\n\nExamples include a factory and its machinery, financial assets that accrue value, or intellectual property such as patents.","featured":null}],"sources":[{"id":"121669926","lede":"A case for responding to the economic effects of the Covid-19 crises by shifting federal tax burdens onto land value taxes. The authors develop an econometric model of the US economy, and show that raising tax rates on land, balanced by decreasing tax rates on capital and labor, can maintain current levels of expenditure and debt, while raising welfare and output.","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3954888","slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land","kind":"Academic Paper","title":"Post-Corona Balanced-Budget Super-Stimulus: The Case for Shifting Taxes onto Land","year":"2021-01-01","researchers":[{"id":"121669922","location":"Center for Economic and Policy Research","name":"Michael Kumhof","seoDescription":"","slug":"michael-kumhof"},{"id":"121669923","location":"Virginia Polytechnic Institute & State University - Department of Economics","name":"T. Nicolaus Tideman","seoDescription":"","slug":"t-nicolaus-tideman"},{"id":"121669924","location":"University of Missouri at Kansas City - Department of Economics ; Bard College - The Levy Economics Institute","name":"Michael Hudson","seoDescription":"","slug":"michael-hudson"},{"id":"121669925","location":"London School of Economics & Political Science (LSE) - Financial Markets Group","name":"Charles Goodhart","seoDescription":"","slug":"charles-goodhart"}]},{"id":"121669944","lede":"","link":"https://astralcodexten.substack.com/p/does-georgism-work-is-land-really?s=r","slug":"does-georgism-work-part-1-is-land-really-a-big-deal","kind":"Article","title":"Does Georgism Work? Part 1: Is Land Really A Big Deal?","year":"2021-01-01","researchers":[{"id":"121668940","location":"https://www.fortressofdoors.com/","name":"Lars Doucet","seoDescription":"","slug":"lars-doucet"}]}]},{"id":"121669956","lede":"Assumed national land rents is $1.2 trillion in 2020 (this follows the Federal Reserve’s method, using a low, 5% capitalization rate). Further assumptions include 209 million as the American adult population, and a 50% land share. For these figures, any individual with a property worth less than $230,000 would either break even or profit. Two-adult households would break even at $460,000 in property value.","slug":"using-conservative-estimates-of-national-land-value-a-ubi-funded-by-lvt-revenues","title":"Using conservative estimates of national land value, a UBI funded by LVT revenues could provide roughly $5,750 per adult, per year.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"policy-design-details","name":"Policy Design Details","id":"100414960","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Generally, "capital" is any durable, produced good that is being 'put to work' as an input in further production; capital is any productive asset engaged in the process of producing further value.

\n\n

Examples include a factory and its machinery, financial assets that accrue value, or intellectual property such as patents.

\n","ledeExcerpt":"Generally, \"capital\" is any durable, produced good that is being 'put to work' as an input in further production; capital is any productive asset engaged in the process of producing further value.\n\nExamples include a factory and its machinery, financial assets that accrue value, or intellectual property such as patents.","featured":null}],"sources":[{"id":"121669926","lede":"A case for responding to the economic effects of the Covid-19 crises by shifting federal tax burdens onto land value taxes. The authors develop an econometric model of the US economy, and show that raising tax rates on land, balanced by decreasing tax rates on capital and labor, can maintain current levels of expenditure and debt, while raising welfare and output.","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3954888","slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land","kind":"Academic Paper","title":"Post-Corona Balanced-Budget Super-Stimulus: The Case for Shifting Taxes onto Land","year":"2021-01-01","researchers":[{"id":"121669922","location":"Center for Economic and Policy Research","name":"Michael Kumhof","seoDescription":"","slug":"michael-kumhof"},{"id":"121669923","location":"Virginia Polytechnic Institute & State University - Department of Economics","name":"T. Nicolaus Tideman","seoDescription":"","slug":"t-nicolaus-tideman"},{"id":"121669924","location":"University of Missouri at Kansas City - Department of Economics ; Bard College - The Levy Economics Institute","name":"Michael Hudson","seoDescription":"","slug":"michael-hudson"},{"id":"121669925","location":"London School of Economics & Political Science (LSE) - Financial Markets Group","name":"Charles Goodhart","seoDescription":"","slug":"charles-goodhart"}]}]},{"id":"121669933","lede":"“Policymakers can consider a range of different sizes of land tax reforms. We show that the relationship between the land tax rate and the resulting gain in output is monotonically increasing but tapers off as the tax rate rises. In other words, the greatest incremental benefits of a 1 percentage point increase in the tax rate are realized at today’s very low rates, but for the case of LAVT they remain large up through a tax rate of around 10%. Policymakers will of course trade off these economic gains with political considerations, because very high tax rates may be difficult to implement. But in this trade-off, a key consideration is that the output gains of the reform would become so large in due course, and that therefore the number of winners and the size of their gains would be so large, that some relief for deserving losers would then become quite easy to finance.”","slug":"the-marginal-benefits-in-output-of-a-1-increase-in-land-tax-rates-remain-large-un","title":"The marginal benefits in output of a 1% increase in land tax rates remain large until a tax rate around 10%, after which the output gains taper off.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752","lede":"

GDP refers to the total value of a nation's production of goods and services.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

