The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include tax day, inequality, and the safety net.
Tax Day
There were lots of interesting tax-related articles this week in honor of the most important tax day of the year. One tax-time topic in particular received much attention: the apparently unnecessary hassle of preparing taxes in the first place. Ezra Klein gave the truth about preparing tax returns: “For most taxpayers it's a waste of money — and time.” To replace the system, there appears to be a sensible, tested solution: let the IRS complete the forms for you through what is called return-free filing. Doing so “could save taxpayers about 225 million hours and $2 billion in tax preparation fees every single year.” ProPublica reported that tax prep giant Intuit has engaged in some unsavory lobbying tactics to oppose tax-form automation, leading to some heated headlines in Slate, National Journal, Yahoo! and other outlets. Writing at Tax Analysts, Jeremy Scott argued that the entire Free File Alliance, the current public-private partnership providing free federal e-filing to low-income filers, should be discarded. Even beyond being a waste of time and money, as these writers argue, the way Americans file taxes puts them at risk of fraud. Timothy B. Lee for Vox showed “How America's Broken Tax System Makes Identity Theft Easy.”
Putting aside the inconveniences and perils of the tax-filing process for a moment, Krista Comer in a guest post on our blog described one upside to tax filing: the possibility for “outsized impacts” by embracing behavioral economics at tax time.
Catherine Rampell explained in the Washington Post how the “‘marriage penalty’ takes a bite out of working families.” One example she gives is of a two-parent family with a stay-at-home mom. “If she takes on a $25,000 job, the family would lose the entirety of their earned-income tax credit — about $5,000 — and pay an additional $6,000 in payroll and federal income taxes.” Suzy Khimm for MSNBC described “yet another cost of long-term unemployment”: facing large tax bills at tax-time after having no taxes withheld from unemployment benefits. Normal income taxes are due on any federal unemployment benefits that households receive, but there is no automatic withholding of taxes. Many unemployed Americans are confronted with large tax bills that they can’t pay since their only source of income is the unemployment benefits.
Once Americans pay taxes, the next question many have is where the money goes. Derek Thompson for The Atlantic gave “a brief history of where your money goes and why” by offering a number of compelling and “not-entirely-depressing” charts.
Inequality
Thomas Piketty participated in two events on tax day to discuss his new book on inequality and capital. One was at the Economic Policy Institute and the other at the Tax Policy Center. Joann Weiner summarized his arguments at the EPI event for the Washington Post. In short: “How bad is income inequality in the United States? Pretty bad.”
Thomas Frank showed how inequality is manifested in the very structure of our houses, particularly McMansions. “Inequality is, obviously, the point of the McMansion,” he averred.
Anat Shenker-Osorio argued this week in Salon that inequality is unlikely to be resolved until we learn to talk about it effectively. “Without a sense that there’s something fundamentally wrong and it effects every one of us,” she writes, “it’s hard to get people to listen, let alone act. We ought to pair talk about equity with a bit more about equilibrium.” “Language like ‘destabilized’ as well as ‘off kilter,’ ‘out of whack,’ and so on is a more effective way to frame the problem.”
The Safety Net
After Missouri legislators considered a bill last week to lift the lifetime ban on receiving SNAP benefits for drug felons, the St. Louis Post-DispatchEditorial Board urged lawmakers this week to go through with the measure. The board makes the case this way: “Not having enough to eat might very well send [ex-offenders] back to the drug trade.” To put a human face on the debates over SNAP funding and eligibility, Washington Post photographer Michael S. Williamson captured “the faces behind America’s food stamp program” in a photo essay.
Responding to concerns about the financial insecurity of women in retirement, Carolyn Colvin, the acting commissioner of the Social Security Administration, spoke with Morning Edition’s Kelly McEvers about women and savings.
Quick Hits
Ann Carrns in the New York Times described the ongoing tactics of banks to maximize overdraft fees. “Customers can lose when banks shuffle overdraft payments” from high to low.
Mary Wisniewski asked in American Banker, “Are ATMs the right channel for serving the underbanked?” She reported that “the ATM Industry Association is brainstorming ways the machines can be better used to help reach unbanked and underbanked consumers.”
Ron Lieber ran down the current options for finding “financial advice for people who aren’t rich” through online money-management firms.
