Tag Archives: economic-policy

The tax bill for many big polluters last year: $0

Adapting to our warming world is expensive. It costs a lot to build sea walls, cure disease outbreaks, and rebuild after floods. It takes money to invent better batteries, turn farms into carbon sinks, and replace polluting power plants with clean energy.

Instead of maybe taxing carbon emissions to pay for all this, the United States is giving tax breaks to the giant corporations profiting from fossil fuels. Several of the biggest of them paid no taxes last year, according to a new report from the Institute on Taxation and Economic Policy, or ITEP, a nonpartisan think tank. It’s the first look at the effect of the 2017 Trump tax cuts, which slashed the corporate tax rate from 35 percent to 21 percent. Companies are still finding ways to avoid paying anything.

Last year, for instance, Chevron made $4.5 billion in profits. If it had paid the (newly reduced) corporate tax rate of 21 percent, it would have coughed up $955 million in taxes. That’s enough money to triple funding for ARPA-E, the U.S. energy research and development program that pays for moonshot inventions like wind-turbines on kites. Instead, Uncle Sam handed Chevron $181 million at tax time.

Power utilities and oil and gas companies account for 22 of the 60 biggest companies that paid no taxes last year, according to ITEP’s study. Some of the well-known names on the list include Kinder Morgan, Occidental Petroleum, and Halliburton. The think tank didn’t crunch the most recent numbers for every company, just the biggest ones, but if you go back a few years, ITEP calculated that oil and gas companies avoided paying $27 billion in taxes from 2008 through 2015, while power utilities evaded $86 billion.

To be sure, there’s often a good reason for a tax break. Politicians use them to help get new industries — like the renewable energy industry — up on their feet. Duke Energy, for instance, got a tax credit of $129 million for renewable energy production in 2018. Economists call such credits and exemptions “tax expenditures.” It’s like the government is spending money because these tax breaks leave a hole in the federal budget.

The problem is that many of these subsidies outlive their usefulness.

“Unlike ARPA-E, which has to rationalize its existence and budget every year, these tax expenditures — and they are expenditures — just stay there even if they are no longer relevant,” said Matt Gardner, senior fellow at ITEP. “Are these tax breaks still useful? We want to be in a position where lawmakers are asking if they still make sense every year.”

And about ARPA-E’s budget. In the ten years of its existence, the program has yielded 1,500 inventions (of things like high-energy iron slurry batteries and clothes that automatically warm you up when it gets cold) and over 50 new companies. Nonpartisan groups say ARPA-E provides a good return on investment, and Republicans and Democrats come together to pay for it every year. But the Trump administration wants to cut its budget to zero.

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The tax bill for many big polluters last year: $0

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Unemployment Among Young High School Grads Is…Pretty Much Normal These Days

Mother Jones

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From the New York Times today on the grim job prospects of high school grads with no college:

Only 10 percent of 17- to 24-year-olds have a college or advanced degree, according to a new study by the Economic Policy Institute, although many more of them will eventually graduate.

And for young high school graduates, the unemployment rate is disturbingly high: 17.8 percent….“It’s improved since the recession, but it’s still pretty poor,” said Elise Gould, a senior economist at the Economic Policy Institute, who noted the average hourly wage for high school graduates had declined since 2000 despite increases in the minimum wage in some places.

Ms. Gould is part of a growing chorus of economists, employers and educators who argue more effort needs to be put into improving job prospects for people without college degrees.

Is it unreasonable to expect reporters to hop over to FRED for five minutes and check this stuff out? I don’t know how EPI measures unemployment, but the federal government measures it in a consistent way every single month. For young high school grads, the average unemployment rate during the expansion of the aughts was around 11 percent. Today it’s 11.2 percent. In other words, it’s not “pretty poor,” it’s completely normal. And there’s no need to be grudging about how much it’s improved since the recession. It’s down by more than ten points since its peak.

It’s true that young high school grads have seen their incomes drop over the past decade: their cash earnings have declined about 7 percent since before the recession. But that’s also true of every other age and education cohort.

When it comes to both employment and earnings, young high school grads are doing about the same as everyone else. Maybe we should put more effort into improving their job prospects, but we don’t need to wildly misstate the data in order to make the case.

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Unemployment Among Young High School Grads Is…Pretty Much Normal These Days

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The Walmart Heirs Are Worth More Than Everyone in Your City Combined

Mother Jones

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Everybody knows that middle-class incomes have stagnated while those of the richest Americans have skyrocketed, but the trend is even more pronounced when you look at the relative fortunes of the super-duper rich. Consider the Walmart heirs: Since 1983, their net worth has increased a staggering 6,700 percent. According to a report released today by the union-backed Economic Policy Institute, here’s how many American families earning the median income it would have taken to match the Waltons’ wealth in a given year:

In 1983, the Walton family’s net worth was $2.15 billion, equivalent to the net worth of 61,992 average American families, about the population* of…

Peoria, Arizona Hanroanu/Flickr

In 1989, the Walton family’s net worth was $9.42 billion, equivalent to the net worth of 200,434 average American families, about the population of…

Albuquerque, New Mexico Len “Doc” Radin/Flickr

In 1992, the Walton family’s net worth was $23.8 billion, equivalent to the net worth of 536,631 average American families, about the population of…

San Antonio. Texas Wells Dunbar/Flickr

In 1998, the Walton family’s net worth was $48 billion, equivalent to the net worth of 796,089 average American families, about the population of…

The State of New Mexico Shoshanah/Flickr

In 2001, the Walton family’s net worth was $92.8 billion, equivalent to the net worth of 1,077,761 average American families, about the population of…

Chicago, Illinois Conway Yao/Flickr

In 2010, the Walton family’s net worth was $89.5 billion, equivalent to the net worth of 1,157,827 average American families, about the population of…

The State of Arkansas (pictured: Walmart visitors center in Bentonville) Walmart/Flickr

In 2013, the Walton family’s net worth was $144.7 billion, equivalent to the net worth of 1,782,020 average American families, about the population of…

The State of Louisiana Jim Hobbs/Flickr

Correction: An earlier version of this article confused families with individuals, causing an under-estimate of how many individuals’ net worth would equal that of the Waltons. Population equivalents in this story are based on the size of the average American family: 2.55 individuals.

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The Walmart Heirs Are Worth More Than Everyone in Your City Combined

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