GDP refers to the total value of a nation's production of goods and services.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n","ledeExcerpt":"Welfare refers to government-sponsored assistance programs intended to ensure that all members of society can meet their basic needs. Examples include social insurance, Medicaid, and disability insurance.\n\nThe vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.","featured":true},{"slug":"taxes","name":"Taxes","id":"49378929","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121669926","lede":"A case for responding to the economic effects of the Covid-19 crises by shifting federal tax burdens onto land value taxes. The authors develop an econometric model of the US economy, and show that raising tax rates on land, balanced by decreasing tax rates on capital and labor, can maintain current levels of expenditure and debt, while raising welfare and output.","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3954888","slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land","kind":"Academic Paper","title":"Post-Corona Balanced-Budget Super-Stimulus: The Case for Shifting Taxes onto Land","year":"2021-01-01","researchers":[{"id":"121669922","location":"Center for Economic and Policy Research","name":"Michael Kumhof","seoDescription":"","slug":"michael-kumhof"},{"id":"121669923","location":"Virginia Polytechnic Institute & State University - Department of Economics","name":"T. Nicolaus Tideman","seoDescription":"","slug":"t-nicolaus-tideman"},{"id":"121669924","location":"University of Missouri at Kansas City - Department of Economics ; Bard College - The Levy Economics Institute","name":"Michael Hudson","seoDescription":"","slug":"michael-hudson"},{"id":"121669925","location":"London School of Economics & Political Science (LSE) - Financial Markets Group","name":"Charles Goodhart","seoDescription":"","slug":"charles-goodhart"}]}]},{"id":"121668987","lede":"They write: \"...there is a danger that you will adopt features of our [Western] economies that keep us from being as prosperous as we might be. In particular, there is a danger that you may follow us in allowing most of the rent of land to be collected privately.\n\nIt is important that the rent of land be retained as a source of government revenue. While the governments of developed nations with market economies collect some of the rent of land in taxes, they do not collect nearly as much as they could, and they therefore make unnecessarily great use of taxes that impede their economies - taxes on such things as incomes, sales, and the value of capital.\"","slug":"a-group-of-nobel-laureate-economists-co-signed-an-open-letter-sent-to-gorbachev-i","title":"A group of Nobel Laureate economists co-signed an open letter sent to Gorbachev in 1990 advocating a land value tax, urging Russia not to follow the Western economies in the \"danger\" of allowing most of the rent of land to be collected privately. Co-signers included Robert Solow, James Tobin, William Vickrey, and William Baumol.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"74233750","title":"Land Value Tax","slug":"land-value-tax"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n","ledeExcerpt":"Labor institutions are any policy intervention or collective organization that affords workers power in wage and employment determinations. Examples include labor unions, minimum wages, employment protections, unemployment insurance, codetermination, and collective bargaining. ","featured":null}],"sources":[{"id":"96360056","lede":"Provides a qualitative review of existing codetermination laws, and a quantitative study on the country-level effects of codetermination reforms between the 1960's and 2010's. Overall, the authors find no negative effects, and hints of potential positive ones. They explore three explanations for codeterminations limited impact: limited power conferral, high baselines of informal worker participation, and high baselines of formal worker institutions. ","link":"https://www.nber.org/papers/w28921?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg21","slug":"what-does-codetermination-do","kind":"Academic Paper","title":"What Does Codetermination Do?","year":"2021-01-01","researchers":[{"id":"69609426","location":"","name":"Simon Jäger","seoDescription":"","slug":"simon-jager"},{"id":"96360049","location":"","name":"Shakkad Noy","seoDescription":"","slug":"shakkad-noy"},{"id":"69609429","location":"","name":"Benjamin Schoefer","seoDescription":"","slug":"benjamin-schoefer"}]}]},{"id":"121544444","lede":"Although recent surveys suggest codetermination doesn't grant significant authority to workers, it appears that their highest arena of influence under codetermination laws are working conditions.","slug":"workers-and-managers-unanimously-agree-that-worker-representatives-wield-more-inf","title":"Workers and managers unanimously agree that worker representatives wield more influence over decisions about working conditions than over any other kind of decision.","showTitleAsQuote":false,"epistemicStatus":"anecdotal","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"labor-power","name":"Labor Power","id":"69609536","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"96360056","lede":"Provides a qualitative review of existing codetermination laws, and a quantitative study on the country-level effects of codetermination reforms between the 1960's and 2010's. Overall, the authors find no negative effects, and hints of potential positive ones. They explore three explanations for codeterminations limited impact: limited power conferral, high baselines of informal worker participation, and high baselines of formal worker institutions. ","link":"https://www.nber.org/papers/w28921?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg21","slug":"what-does-codetermination-do","kind":"Academic Paper","title":"What Does Codetermination Do?","year":"2021-01-01","researchers":[{"id":"69609426","location":"","name":"Simon Jäger","seoDescription":"","slug":"simon-jager"},{"id":"96360049","location":"","name":"Shakkad Noy","seoDescription":"","slug":"shakkad-noy"},{"id":"69609429","location":"","name":"Benjamin Schoefer","seoDescription":"","slug":"benjamin-schoefer"}]}]},{"id":"121544436","lede":"\"There is nearly unanimous agreement that worker representatives have no influence on broad strategic decisions, even when they sit on company boards. Fewer than 5% of Finnish worker representatives believe they can affect strategic decisions (Harju, Jäger, and Schoefer, 2021), and Swedish Managing Directors report that worker representatives are almost completely inactive during strategic discussions in board meetings (Levinson, 2000). The general perception among worker representatives is that strategic decisions are made out of their view, and presented to them once management’s mind is already made up (Wheeler, 2002; Gold, Kluge, and Conchon, 2010). While this survey evidence leaves room for equilibrium or anticipation effects of board-level representation on the decisions of managers, this self-professed near-complete lack of influence on strategic decisions highlights the lack of power conveyed by arrangements like minority board-level representation. Worker representatives’ inability to influence strategic decisions in particular may help explain the absence of evidence for negative effects of codetermination on firm performance.","slug":"there-is-nearly-unanimous-agreement-that-worker-representatives-have-no-influence","title":"There is nearly unanimous agreement that worker representatives have no influence on broad strategic decisions, even when they sit on company boards.","showTitleAsQuote":true,"epistemicStatus":"anecdotal","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"labor-power","name":"Labor Power","id":"69609536","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"96360056","lede":"Provides a qualitative review of existing codetermination laws, and a quantitative study on the country-level effects of codetermination reforms between the 1960's and 2010's. Overall, the authors find no negative effects, and hints of potential positive ones. They explore three explanations for codeterminations limited impact: limited power conferral, high baselines of informal worker participation, and high baselines of formal worker institutions. ","link":"https://www.nber.org/papers/w28921?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg21","slug":"what-does-codetermination-do","kind":"Academic Paper","title":"What Does Codetermination Do?","year":"2021-01-01","researchers":[{"id":"69609426","location":"","name":"Simon Jäger","seoDescription":"","slug":"simon-jager"},{"id":"96360049","location":"","name":"Shakkad Noy","seoDescription":"","slug":"shakkad-noy"},{"id":"69609429","location":"","name":"Benjamin Schoefer","seoDescription":"","slug":"benjamin-schoefer"}]}]},{"id":"121544432","lede":"\"The evidence for a robust culture of informal worker involvement comes from interviews of European managers conducted as part of the European Company Survey. As illustrated in Figure 8, across both the 2013 and 2019 waves of the survey, managers in establishments without formal worker representation report levels of worker involvement in decision-making comparable to the levels of worker involvement in firms with formal codetermination. For example, in the 2013 survey, just under 50% of managers in firms without formal worker representation reported that workers were directly involved in the firm’s most important recent decision, compared to 60% of managers in firms with worker representation who said that worker representatives were involved in the most important recent decision (Panel (a) of Figure 8). In the 2019 survey, about 55% of managers in establishments without worker representation said that workers directly exerted a \"moderate\" or \"great\" amount of influence over decisions about working conditions, compared to 45% of managers in firms with worker representation who said the same thing about worker representatives (Panel (b) of Figure 8). Panel (c) of Figure 8 shows that larger European firms (which are more likely to be subject to codetermination requirements) do not involve workers in decision-making more frequently than smaller firms; rather, the nature of the worker involvement simply shifts, from informal direct involvement in smaller firms to formal representation in larger firms. Panel (d) of Figure 8 shows that, in simple cross-country regressions, the strength of a country’s codetermination laws is uncorrelated with the percentage of firms in that country who report some kind of worker involvement in decision-making. Overall, this evidence paints a picture of widespread informal worker participation in decision-making even in firms without formal codetermination.\"","slug":"even-without-codetermination-european-countries-have-high-baseline-levels-of-work","title":"Even without codetermination, European countries have high baseline levels of worker participation. Surveys of European managers suggest that the level of involvement in decision-making between workers with and without formal board representation are comparable.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"labor-institutions","name":"Labor Institutions","id":"73823132","lede":"

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n","ledeExcerpt":"Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.","featured":null}],"sources":[{"id":"96360056","lede":"Provides a qualitative review of existing codetermination laws, and a quantitative study on the country-level effects of codetermination reforms between the 1960's and 2010's. Overall, the authors find no negative effects, and hints of potential positive ones. They explore three explanations for codeterminations limited impact: limited power conferral, high baselines of informal worker participation, and high baselines of formal worker institutions. ","link":"https://www.nber.org/papers/w28921?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg21","slug":"what-does-codetermination-do","kind":"Academic Paper","title":"What Does Codetermination Do?","year":"2021-01-01","researchers":[{"id":"69609426","location":"","name":"Simon Jäger","seoDescription":"","slug":"simon-jager"},{"id":"96360049","location":"","name":"Shakkad Noy","seoDescription":"","slug":"shakkad-noy"},{"id":"69609429","location":"","name":"Benjamin Schoefer","seoDescription":"","slug":"benjamin-schoefer"}]}]},{"id":"121544414","lede":"-","slug":"the-strength-of-a-country-s-codetermination-laws-is-uncorrelated-with-the-percent","title":"The strength of a country's codetermination laws is uncorrelated with the percentage of firms in that country who report some kind of worker involvement in decision-making.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474","lede":"

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

\n","ledeExcerpt":"Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see \"workplace democracy\" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.","featured":null}],"sources":[{"id":"96360056","lede":"Provides a qualitative review of existing codetermination laws, and a quantitative study on the country-level effects of codetermination reforms between the 1960's and 2010's. Overall, the authors find no negative effects, and hints of potential positive ones. They explore three explanations for codeterminations limited impact: limited power conferral, high baselines of informal worker participation, and high baselines of formal worker institutions. ","link":"https://www.nber.org/papers/w28921?utm_campaign=ntwh&utm_medium=email&utm_source=ntwg21","slug":"what-does-codetermination-do","kind":"Academic Paper","title":"What Does Codetermination Do?","year":"2021-01-01","researchers":[{"id":"69609426","location":"","name":"Simon Jäger","seoDescription":"","slug":"simon-jager"},{"id":"96360049","location":"","name":"Shakkad Noy","seoDescription":"","slug":"shakkad-noy"},{"id":"69609429","location":"","name":"Benjamin Schoefer","seoDescription":"","slug":"benjamin-schoefer"}]}]},{"id":"121544324","lede":"\"Rather, in our view, a reading of the historical evidence supports a different hypothesis: that in countries like Germany, Norway, and Sweden, codetermination laws arose because of pre-existing cultures of worker participation, rather than causing the development of those cultures. Germany and the Nordic countries have histories of industrial democracy, worker mobilization, and social partnership dating back to at least the early 1900s, with the codetermination reforms we study in the 1960s onwards being codifications and expansions of pre-existing ad-hoc arrangements (Adler, 1922; Bjorheim, 1974; Knudsen, 2006; Sippola, 2012; Votinius, 2012; McGaughey, 2016). We remain agnostic about what caused these cultures to develop in the first place, but it is implausible to suggest that, e.g., the high level of cooperation in contemporary Swedish industrial relations is entirely attributable to the introduction of minority board-level representation in the 1970s.\"","slug":"in-countries-like-germany-norway-and-sweden-codetermination-laws-may-have-develop","title":"In countries like Germany, Norway, and Sweden, codetermination laws may have developed from pre-existing cultures of worker participation, rather than causing the development of those cultures.","showTitleAsQuote":false,"epistemicStatus":"anecdotal","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474","lede":"

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

GDP refers to the total value of a nation's production of goods and services.

