Van Reenen argues the U.S. should pursue a robust innovation policy composed of tax credits, direct subsidies, and human capital investments, which have been shown to spur innovation and wage growth. He proposes combining these approaches into a 10-year $1 trillion Grand Innovation Challenge, which would reinvigorate R&D investment, promote American technological leadership, and advance policy goals of inclusive growth.
This report puts forward a set of policies that should be part of the next wave of fiscal policy aimed at bolstering individuals and workers, small and mid-sized businesses, and state and local governments during a sustained recovery from the Covid-19 pandemic.
In this chapter, author Dan Silverman of Arizona State University describes a body of evidence showing that large fluctuations in household income are commonplace both across and within years. However, these households’ reactions to shocks reveal substantial resilience despite their lack of a financial buffer. Silverman argues these facts imply that successful policies will focus on limiting the uninsured risks that families face.
The Biden Administration’s American Jobs Plan and American Families Plan propose over $4.1 trillion in new government spending over the next 10 years, aiming to fundamentally reshape and expand the social safety net, increase the economy’s productive potential through investments in physical and human capital, and make major public investments in green infrastructure and technology. […]
State-level Minimum Zoning Mandates (MZMs) allowing landowners to build at a state-guaranteed minimum density, even in municipalities resistant to development, would be an effective means of encouraging denser housing development. These MZMs would improve housing affordability, spread economic opportunity more broadly, and limit the environmental impact of new development.
In this chapter, author David Neumark proposes a Higher Wages Tax Credit (HWTC) to partially offset the costs imposed by minimum wage increases on firms that employ low-skilled labor. Following a minimum wage increase, the HWTC would provide a tax credit of 50% of the difference between the prior minimum wage and the new minimum wage, for each hour of labor employed; the credit would phase out at wages higher than the minimum wage, and as wage inflation erodes the real cost of higher nominal minimum wages.
A national debate about the strength and fairness of American capitalism is taking place against a backdrop of vast levels of income and wealth inequality, growing pessimism about the state of economic opportunity and mobility, increased market concentration in many sectors, and a precarious fiscal situation.
Viard argues that a wealth tax in the U.S. would pose administrative and constitutional challenges. As an economic matter, such a tax would decrease savings and investment, thereby lowering the capital stock, making workers less productive, and slowing wage growth. The potential revenue that would be gained is unclear.
Amidst a resurgence in COVID-19 caseloads and continuing economic devastation from the pandemic, we urge Congress to enact legislation that focuses on the core measures necessary to provide additional fiscal relief as quickly as possible and no later than the end of this calendar year.