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Tax Day
There were lots of interesting tax-related articles this week in honor of the most important tax day of the year. One tax-time topic in particular received much attention: the apparently unnecessary hassle of preparing taxes in the first place. Ezra Klein gave the truth about preparing tax returns: “For most taxpayers it's a waste of money — and time.” To replace the system, there appears to be a sensible, tested solution: let the IRS complete the forms for you through what is called return-free filing. Doing so “could save taxpayers about 225 million hours and $2 billion in tax preparation fees every single year.” ProPublica reported that tax prep giant Intuit has engaged in some unsavory lobbying tactics to oppose tax-form automation, leading to some heated headlines in Slate, National Journal, Yahoo! and other outlets. Writing at Tax Analysts, Jeremy Scott argued that the entire Free File Alliance, the current public-private partnership providing free federal e-filing to low-income filers, should be discarded. Even beyond being a waste of time and money, as these writers argue, the way Americans file taxes puts them at risk of fraud. Timothy B. Lee for Vox showed “How America's Broken Tax System Makes Identity Theft Easy.”
Putting aside the inconveniences and perils of the tax-filing process for a moment, Krista Comer in a guest post on our blog described one upside to tax filing: the possibility for “outsized impacts” by embracing behavioral economics at tax time.
Catherine Rampell explained in the Washington Post how the “‘marriage penalty’ takes a bite out of working families.” One example she gives is of a two-parent family with a stay-at-home mom. “If she takes on a $25,000 job, the family would lose the entirety of their earned-income tax credit — about $5,000 — and pay an additional $6,000 in payroll and federal income taxes.” Suzy Khimm for MSNBC described “yet another cost of long-term unemployment”: facing large tax bills at tax-time after having no taxes withheld from unemployment benefits. Normal income taxes are due on any federal unemployment benefits that households receive, but there is no automatic withholding of taxes. Many unemployed Americans are confronted with large tax bills that they can’t pay since their only source of income is the unemployment benefits.
Once Americans pay taxes, the next question many have is where the money goes. Derek Thompson for The Atlantic gave “a brief history of where your money goes and why” by offering a number of compelling and “not-entirely-depressing” charts.
Inequality
Thomas Piketty participated in two events on tax day to discuss his new book on inequality and capital. One was at the Economic Policy Institute and the other at the Tax Policy Center. Joann Weiner summarized his arguments at the EPI event for the Washington Post. In short: “How bad is income inequality in the United States? Pretty bad.”
Thomas Frank showed how inequality is manifested in the very structure of our houses, particularly McMansions. “Inequality is, obviously, the point of the McMansion,” he averred.
Anat Shenker-Osorio argued this week in Salon that inequality is unlikely to be resolved until we learn to talk about it effectively. “Without a sense that there’s something fundamentally wrong and it effects every one of us,” she writes, “it’s hard to get people to listen, let alone act. We ought to pair talk about equity with a bit more about equilibrium.” “Language like ‘destabilized’ as well as ‘off kilter,’ ‘out of whack,’ and so on is a more effective way to frame the problem.”
The Safety Net
After Missouri legislators considered a bill last week to lift the lifetime ban on receiving SNAP benefits for drug felons, the St. Louis Post-DispatchEditorial Board urged lawmakers this week to go through with the measure. The board makes the case this way: “Not having enough to eat might very well send [ex-offenders] back to the drug trade.” To put a human face on the debates over SNAP funding and eligibility, Washington Post photographer Michael S. Williamson captured “the faces behind America’s food stamp program” in a photo essay.
Responding to concerns about the financial insecurity of women in retirement, Carolyn Colvin, the acting commissioner of the Social Security Administration, spoke with Morning Edition’s Kelly McEvers about women and savings.
Quick Hits
Ann Carrns in the New York Times described the ongoing tactics of banks to maximize overdraft fees. “Customers can lose when banks shuffle overdraft payments” from high to low.
Mary Wisniewski asked in American Banker, “Are ATMs the right channel for serving the underbanked?” She reported that “the ATM Industry Association is brainstorming ways the machines can be better used to help reach unbanked and underbanked consumers.”
Ron Lieber ran down the current options for finding “financial advice for people who aren’t rich” through online money-management firms.
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