\n\n

\n","ledeExcerpt":"GDP refers to the total value of a nation's production of goods and services.\n\nThe formula for GDP is: consumer spending (C) + business investment (I) + government spending (G) + net exports (X-M). Nominal GDP refers to the unadjusted total, whereas \"Real GDP\" adjusts that total to account for inflation.\n\nSimon Kuznets invented the notion in 1937. It has since become the guiding metric to measure not only the volume and value of national production, but the welfare of the nation. Of all the criticisms of such \"fetishization of GDP\" (Joseph Stiglitz), the simplest may be that given by Kuznets himself, who wrote: \"The welfare of a nation can scarcely be inferred from a measurement of national income.\"\n\nThirty years later, Kuznets adds: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”","featured":null},{"slug":"developing-countries","name":"Developing Countries","id":"121520123","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121544286","lede":"\"We provide evidence that democracy has a significant and robust positive effect on GDP. Our empirical strategy relies on a dichotomous measure of democracy coded from several sources to reduce measurement error and controls for country fixed effects and the rich dynamics of GDP, which otherwise confound the effect of democracy on economic growth. Our baseline results use a linear model for GDP dynamics estimated using either a standard within estimator or various different Generalized Method of Moments estimators, and show that democratizations increase GDP per capita by about 20% in the long run. These results are confirmed when we use a semiparametric propensity score matching estimator to control for GDP dynamics. We also obtain similar results using regional waves of democratizations and reversals to instrument for country democracy. Our results suggest that democracy increases future GDP by encouraging investment, increasing schooling, inducing economic reforms, improving public good provision, and reducing social unrest. We find little support for the view that democracy is a constraint on economic growth for less developed economies.\"","link":"https://www.journals.uchicago.edu/doi/abs/10.1086/700936?mobileUi=0&","slug":"democracy-does-cause-growth","kind":"Academic Paper","title":"Democracy Does Cause Growth","year":"2019-01-01","researchers":[{"id":"121544280","location":"Massachusetts Institute of Technology","name":"Daron Acemoglu","seoDescription":"","slug":"daron-acemoglu"},{"id":"121544281","location":"Columbia University","name":"Suresh Naidu","seoDescription":"","slug":"suresh-naidu"},{"id":"121544282","location":"Boston University","name":"Pascual Restrepo","seoDescription":"","slug":"pascual-restrepo"},{"id":"121544285","location":"University of Chicago","name":"James A. Robinson","seoDescription":"","slug":"james-a-robinson"}]}]},{"id":"121544291","lede":"\"Overall, we take these results as suggesting that democracy might be working through a number of channels, in particular, by encouraging economic reforms, increasing human capital (especially primary schooling), and raising state capacity and some aspects of public services (especially re- lated to health) as well as, to some degree, increasing investment and reducing social unrest. Of course, our strategy does not allow us to conclusively establish that these are the most important mechanisms, but the fact that these variables increase following a democratization even controlling for lags of GDP per capita suggests they are prime candidates for the channels through which democracy might be causing higher GDP.\"","slug":"democracy-may-encourage-growth-through-economic-reforms-increasing-human-capital","title":"Democracy may encourage growth through: economic reforms, increasing human capital (especially through primary schooling), increasing investment, and reducing social unrest.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"democracy","name":"Democracy","id":"95836537","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

GDP refers to the total value of a nation's production of goods and services.

\n\n

\n","ledeExcerpt":"GDP refers to the total value of a nation's production of goods and services.\n\nThe formula for GDP is: consumer spending (C) + business investment (I) + government spending (G) + net exports (X-M). Nominal GDP refers to the unadjusted total, whereas \"Real GDP\" adjusts that total to account for inflation.\n\nSimon Kuznets invented the notion in 1937. It has since become the guiding metric to measure not only the volume and value of national production, but the welfare of the nation. Of all the criticisms of such \"fetishization of GDP\" (Joseph Stiglitz), the simplest may be that given by Kuznets himself, who wrote: \"The welfare of a nation can scarcely be inferred from a measurement of national income.\"\n\nThirty years later, Kuznets adds: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”","featured":null}],"sources":[{"id":"121544286","lede":"\"We provide evidence that democracy has a significant and robust positive effect on GDP. Our empirical strategy relies on a dichotomous measure of democracy coded from several sources to reduce measurement error and controls for country fixed effects and the rich dynamics of GDP, which otherwise confound the effect of democracy on economic growth. Our baseline results use a linear model for GDP dynamics estimated using either a standard within estimator or various different Generalized Method of Moments estimators, and show that democratizations increase GDP per capita by about 20% in the long run. These results are confirmed when we use a semiparametric propensity score matching estimator to control for GDP dynamics. We also obtain similar results using regional waves of democratizations and reversals to instrument for country democracy. Our results suggest that democracy increases future GDP by encouraging investment, increasing schooling, inducing economic reforms, improving public good provision, and reducing social unrest. We find little support for the view that democracy is a constraint on economic growth for less developed economies.\"","link":"https://www.journals.uchicago.edu/doi/abs/10.1086/700936?mobileUi=0&","slug":"democracy-does-cause-growth","kind":"Academic Paper","title":"Democracy Does Cause Growth","year":"2019-01-01","researchers":[{"id":"121544280","location":"Massachusetts Institute of Technology","name":"Daron Acemoglu","seoDescription":"","slug":"daron-acemoglu"},{"id":"121544281","location":"Columbia University","name":"Suresh Naidu","seoDescription":"","slug":"suresh-naidu"},{"id":"121544282","location":"Boston University","name":"Pascual Restrepo","seoDescription":"","slug":"pascual-restrepo"},{"id":"121544285","location":"University of Chicago","name":"James A. Robinson","seoDescription":"","slug":"james-a-robinson"}]}]},{"id":"121544279","lede":"-","slug":"a-german-car-dealership-provides-an-example-of-a-firm-that-went-beyond-mere-codet","title":"A German car dealership provides an example of a firm that went beyond mere codetermination, with a fuller application of economic democracy to their corporate governance structures. The company has done well, and remained competitive in its market for decades.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474","lede":"

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

\n","ledeExcerpt":"Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see \"workplace democracy\" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.","featured":null}],"sources":[{"id":"121544265","lede":"\"We analyse how countries' innovation outcomes are affected by national legislations of worker participation to corporate governance. We develop a model of employee representation laws (ERL) and innovation in the presence of incomplete labour contracts and predict heterogeneous ERL effects across different systems of dismissal regulation. We then perform a panel regression analysis, exploiting 2-digit panel data for 21 manufacturing sectors of USA, UK, India, France and Germany, over the 1977-2005 period. We find that ERL effects on aggregate innovation output are positive, statistically significant and higher in magnitude where national labour laws impose significant firing costs to the firm with respect to institutional settings in which firing costs are low or absent. These results are robust to possible technology selection dynamics, endogeneity and institutional changes in the legal system of patent protection. We also estimate ERL effects on innovation conditional on firing costs at an industry level and show that the impact of ERL is relatively larger in those sectors where the human capital contribution to production is higher. Our results have relevant implications for the optimal design of employee representation legislations.\"","link":"https://www.semanticscholar.org/paper/Employee-Representation-Legislations-and-Innovation-Belloc/0e61f36649a69d1b9a2cba2b1f06fd832b90f241","slug":"employee-representation-legislations-and-innovation","kind":"Academic Paper","title":"Employee Representation Legislations and Innovation","year":null,"researchers":[{"id":"121544264","location":"","name":"Filippo Belloc","seoDescription":"","slug":"filippo-belloc"}]}]},{"id":"121544261","lede":"\"Analysts often treat buybacks as a stand-alone issue, but there is compelling research that suggests one of the main reasons companies conduct stock buybacks is to offset their executive compensation packages. For example, Klassen and Sivakumar’s (2001) research looks at repurchase and option activity for nonfinancial firms from 1995 to 1999. Their findings indicate that firms repurchase shares particularly to avoid dilution from executive stock option compensation programs. Further, Griffin and Zhu’s (2009) research states that “we conclude that the popular use of buybacks as a form of cash distribution derives significantly from a strong contemporaneous relation between stock buybacks and CEOs’ use of stock options as compensation.” However, Weisbenner (2000) finds that for 1995 repurchase activity, overall firm options rather than executive options, are connected with repurchase activity. Whether or not offsetting pay is the sole reason companies conduct share repurchases, we can be sure that without buybacks, companies could not structure compensation so heavily with stock grants and options.\"","slug":"one-reason-firms-repurchase-shares-is-to-avoid-dilution-from-executive-stock-comp","title":"One reason firms repurchase shares is to avoid dilution from executive stock compensation programs.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245","lede":"

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

Executive compensation refers to the payments – both financial and otherwise – executives receive for their services. Executive compensation is generally a mix of salary, performance-based bonuses (which may be in cash, shares, or call options), and benefits.

\n\n

Since the 1980's, executive compensation in the US has soared relative to workers' wages. CEO-to-worker compensation increased frmo 20-to-1 in 1965 to 278-to-1 in 2018. From 1978 - 2018, CEO compensation increased by 940% while average worker wages grew only 11.9%.

\n","ledeExcerpt":"Executive compensation refers to the payments – both financial and otherwise – executives receive for their services. Executive compensation is generally a mix of salary, performance-based bonuses (which may be in cash, shares, or call options), and benefits.\n\nSince the 1980's, executive compensation in the US has soared relative to workers' wages. CEO-to-worker compensation increased from 20-to-1 in 1965 to 278-to-1 in 2018. From 1978 - 2018, CEO compensation increased by 940% while average worker wages grew only 11.9%.","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

\n","ledeExcerpt":"Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see \"workplace democracy\" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.","featured":null},{"slug":"labor-power","name":"Labor Power","id":"69609536","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121525617","lede":"\"Much of the American labor force spends time in \"private governments\" over which they have little say during and beyond the work day. Do Americans prefer to work for businesses that look more like democracies or autocracies? We study this question using conjoint experimental techniques on a nationally representative sample of Americans. This design allows us to vary a large number of features of the workplace--especially their governance structures and the degree to which these structures allow for meaningful democratic decision-making. We hypothesize that workers should have a preference for democratic corporate governance structures such as employee ownership, co-determination, and the direct election of management. We find strong support that Americans have a preference for workplace democratization and that the magnitude is economically significant. Overall, this article marshals new data and analyses to better understand public preferences over \"corporate regime type.\"","link":"https://osf.io/preprints/socarxiv/j9asz","slug":"what-do-americans-want-from-private-government","kind":"Academic Paper","title":"What Do Americans Want From (Private) Government?","year":"2020-01-01","researchers":[{"id":"121525615","location":"University of California, Berkeley","name":"Alan Yan","seoDescription":"","slug":"alan-yan"},{"id":"121525616","location":"Harvard University, Department of Government","name":" Soumyajit Mazumder","seoDescription":"","slug":"soumyajit-mazumder"}]}]},{"id":"121543421","lede":"\"First, a McCrary (2008) test of the density of incorporations around the reform cutoff suggests that firms did not manipulate incorporation dates, e.g., by delaying incorporation around the reform cutoff date or switching corporate forms. Second, we find no evidence for compositional shifts by industry or legal form in our analysis sample. Both pieces of evidence are consistent with survey evidence that incorporations were not deterred by one-third codetermination.\"","slug":"impending-one-third-codetermination-did-not-deter-german-incorporations-of-firms","title":"Impending one-third codetermination did not deter German incorporations of firms that would be impacted by the mandate.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562","lede":"

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Generally, "capital" is any durable, produced good that is being 'put to work' as an input in further production; capital is any productive asset engaged in the process of producing further value.

\n\n

Examples include a factory and its machinery, financial assets that accrue value, or intellectual property such as patents.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n","ledeExcerpt":"Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.","featured":null}],"sources":[{"id":"121543265","lede":"\"This paper examines the effect of the German co-determination law of 1976 (MitbestG) on the innovative activity of German firms. Co-determination applies to firms with 2000 employees or more. Data from 1971-1976 and 1981-1990 on 148 firms are used to compare the number of patents granted to co-determined firms before and after the introduction of the law. Several control variables are applied and in particular, in order to avoid a possible bias from specific effects of firm size, we compare the co-determined firms with others before and after 1976. The results do not support the view that co-determination slows down technological progress and reduces innovativeness.\"","link":"https://www.semanticscholar.org/paper/Co-Determination-and-Innovation-Kraft-Stank/6268eff97ade5369dd4a59c29812380dd1f51941?p2df","slug":"co-determination-and-innovation","kind":"Academic Paper","title":"Co-Determination and Innovation","year":"2011-01-01","researchers":[{"id":"121525654","location":"University of Essen, Germany","name":"Kornelius Kraft","seoDescription":"","slug":"kornelius-kraft"},{"id":"121543262","location":"","name":"Jörg Stank","seoDescription":"","slug":"jorg-stank"},{"id":"121543264","location":"","name":"R. Dewenter","seoDescription":"","slug":"r-dewenter"}]}]},{"id":"121543284","lede":"The commission “Mitbestimmung” also discusses this point and argues that the overwhelming majority of all decisions are unanimous.","slug":"the-overwhelming-majority-of-supervisory-board-decisions-under-codetermination-ar","title":"The “overwhelming majority” of supervisory board decisions under codetermination are unanimous.","showTitleAsQuote":false,"epistemicStatus":"anecdotal","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Institutional investors are entities that invest money on behalf of others. These include commercial and central banks, mutual funds, and endowments. The largest institutional investors (as of 2017) included BlackRock, Vanguard, State Street, and JP Morgan Asset Management.

\n","ledeExcerpt":"Institutional investors are entities that invest money on behalf of others. These include commercial and central banks, mutual funds, and endowments. The largest institutional investors (as of 2017) included BlackRock, Vanguard, State Street, and JP Morgan.","featured":null}],"sources":[{"id":"121542874","lede":"\"Fighting Short-Termism With Worker Power asks, “Can Germany’s co-determination system fix American corporate governance?” Prioritizing immediate increases in share price and payouts at the expense of long-term business investment and growth—a behavior we refer to as short-termism—has driven the inequality crisis in America and weakened our economy. By comparing the German stakeholder system of co-determination to corporate governance in the U.S., we find that emboldening workers with legitimate stakeholder power can help hold back the forces of short-termism.\"","link":"https://rooseveltinstitute.org/publications/fighting-short-termism-with-worker-power/","slug":"fighting-short-termism-with-worker-power-roosevelt-institute","kind":"Report","title":"Fighting Short-Termism with Worker Power","year":"2017-01-01","researchers":[{"id":"121542873","location":"Senior Editor and Researcher with the Institute for Local Self-Reliance’s Independent Business Initiative","name":"Susan Holmberg","seoDescription":"","slug":"susan-holmberg"}]}]},{"id":"121542907","lede":"\"In fact, there is strong evidence that companies with higher CEO pay compensate their board members more generously, a clear indication that board members are engaged in a corporate liaison with CEOs rather than serving as independent parties that can assess the appropriate award for a CEO’s performance. As Schwartz (2017) argues, because they are less invested as stakeholders, board members are less generous with their time than they are with doling out money to executives.\"","slug":"companies-with-higher-ceo-pay-compensate-their-boards-more-generously","title":"Companies with higher CEO pay compensate their boards more generously.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"executive-compensation","name":"Executive Compensation","id":"121525247","lede":"

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n\n

While the 2020 Biden administration is often suggested as marking the end of neoliberalism's singular hold over policymaking, the question remains: what comes next?

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Patient capital is an investment strategy with long time horizons, high risk-tolerance, and greater interest in customer needs than shareholder value. It is seen as a bridge for the gap between market-based investments that prioritize efficiency and scale, and philanthropy that prioritizes social impact.

\n","ledeExcerpt":"Patient capital is an investment strategy with long time horizons, high risk-tolerance, and greater interest in customer needs than shareholder value. It is seen as a bridge for the gap between market-based investments that prioritize efficiency and scale, and philanthropy that prioritizes social impact.","featured":null},{"slug":"short-termism","name":"Short-Termism","id":"118562815","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"\"Short-Termism\" is a term often used to critique an excessive focus on short-term results at the expense of long-term interests. For example, in corporate contexts, this can mean making decisions that maximize quarterly revenues at the expense of long-term firm interests or value-creation.","featured":null}],"sources":[{"id":"121542874","lede":"\"Fighting Short-Termism With Worker Power asks, “Can Germany’s co-determination system fix American corporate governance?” Prioritizing immediate increases in share price and payouts at the expense of long-term business investment and growth—a behavior we refer to as short-termism—has driven the inequality crisis in America and weakened our economy. By comparing the German stakeholder system of co-determination to corporate governance in the U.S., we find that emboldening workers with legitimate stakeholder power can help hold back the forces of short-termism.\"","link":"https://rooseveltinstitute.org/publications/fighting-short-termism-with-worker-power/","slug":"fighting-short-termism-with-worker-power-roosevelt-institute","kind":"Report","title":"Fighting Short-Termism with Worker Power","year":"2017-01-01","researchers":[{"id":"121542873","location":"Senior Editor and Researcher with the Institute for Local Self-Reliance’s Independent Business Initiative","name":"Susan Holmberg","seoDescription":"","slug":"susan-holmberg"}]}]},{"id":"121542882","lede":"\"By contrast, the Komission Mitbestimmung, tasked in 1998 with evaluating the worth of Germany’s co-determination system, concluded unanimously that co- determination promoted the “cooperative modernization” of Germany’s firms by deepening trust between management and labor and improving information flow (Silvia 2013).\"","slug":"a-1998-german-commission-unanimously-concluded-that-codetermination-deepened-trus","title":"A 1998 German commission unanimously concluded that codetermination deepened trust between management and labor, improving information flow.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"corporate-governance","name":"Corporate Governance","id":"69359562","lede":"

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n","ledeExcerpt":"Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.","featured":null},{"slug":"information-flow","name":"Information Flow","id":"95060907","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

\n\n

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n","ledeExcerpt":"Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.","featured":null}],"sources":[{"id":"69648528","lede":"Survey studies from 1998, 1996, and 1984 suggest that Swedish codetermination has been well received by managers and labor representatives alike.","link":"https://journals.sagepub.com/doi/abs/10.1177/0143831X00214003","slug":"codetermination-in-sweden-myth-and-reality","kind":"","title":"Codetermination in Sweden: Myth and Reality","year":"2000-01-01","researchers":[{"id":"69648527","location":"","name":"Klas Levinson","seoDescription":"","slug":"klas-levinson"}]}]},{"id":"121541007","lede":"19% reported \"very positive\", 42% reported \"quite positive\", and an additional 30% reported \"as much positive as negative. Sample size was 411 corporate directors.","slug":"61-of-swedish-corporate-directors-reported-positive-experiences-with-employee-boa","title":"61% of Swedish corporate directors reported positive experiences with employee board representation.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"industrial-relations","name":"Industrial Relations","id":"96360124","lede":"

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n\n

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n\n

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

\n","ledeExcerpt":"Corporate governance describes \"the processes, structures, and mechanisms that influence the control and direction of corporations\" (Greg Shailer, 2018).\n\n\"Control\" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while \"direction\" refers to the guidance and management of the corporation.","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"labor-power","name":"Labor Power","id":"69609536","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121540084","lede":"\"Many studies on the effect of codetermination at company-level reveal its significant influence on wage levels within companies. However, does this effect at the micro-level result in higher income equality at the macro-level as well? A cross-sectional regression analysis of data on EU and OECD countries will be used to test for the codetermination’s effect on income distribution. Assessing the impact of codetermination, a new index on codetermination strength will be introduced, combining the scope of codetermination rights with the threshold of codetermination laws. The results suggest a significant negative impact on the Gini index which indicates that codetermination rights lead to higher income equality.\"","link":"https://www.mzes.uni-mannheim.de/publications/wp/wp-147.pdf","slug":"the-macroeconomic-effect-of-codetermination-on-income-equality","kind":"Academic Paper","title":"The Macroeconomic Effect of Codetermination on Income Equality ","year":"2012-01-01","researchers":[{"id":"121540083","location":"Liason Professor, Friedrich Ebert Foundation","name":"Felix Hörsich","seoDescription":"","slug":"felix-horsich"}]}]},{"id":"121540498","lede":"\"Out of this, the previously stated hypothesis can be confirmed by the analysed sample of EU countries. This strongly supports Vitols (2005) results, which indicated a negative bivariate correlation between the existence of a compulsory codetermination system in the private sector and the level of the Gini index. Correspondingly, it is fair to conclude that states with codetermination inhabit a more equal distribution of incomes than states without employee representation in the board of companies in the private sector. This supports – on the macro-level – the results found on the micro-level by Gorton & Schmid (2002), stating that codetermination has an impact on the wage level in German companies.\"","slug":"higher-levels-of-codetermination-correlate-with-greater-national-equality","title":"Higher levels of codetermination correlate with greater national equality.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"inequality","name":"Inequality","id":"69359341","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

\n\n

Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.

\n","ledeExcerpt":"Industrial relations refers to the web of relationships between employers and employees, labor and trade unions, employer organizations, and the state.","featured":null}],"sources":[{"id":"121525696","lede":"\"Under the German corporate governance system of \"codetermination,\" employees are legally allocated some control rights over corporate assets, in the form of board seats. We empirically investigate the implications of equal board representation compared with one-third employee representation and find a 26% stock market discount on firms with equal representation. Employees redistribute the firm?s surplus towards themselves but may also prefer a different objective function for the firm, maximizing employee utility rather than shareholder value. We investigate the shareholder response to codetermination via higher leverage that commits more cash to leave the firm. We also examine the relationship between codetermination and the performance sensitivity of compensation for board members.\"","link":"https://research.stlouisfed.org/wp/more/2000-025","slug":"class-struggle-inside-the-firm-a-study-of-german-codetermination","kind":"Academic Paper","title":"Class Struggle Inside The Firm: A Study of German Codetermination","year":"2000-01-01","researchers":[{"id":"121260208","location":"University of Pennsylvania, NBER","name":"Gary Gorton","seoDescription":"","slug":"gary-gorton"},{"id":"121260209","location":"Federal Reserve Bank of St. Louis","name":"Frank A. Schmid","seoDescription":"","slug":"frank-a-schmid"}]}]},{"id":"121525695","lede":"Overall, 52% of likely 2018 voters supported codetermination, and 23% opposed.","slug":"codetermination-enjoys-majority-support-in-every-state-and-among-trump-voters-in","title":"Codetermination enjoys majority support in every state *and* among Trump voters in all but 4 states.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"political-barriers","name":"Political Barriers","id":"99764018","lede":"","ledeExcerpt":"","featured":null},{"slug":"public-opinion","name":"Public Opinion","id":"118561899","lede":"","ledeExcerpt":"","featured":true},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true}],"sources":[{"id":"121525670","lede":"Federal investment in housing: we asked respondents whether they would support a large scale investment in public housing. Forty-three percent of likely 2018 voters in support, 40 percent opposed.\n\nEmployee governance: we asked respondents if they would support establishing worker representation on companies’ board of directors (also known as “worker co-determination\"). Fifty-two percent of likely 2018 voters in support, 23 percent opposed.\n\nFamily leave: we asked respondents if they would support paid leave for medical issues or a childbirth. Fifty-one percent of likely 2018 voters in support, 34 percent opposed.\n\nStatehood: we asked respondents if they would support allowing DC, Puerto Rico and the US Virgin Islands to hold a binding referendum for statehood. Fifty-one percent of likely 2018 voters in support, 34 percent opposed.\n\nFree tuition: we asked respondents if they would support a policy granting free tuition to all students. Forty-six percent of likely 2018 voters in support, 40 percent opposed.","link":"https://www.dataforprogress.org/the-new-progressive-agenda-project?rq=employee%20governance","slug":"the-new-progressive-agenda","kind":"Report","title":"The New Progressive Agenda","year":null,"researchers":[]}]},{"id":"121525658","lede":"\"In Table 4 we consider a measure of accounting profitability, return on shareholders' equity. The COD coefficient was not significantly different from zero in 1975, but declined to -0.17 in 1983. This coefficient was significant at 5 per cent, and the change was also significant. Thus the loss of productivity appears to have reduced profits without affecting labour cost. Other interesting results here are the significantly negative effects of size (L) and capital intensity on ROE.\"","slug":"return-on-shareholder-s-equity-declined-between-1975-and-1983-for-large-german-co","title":"Return on shareholder's equity declined between 1975 and 1983 for large German codetermined firms.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n\n

While the 2020 Biden administration is often suggested as marking the end of neoliberalism's singular hold over policymaking, the question remains: what comes next?

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

\n","ledeExcerpt":"Corporate governance describes \"the processes, structures, and mechanisms that influence the control and direction of corporations\" (Greg Shailer, 2018).\n\n\"Control\" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while \"direction\" refers to the guidance and management of the corporation.","featured":null}],"sources":[{"id":"121525617","lede":"\"Much of the American labor force spends time in \"private governments\" over which they have little say during and beyond the work day. Do Americans prefer to work for businesses that look more like democracies or autocracies? We study this question using conjoint experimental techniques on a nationally representative sample of Americans. This design allows us to vary a large number of features of the workplace--especially their governance structures and the degree to which these structures allow for meaningful democratic decision-making. We hypothesize that workers should have a preference for democratic corporate governance structures such as employee ownership, co-determination, and the direct election of management. We find strong support that Americans have a preference for workplace democratization and that the magnitude is economically significant. Overall, this article marshals new data and analyses to better understand public preferences over \"corporate regime type.\"","link":"https://osf.io/preprints/socarxiv/j9asz","slug":"what-do-americans-want-from-private-government","kind":"Academic Paper","title":"What Do Americans Want From (Private) Government?","year":"2020-01-01","researchers":[{"id":"121525615","location":"University of California, Berkeley","name":"Alan Yan","seoDescription":"","slug":"alan-yan"},{"id":"121525616","location":"Harvard University, Department of Government","name":" Soumyajit Mazumder","seoDescription":"","slug":"soumyajit-mazumder"}]}]},{"id":"121525624","lede":"\"To provide a further sense of the economic magnitude, we directly benchmark our workplace democracy results with respect to salary offers. Because we also randomized salary offers in $10,000 increments, we are essentially able to generate a labor supply curve based on salary. Using these estimates (see Figure A1-3 and Table A1-2 for details), we estimate that co-determination, ESOPs, and management elections are approximately equivalent to a $70,000, $100,000, and $40,000 increase in salaries holding constant the implied utility that a respondent would get from working at a given hypothetical firm. This translates, on average, to approximately a $20/hour increase in wages. This is likely an upper bound on the wage growth that individuals might be willing to forego so we caution against over-interpreting these magnitudes. Future work, using field experimental methods, are likely better suited to test for the actual wages that individuals might give up for workplace democracy. Nevertheless, our results suggest that workplace democracy preferences are economically meaningful.\"","slug":"americans-value-economic-democracy-equivalently-to-a-wage-increase-of-20-hr","title":"Americans value economic democracy equivalently to a wage increase of $20/hr.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"job-satisfaction","name":"Job Satisfaction","id":"96360247","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

\n","ledeExcerpt":"Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see \"workplace democracy\" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.","featured":null}],"sources":[{"id":"121525617","lede":"\"Much of the American labor force spends time in \"private governments\" over which they have little say during and beyond the work day. Do Americans prefer to work for businesses that look more like democracies or autocracies? We study this question using conjoint experimental techniques on a nationally representative sample of Americans. This design allows us to vary a large number of features of the workplace--especially their governance structures and the degree to which these structures allow for meaningful democratic decision-making. We hypothesize that workers should have a preference for democratic corporate governance structures such as employee ownership, co-determination, and the direct election of management. We find strong support that Americans have a preference for workplace democratization and that the magnitude is economically significant. Overall, this article marshals new data and analyses to better understand public preferences over \"corporate regime type.\"","link":"https://osf.io/preprints/socarxiv/j9asz","slug":"what-do-americans-want-from-private-government","kind":"Academic Paper","title":"What Do Americans Want From (Private) Government?","year":"2020-01-01","researchers":[{"id":"121525615","location":"University of California, Berkeley","name":"Alan Yan","seoDescription":"","slug":"alan-yan"},{"id":"121525616","location":"Harvard University, Department of Government","name":" Soumyajit Mazumder","seoDescription":"","slug":"soumyajit-mazumder"}]}]},{"id":"121525620","lede":"\"We find little partisan polarization around workplace democracy: Despite the spillover of partisan polarization into many areas such as hiring (Iyengar and Westwood 2015), dating (Huber and Malhotra 2016), and perceptions of people (Ahler and Sood 2018; Mason 2018), we show that there is little evidence of partisan polarization around workplace democratization. We do find, however, some evidence that Republicans have a slight preference against co-determination despite recognizing that they would have more power in the workplace as a result of co-determination.\"","slug":"there-is-little-evidence-of-partisan-polarization-over-economic-democracy","title":"There is little evidence of partisan polarization over economic democracy.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"political-barriers","name":"Political Barriers","id":"99764018","lede":"","ledeExcerpt":"","featured":null},{"slug":"public-opinion","name":"Public Opinion","id":"118561899","lede":"","ledeExcerpt":"","featured":true},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"economic-democracy","name":"Economic Democracy","id":"69609474","lede":"

Since Alexis de Tocqueville's analysis of agrarian America in the 1800's, the ideals of liberty and equality have often been seen as in conflict.

\n\n

\n","ledeExcerpt":"Economic democracy, broadly, is the idea that decision-making power should not be the exclusive right of managers and shareholders, but held in equal by all stakeholders affected by those decisions. In practice, both Dahl & Schweickart see \"workplace democracy\" - from codetermination to worker-owned cooperatives - as one concrete manifestation of economic democracy.","featured":null}],"sources":[{"id":"121525617","lede":"\"Much of the American labor force spends time in \"private governments\" over which they have little say during and beyond the work day. Do Americans prefer to work for businesses that look more like democracies or autocracies? We study this question using conjoint experimental techniques on a nationally representative sample of Americans. This design allows us to vary a large number of features of the workplace--especially their governance structures and the degree to which these structures allow for meaningful democratic decision-making. We hypothesize that workers should have a preference for democratic corporate governance structures such as employee ownership, co-determination, and the direct election of management. We find strong support that Americans have a preference for workplace democratization and that the magnitude is economically significant. Overall, this article marshals new data and analyses to better understand public preferences over \"corporate regime type.\"","link":"https://osf.io/preprints/socarxiv/j9asz","slug":"what-do-americans-want-from-private-government","kind":"Academic Paper","title":"What Do Americans Want From (Private) Government?","year":"2020-01-01","researchers":[{"id":"121525615","location":"University of California, Berkeley","name":"Alan Yan","seoDescription":"","slug":"alan-yan"},{"id":"121525616","location":"Harvard University, Department of Government","name":" Soumyajit Mazumder","seoDescription":"","slug":"soumyajit-mazumder"}]}]},{"id":"121525618","lede":"\"In the left panel, we find that respondents in general prefer to work at more democratic workplaces to the private corporation. Relative to the baseline condition, co-determination raises the probability of preferring a given firm by 7 percentage points (CI95 = [4pp, 11pp]), ESOP raises the probability of preferring a given firm by 10 percent- age points (CI95 = [6pp, 14pp]), and management elections raises the probability of preferring a given firm by 5 percentage points (CI95 = [1pp, 8pp]).\"","slug":"codetermination-raised-the-probability-of-employees-preferring-to-work-at-a-firm","title":"Codetermination raised the probability of employees preferring to work at a firm by 7%; ESOP's by 10%.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"job-satisfaction","name":"Job Satisfaction","id":"96360247","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

To evaluate any policy in full, we must know the details of its implementation.

In general, efficiency refers to maximizing outputs while minimizing inputs.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

\n","ledeExcerpt":"Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.","featured":null}],"sources":[{"id":"121525243","lede":"\"We analyze private fixed investment in the U.S. over the past 30 years. We show that investment is weak relative to measures of profitability and valuation – particularly Tobin’s Q, and that this weakness starts in the early 2000’s. There are two broad categories of explanations: theories that predict low investment because of low Q, and theories that predict low investment despite high Q. We argue that the data does not support the first category, and we focus on the second one. We use industry-level and firm-level data to test whether under-investment relative to Q is driven by (i) financial frictions, (ii) measurement error (due to the rise of intangibles, globalization, etc), (iii) decreased competition (due to technology, regulation or common ownership), or (iv) tightened governance and/or increased short-termism. We do not find support for theories based on risk premia, financial constraints, or safe asset scarcity, and only weak support for regulatory constraints. Globalization and intangibles explain some of the trends at the industry level, but their explanatory power is quantitatively limited. On the other hand, we find fairly strong support for the competition and short-termism/governance hypotheses. Industries with more concentration and more common ownership invest less, even after controlling for current market conditions. Within each industry-year, the investment gap is driven by firms that are owned by quasi-indexers and located in industries with more concentration and more common ownership. These firms spend a disproportionate amount of free cash flows buying back their shares.\"","link":"https://www.nber.org/papers/w22897","slug":"investment-less-growth-an-empirical-investigation","kind":"Academic Paper","title":"Investment-Less Growth: An Empirical Investigation","year":"2016-01-01","researchers":[{"id":"121525241","location":"NYU Stern School of Business","name":"Germán Gutiérrez","seoDescription":"","slug":"german-gutierrez"},{"id":"121525242","location":"NYU, Research Associate","name":"Thomas Philippon","seoDescription":"","slug":"thomas-philippon"}]}]},{"id":"121525305","lede":"\"We then analyze investment patterns at the industry- and firm- level. At the industry level, we find that industries with more quasi-indexer institutional ownership and less competition (as measured by higher ‘traditional’ and common ownership-adjusted Herfindahls, as well as higher price-cost margins) invest less. These results are robust to controlling for firm demographics (age and size) as well as Q.\"","slug":"industries-with-more-quasi-indexer-institutional-ownership-and-less-competition-i","title":"Industries with more quasi-indexer institutional ownership and less competition invest less.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"competition","name":"Competition","id":"95853302","lede":"

Competition – where firms compete for the patronage of buyers – is the bedrock of a healthy economy. Competition keeps prices low and innovation high.

\n\n

The spectrum of competition runs from "perfect competition" on one end, to monopoly on the other. Perfect competition is a theoretical ideal wherein firms cannot affect the market prices of their products, firms can freely enter and exit markets, and buyers have complete information. In practice, we see variations of "imperfect competition", where buyers have bounded rationality, firms set their own prices, compete for market share, and contend with barriers to entry and exit.

\n","ledeExcerpt":"Competition – where firms compete for the patronage of buyers – is the bedrock of a healthy economy. Competition keeps prices low and innovation high. \n\nThe spectrum of competition runs from \"perfect competition\" on one end, to monopoly on the other. Perfect competition is a theoretical ideal wherein firms cannot affect the market prices of their products, firms can freely enter and exit markets, and buyers have complete information. In practice, we see variations of \"imperfect competition\", where buyers have bounded rationality, firms set their own prices, compete for market share, and contend with barriers to entry and exit.","featured":null},{"slug":"investment","name":"Investment","id":"121525298","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

\n","ledeExcerpt":"Institutional investors are entities that invest money on behalf of others. These include commercial and central banks, mutual funds, and endowments. The largest institutional investors (as of 2017) included BlackRock, Vanguard, State Street, and JP Morgan.","featured":null}],"sources":[{"id":"121525243","lede":"\"We analyze private fixed investment in the U.S. over the past 30 years. We show that investment is weak relative to measures of profitability and valuation – particularly Tobin’s Q, and that this weakness starts in the early 2000’s. There are two broad categories of explanations: theories that predict low investment because of low Q, and theories that predict low investment despite high Q. We argue that the data does not support the first category, and we focus on the second one. We use industry-level and firm-level data to test whether under-investment relative to Q is driven by (i) financial frictions, (ii) measurement error (due to the rise of intangibles, globalization, etc), (iii) decreased competition (due to technology, regulation or common ownership), or (iv) tightened governance and/or increased short-termism. We do not find support for theories based on risk premia, financial constraints, or safe asset scarcity, and only weak support for regulatory constraints. Globalization and intangibles explain some of the trends at the industry level, but their explanatory power is quantitatively limited. On the other hand, we find fairly strong support for the competition and short-termism/governance hypotheses. Industries with more concentration and more common ownership invest less, even after controlling for current market conditions. Within each industry-year, the investment gap is driven by firms that are owned by quasi-indexers and located in industries with more concentration and more common ownership. These firms spend a disproportionate amount of free cash flows buying back their shares.\"","link":"https://www.nber.org/papers/w22897","slug":"investment-less-growth-an-empirical-investigation","kind":"Academic Paper","title":"Investment-Less Growth: An Empirical Investigation","year":"2016-01-01","researchers":[{"id":"121525241","location":"NYU Stern School of Business","name":"Germán Gutiérrez","seoDescription":"","slug":"german-gutierrez"},{"id":"121525242","location":"NYU, Research Associate","name":"Thomas Philippon","seoDescription":"","slug":"thomas-philippon"}]}]},{"id":"121525299","lede":"The authors find that private fixed investment in the U.S. over the past 30 years has been low, and find empirical support for the hypothesis that the under-investment is driven by short-termism and tightened governance. In particular, industries with more institutional investor ownership invest less.","slug":"share-buybacks-began-increasing-soon-after-1982-when-sec-rule-10b-18-allowed-comp","title":"Share buybacks began increasing soon after 1982, when SEC rule 10b-18 allowed companies to repurchase shares on the open market without regulatory limits.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"stock-buybacks","name":"Stock Buybacks","id":"121525245","lede":"

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Stock buybacks are the practice of repurchasing company shares on the open market, reducing the outstanding number of shares, thereby increasing share price.

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

While the 2020 Biden administration is often suggested as marking the end of neoliberalism's singular hold over policymaking, the question remains: what comes next?

\n","ledeExcerpt":"Neoliberalism is a school of thought that began taking shape with the formation of The Mont Pelerin Society in the 1940's. It rose to power in the US in the 1980's, with tenets including: free trade benefits all; the government's role in the economy should remain confined to addressing market failures rather than pursuing proactive industrial policy; social benefits should be tied to work requirements; public services should be privatized; industry and finance should be maximally deregulated; stock market prices are accurate signals of all relevant information; deficits invariably lead to inflation; the primary role of indepenedent central banks is to fight inflation; and that taxes invariably discourage work, entrepreneurship, and growth.\n\nWhile the 2020 Biden administration is often suggested as marking the end of neoliberalism's singular hold over policymaking, the question remains: what comes next?","featured":null}],"sources":[{"id":"121525243","lede":"\"We analyze private fixed investment in the U.S. over the past 30 years. We show that investment is weak relative to measures of profitability and valuation – particularly Tobin’s Q, and that this weakness starts in the early 2000’s. There are two broad categories of explanations: theories that predict low investment because of low Q, and theories that predict low investment despite high Q. We argue that the data does not support the first category, and we focus on the second one. We use industry-level and firm-level data to test whether under-investment relative to Q is driven by (i) financial frictions, (ii) measurement error (due to the rise of intangibles, globalization, etc), (iii) decreased competition (due to technology, regulation or common ownership), or (iv) tightened governance and/or increased short-termism. We do not find support for theories based on risk premia, financial constraints, or safe asset scarcity, and only weak support for regulatory constraints. Globalization and intangibles explain some of the trends at the industry level, but their explanatory power is quantitatively limited. On the other hand, we find fairly strong support for the competition and short-termism/governance hypotheses. Industries with more concentration and more common ownership invest less, even after controlling for current market conditions. Within each industry-year, the investment gap is driven by firms that are owned by quasi-indexers and located in industries with more concentration and more common ownership. These firms spend a disproportionate amount of free cash flows buying back their shares.\"","link":"https://www.nber.org/papers/w22897","slug":"investment-less-growth-an-empirical-investigation","kind":"Academic Paper","title":"Investment-Less Growth: An Empirical Investigation","year":"2016-01-01","researchers":[{"id":"121525241","location":"NYU Stern School of Business","name":"Germán Gutiérrez","seoDescription":"","slug":"german-gutierrez"},{"id":"121525242","location":"NYU, Research Associate","name":"Thomas Philippon","seoDescription":"","slug":"thomas-philippon"}]}]},{"id":"121525196","lede":"\"More importantly, the authors find a substantial negative marginal effect of below average participation on job satisfaction (close to three times the magnitude of the next largest marginal effect estimated in the model), indicating how crucial it is for employers to actively pursue programmes that enhance PDM.\"","slug":"below-average-job-participation-has-a-substantial-negative-marginal-effect-on-job","title":"Below average job participation has a substantial negative marginal effect on job satisfaction.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"69359365","title":"Codetermination","slug":"codetermination"}],"tags":[{"slug":"job-satisfaction","name":"Job Satisfaction","id":"96360247","lede":"","ledeExcerpt":"","featured":null},{"slug":"stability","name":"Stability","id":"23916385","lede":"

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Corporate governance describes "the processes, structures, and mechanisms that influence the control and direction of corporations" (Greg Shailer, 2018).

\n\n

"Control" refers to how stakeholders and other external groups influence those who are responsible for decision-making, while "direction" refers to the guidance and management of the corporation.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n","ledeExcerpt":"Public policies that require significant revenue often meet an important question: \"how will you pay for that?\" Pay-fors are potential sources of funding.\n\nWhile it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.","featured":null}],"sources":[{"id":"99763896","lede":"JFI, a research organization dedicated to studying guaranteed income, released this position paper, in which they outline their current view regarding next steps for implementing a guaranteed income. They write: \"universal, unconditional cash assistance program will help combat poverty, improve material well being and, in so doing, help alleviate the profound economic insecurity afflicting communities of color in America. With such a program now in the realm of feasibility, we believe the urgent work ahead is, in short, getting it right.\"","link":"https://www.jainfamilyinstitute.org/assets/jfi-gi-position-paper-august-2021.pdf","slug":"jain-family-institute-position-on-guaranteed-income","kind":"Report","title":"Jain Family Institute Position on Guaranteed Income","year":"2021-01-01","researchers":[]}]},{"id":"121524291","lede":"Over the next 10 years, the present tax gap represents roughly $7 trillion dollars of uncollected tax revenue. The majority of uncollected revenue stems from those with top incomes. The primary cause of the tax gap is identified as an under-staffed IRS with outdated technology, leaving them unable to collect 15% of taxes owed. The author estimates that an extra $80 billion in IRS funding could generate an extra $320 billion over the next decade. Allowing the IRS to use information from financial institutions - at no cost to taxpayers - is estimated to raise an extra $460 billion over the next decade.","slug":"in-2021-the-u-s-tax-gap-difference-between-taxes-owed-and-collected-totals-around","title":"In 2021, the U.S. \"tax gap\" (difference between taxes owed and collected) totals around $600 billion, annually. The vast majority (roughly 65%) of dodged taxes are accounted for by the top 10% of the income distribution.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"pay-fors","name":"Pay-Fors","id":"99763897","lede":"

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n","ledeExcerpt":"Public policies that require significant revenue often meet an important question: \"how will you pay for that?\" Pay-fors are potential sources of funding.\n\nWhile it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.","featured":null},{"slug":"taxes","name":"Taxes","id":"49378929","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"inequality","name":"Inequality","id":"69359341","lede":"","ledeExcerpt":"","featured":null}],"sources":[{"id":"121524290","lede":"\"A well-functioning tax system requires that everyone pays the taxes they owe. Today, the “tax gap”—the difference between taxes that are owed and collected—totals around $600 billion annually and will mean approximately $7 trillion of lost tax revenue over the next decade. The sheer magnitude of lost revenue is striking: it is equal to 3 percent of GDP, or all the income taxes paid by the lowest earning 90 percent of taxpayers.\"","link":"https://home.treasury.gov/news/featured-stories/the-case-for-a-robust-attack-on-the-tax-gap","slug":"the-case-for-a-robust-attack-on-the-tax-gap","kind":"Article","title":"The Case for a Robust Attack on the Tax Gap","year":"2021-01-01","researchers":[{"id":"121524289","location":"Deputy Assistant Secretary for Economic Policy","name":"Natasha Sarin","seoDescription":"","slug":"natasha-sarin"}]}]},{"id":"121524273","lede":"Paying out a UBI equal to the VAT rate times twice the poverty line (roughly $2,500 per person), the VAT would still raise an additional $247 billion per year. If the UBI were cut in half, the VAT would generate an additional $545 billion per year.","slug":"a-10-value-added-tax-in-2020-is-estimated-to-have-potentially-raised-842-billion","title":"A 10% value-added tax in 2020 is estimated to have potentially raised $842 billion, rising to an average of $1 trillion in annual revenue over the following decade.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

A VAT is a consumption tax on goods and services that gets applied at each stage of the supply chain where value is added. VAT raises nearly a fifth of all tax revenue worldwide. As of 2018, 166 of 193 countries with full UN membership have a VAT, including all OECD members except the United States. In the US, many states use a sales tax system instead.

\n","ledeExcerpt":"A VAT is a consumption tax on goods and services that gets applied at each stage of the supply chain where value is added. VAT raises nearly a fifth of all tax revenue worldwide. As of 2018, 166 of 193 countries with full UN membership have a VAT, including all OECD members except the United States. In the US, many states use a sales tax system instead.","featured":null},{"slug":"taxes","name":"Taxes","id":"49378929","lede":"","ledeExcerpt":"","featured":null},{"slug":"program-costs","name":"Program Costs","id":"101097300","lede":"","ledeExcerpt":"","featured":null},{"slug":"implementation","name":"Implementation","id":"69609492","lede":"","ledeExcerpt":"","featured":true},{"slug":"pay-fors","name":"Pay-Fors","id":"99763897","lede":"

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

\n","ledeExcerpt":"Negative Income Tax (NIT) is a form of basic income that phases out as recipient earned income rises. NIT is composed of an \"income floor\" and a \"phaseout rate\". The income floor is the amount of cash a recipient with $0 of earned income receives. The phaseout rate is how much the cash benefit is decreased per additional dollar of earned income.\n\nFor example, consider an NIT with an income floor of $13,000 and a phaseout rate of 50%. A citizen with no income would receive $13,000 per year, often broken up into monthly payments. If the citizen gets a part-time job and begins earning $20,000 per year, they would still receive $3,000 per year in NIT benefits.","featured":null}],"sources":[{"id":"101097294","lede":"Compares the costs of a negative income tax designed to mimic the distributional effects of a universal basic income, set at a level sufficient to eliminate poverty in the US. Author estimates the NIT would cost $826 billion in 2002, compared with $1.69 trillion for an equivalent UBI.","link":"https://njfac.org/wp-content/uploads/2018/05/The-Relative-Cost-of-a-UBI-and-NIT-2006-1.pdf","slug":"the-relative-costs-of-a-ubi-and-a-nit","kind":"Academic Paper","title":"The Relative Costs of a UBI and a NIT","year":"2006-01-01","researchers":[{"id":"101097292","location":"Rutgers University","name":"Philip Harvey","seoDescription":"","slug":"philip-harvey"}]}]},{"id":"121523577","lede":"This program would eliminate poverty, and payments would phaseout entirely by 200% of the poverty line. Reducing the phaseout rate to 33% would have the payments phaseout by 303% of poverty, and raise the cost to $336 billion.","slug":"a-nit-set-at-100-of-the-poverty-line-with-a-50-phaseout-rate-would-ve-cost-219-bi","title":"A NIT set at 100% of the poverty line with a 50% phaseout rate would've cost $219 billion in 2004 (using 2007) dollars.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"negative-income-tax","name":"Negative Income Tax (NIT)","id":"23932842","lede":"

\n\n

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null}],"sources":[{"id":"121523568","lede":"","link":"https://taxfoundation.org/andrew-yang-value-added-tax-universal-basic-income/","slug":"does-andrew-yang-s-freedom-dividend-proposal-add-up","kind":"Article","title":"Does Andrew Yang’s “Freedom Dividend” Proposal Add Up?","year":"2019-01-01","researchers":[{"id":"121523567","location":"American Enterprise Institute, Research Fellow","name":"Kyle Pomerleau","seoDescription":"","slug":"kyle-pomerleau"}]}]},{"id":"121520908","lede":"\"This implies that were we to eliminate current income support programs and apply the funds towards a pure UBI, there would be a relative redistribution from low-earners to zero earners, but the first-order effects would be a massive distribution up the earnings distribution, along with a redistribution from the elderly and disabled towards those who are neither, primarily but not exclusively those without children.\"","slug":"a-pure-ubi-that-entirely-replaces-welfare-would-distribute-earnings-upwards","title":"A \"pure\" UBI (that entirely replaces welfare) would distribute earnings upwards.","showTitleAsQuote":false,"epistemicStatus":"empirical","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"poverty","name":"Poverty","id":"100414757","lede":"

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null}],"sources":[{"id":"118562618","lede":"\"We discuss the potential role of Universal Basic Incomes (UBIs) in advanced countries. A feature of advanced economies that distinguishes them from developing countries is the existence of well developed, if often incomplete, safety nets. We develop a framework for describing transfer programs, flexible enough to encompass most existing programs as well as UBIs, and use this framework to compare various UBIs to the existing constellation of programs in the United States. A UBI would direct much larger shares of transfers to childless, non-elderly, non-disabled households than existing programs, and much more to middle-income rather than poor households. A UBI large enough to increase transfers to low-income families would be enormously expensive. We review the labor supply literature for evidence on the likely impacts of a UBI. We argue that the ongoing UBI pilot studies will do little to resolve the major outstanding questions.\"","link":"https://www.nber.org/papers/w25538","slug":"ubi-in-the-us-and-advanced-countries","kind":"Academic Paper","title":"UBI in the US and Advanced Countries","year":"2019-01-01","researchers":[{"id":"118562565","location":"Research Associate at University of California, Berkeley","name":"Hilary W. Hoynes","seoDescription":"","slug":"hilary-w-hoynes"},{"id":"118562605","location":"Research Associate at University of California, Berkeley","name":"Jesse Rothstein","seoDescription":"","slug":"jesse-rothstein"}]}]},{"id":"121520906","lede":"“As figure B1 shows, the overall impact of each of these schemes is progressive in that those in the bottom decile enjoy a substantial increase in average income while those in the top decile experience a fall in average income. On the other hand, under schemes 1 and 2 those in the middle deciles (4 to 8) do better than those in deciles 2 and 3. As a result, middle-income groups are significant gainers from such a scheme and do better than those in deciles 2 and 3. This is because any additional withdrawals in taxation from their income are likely to be lower than the loss of benefits in the present system. As a result, such a move would improve the incentive to work and possibly raise public support for such a scheme.”","slug":"in-the-uk-a-ubi-that-replaces-all-other-means-tested-benefits-would-benefit-the-m","title":"In the UK, a UBI that replaces all other means-tested benefits would benefit the middle-class more than lower-income groups.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"poverty","name":"Poverty","id":"100414757","lede":"

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

The Alaska Permanent Fund (APF) is a publicly managed investment portfolio funded via a 25% tax on oil revenues. Every Alaskan citizen is an equal shareholder in the returns, and since its inception in the early 1980's, every citizen has received an annual payment – a Permament Fund Dividend (PFD) – generally between $1,000 and $2,000.

\n","ledeExcerpt":"The Alaska Permanent Fund (APF) is a publicly managed investment portfolio funded via a 25% tax on oil revenues. Every Alaskan citizen is an equal shareholder in the returns, and since its inception in the early 1980's, every citizen has received an annual payment generally between $1,000 and $2,000.","featured":null}],"sources":[{"id":"116532574","lede":"The main focus of this paper is to empirically examine the effect of the Permanent Fund Dividend (PFD) payouts on Alaska's income inequality by taking into account the roles of income and population. To that end, an autoregressive distributed lag (ARDL) approach to cointegration and the Johansen cointegration approach are applied to annual time series data from 1963 to 2012. We find that the PFD payouts tend to worsen income inequality in Alaska in both the short- and long-run. We also provide evidence to support the existence of Kuznets' hypothesis for Alaska – growth deteriorates income inequality initially and improves it later. Finally, population is found to reduce Alaska's income inequality in the short- and long-run.","link":"https://www.researchgate.net/publication/316712983_Can_an_Oil-Rich_Economy_Reduce_its_Income_Inequality_Empirical_Evidence_from_Alaska's_Permanent_Fund_Dividend","slug":"can-an-oil-rich-economy-reduce-its-income-inequality-empirical-evidence-from-alas","kind":"Academic Paper","title":"Can an Oil-Rich Economy Reduce its Income Inequality? Empirical Evidence from Alaska's Permanent Fund Dividend","year":"2017-01-01","researchers":[{"id":"116532572","location":"","name":"Kate Kozminski","seoDescription":"","slug":"kate-kozminski"},{"id":"116532573","location":"University of Alaska, Fairbanks","name":"Jungho Baek","seoDescription":"","slug":"jungho-baek"}]}]},{"id":"121520895","lede":"This represents a 4% drop from the previous year, when 78% were dissatisfied. The poll was run between January 4th and 15th, 2021.","slug":"in-2021-82-of-americans-were-dissatisfied-with-the-nation-s-efforts-to-deal-with","title":"In 2021, 82% of Americans were dissatisfied with the nation's efforts to deal with poverty and homelessness.","showTitleAsQuote":false,"epistemicStatus":"fact","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"poverty","name":"Poverty","id":"100414757","lede":"

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Inflation is the rise in price level of a nation's currency, which corresponds to a decrease in purchasing power.

Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.

\n","ledeExcerpt":"Universal Basic Income is an unconditional, individual, periodic, cash payment granted to all citizens regardless of income or employment status.","featured":null},{"slug":"urban-development","name":"Urban Development","id":"99017961","lede":"","ledeExcerpt":"","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n\n

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n\n

Despite consistent reductions in global poverty over the decades, even centuries, there remains a stubborn relationship between progress and the persistence of poverty.

\n\n

In 2021, the poverty line for an individual was in income of $12,880 per year. The threshold rises to $17,420 for a two-person household, $21,960 for three, and $26,500 for four.

\n\n

In 2019, the U.S. poverty rate was 10.5% (34 million Americans), down from 11.8% in 2018.

\n\n

Neoclassically-informed economic models — which held sway over policymaking for at least the last 50 years — operate on the assumption that raising taxes discourages work.

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

To evaluate any policy in full, we must know the details of its implementation.

\n\n

The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Public policies that require significant revenue often meet an important question: "how will you pay for that?" Pay-fors are potential sources of funding.

\n\n

While it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.

\n","ledeExcerpt":"Public policies that require significant revenue often meet an important question: \"how will you pay for that?\" Pay-fors are potential sources of funding.\n\nWhile it should be noted that tax revenue does not actually fund government spending, pay-fors are important to manage inflation by offsetting government spending.","featured":null}],"sources":[{"id":"121520262","lede":"Converting the current Child Tax Credit to a child allowance—by making it fully refundable, increasing its value to $3,600 per child age 0-5, $3,000 per child age 6-17, and distributing it monthly—would cost about $100 billion and would generate about $800 billion in benefits to society.","link":"https://static1.squarespace.com/static/5743308460b5e922a25a6dc7/t/602ec9c7ddddd01cd29430e1/1613679049611/Child-Allowance-CBA-brief-CPSP-2021.pdf","slug":"the-costs-and-benefits-of-a-child-allowance","kind":"Report","title":"The Costs and Benefits of a Child Allowance","year":"2021-01-01","researchers":[{"id":"113523690","location":"Columbia University","name":"Irwin Garfinkel","seoDescription":"","slug":"irwin-garfinkel"},{"id":"99763880","location":"","name":"Elizabeth Ananat","seoDescription":"","slug":"elizabeth-ananat"},{"id":"101097179","location":"Columbia University","name":"Sophie Collyer","seoDescription":"","slug":"sophie-collyer"},{"id":"101097178","location":"Columbia University","name":"Christopher Wimer","seoDescription":"","slug":"christopher-wimer"},{"id":"121520250","location":"","name":"Laurel Sariscsany","seoDescription":"","slug":"laurel-sariscsany"}]},{"id":"99763863","lede":"Summarizing research from the Center on Poverty and Social Policy at Columbia University, David Koggan delves into the headline finding: that the benefits created by a child allowance could be worth eight times the annual program cost.","link":"https://www.niskanencenter.org/a-child-allowance-could-be-worth-eight-times-the-costs/","slug":"a-child-allowance-could-be-worth-eight-times-the-cost","kind":"Report","title":"A Child Allowance Could be Worth Eight Times the Cost","year":"2021-01-01","researchers":[{"id":"99763862","location":"","name":"David Koggan","seoDescription":"","slug":"david-koggan"}]}]},{"id":"23933760","lede":"Marginal propensity to consume is 10 times larger for low income households than wealthy households.","slug":"marginal-propensity-to-consume","title":"Marginal propensity to consume is 10 times larger for low income households than wealthy households.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[{"id":"19519421","title":"Basic Income","slug":"basic-income"}],"tags":[{"slug":"consumption","name":"Consumption","id":"23933659","lede":"

In economics, consumption is the use of resources to satisfy current needs and wants. This is in contrast to spending resources for future income, known as investing.

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n