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Losing the Future: The Decline of U.S. Saving and Investment

November 21, 2014 Comments off

Losing the Future: The Decline of U.S. Saving and Investment
Source: Tax Foundation

Key Findings

  • Saving and investment are necessary for a society to adequately provide for its future.
  • Saving and investment have declined substantially as a percentage of GDP over the last 40 years, and have collapsed almost entirely since the financial crisis.
  • American private saving barely keeps pace with total government deficits. On the whole, the country saves very little.
  • American investment barely keeps pace with depreciation; U.S. private and public capital stock and infrastructure deteriorates almost as quickly as it can be repaired or replaced with new investment.
  • The U.S., overall, does not save enough money to fund all of the worthwhile domestic investments and relies substantially on foreign investors to make up the difference.
  • Tax reform could help the U.S. become a forward-looking economy that invests and saves at more prudent rates.
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Major Decisions: Graduates’ Earnings Growth and Debt Repayment

November 20, 2014 Comments off

Major Decisions: Graduates’ Earnings Growth and Debt Repayment
Source: Brookings Institution

Student debt is becoming the norm for young adults in America. Aggregate student loan debt has more than tripled over the past decade, as both the number of borrowers and the size of the average balance have increased. Today, roughly 70 percent of American bachelor’s graduates leave school with debt. For these borrowers, the typical balance is $26,500—half owe more than this amount and half owe less.

The high incidence of student debt says nothing about whether taking out student loans to pay for college is a good idea. In a previous economic analysis Major Decisions: What Graduates Earn Over Their Lifetimes, The Hamilton Project examined earnings for approximately 80 majors and found that, throughout the entire career, median earnings for every major are higher than those for high school graduates. Differences in earnings reflect both the return to skills acquired in pursuit of a degree and the underlying capability and work ethic of individuals who pursue college education. However, experts agree that for most students, college will pay off by large margins over a lifetime.

But how easily students can repay the loans used to pay for college is another matter. While career earnings tend to grow rapidly for almost every major, student loans are typically repaid in the first decade of the career when earnings are at their lowest. Such a repayment strategy places a particularly heavy burden on graduates whose earnings start low before rising later in their careers. For these students, college likely still pays off in the end, but it may not provide the cash flow needed to easily pay off loans in the years immediately following graduation.

In this second economic analysis in the Major Decisions series, The Hamilton Project turns to the question of loan repayment. The analysis explores the relationship between earnings growth over one’s career and the relative burden of debt repayment across 80 majors. Specifically, we examine the share of monthly earnings needed to make monthly loan repayments for each major under the traditional 10-year repayment plan. Accompanying the analysis is a new interactive feature that combines a debt repayment calculator with major-specific earnings trajectories, allowing the user to see what share of earnings will go to debt repayment for each year of the repayment period.

Map: How Many Americans Could Lose Subsidies If the Supreme Court Rules for the Plaintiffs in King vs. Burwell?

November 20, 2014 Comments off

Map: How Many Americans Could Lose Subsidies If the Supreme Court Rules for the Plaintiffs in King vs. Burwell?
Source: Kaiser Family Foundation

This map based on Foundation analysis of Congressional Budget Office estimates of Marketplace enrollment provides a state-level breakdown of the number of Americans who in 2016 could be denied financial assistance to help pay insurance premiums for plans purchased in the Affordable Care Act’s federally operated insurance exchanges.

The Internet Economy – Regulatory Challenges and Practices

November 20, 2014 Comments off

The Internet Economy – Regulatory Challenges and Practices
Source: OECD

The Internet has become an integral part of the everyday life of households, firms and governments. Its proper functioning over the long run is therefore crucial for economic growth and people’s wellbeing more generally. The success of the Internet depends on its openness and the confidence of users. Designing policies that protect society while allowing for Internet’s great economic potential to be fulfilled, is a difficult task. This paper investigates this challenge and takes stock of existing regulations in OECD and selected non-OECD countries in specific areas related to the digital economy. It finds that despite the regulatory difficulties, the Internet is far from being a “regulation-free” space as there are various industry standards, co-regulatory agreements between industry and the government, and in some cases also state regulation. Most of them aim at protecting personal data and consumers more generally. In many cases generally applicable laws and regulations exist that address privacy, security and consumer protection issues both in the traditional and the digital economy.

New From the GAO

November 20, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Individual Retirement Accounts: IRS Could Bolster Enforcement on Multimillion Dollar Accounts, but More Direction from Congress Is Needed. GAO-15-16, October 20.
http://www.gao.gov/products/GAO-15-16
Highlights – http://www.gao.gov/assets/670/666594.pdf

2. Veteran’s Disability Benefits: Improvements Could Further Enhance Quality Assurance Efforts. GAO-15-50, November 19.
http://www.gao.gov/products/GAO-15-50
Highlights – http://www.gao.gov/assets/670/667026.pdf

3. Consumer Product Safety Oversight: Opportunities Exist to Strengthen Coordination and Increase Efficiencies and Effectiveness. GAO-15-52, November 19.
http://www.gao.gov/products/GAO-15-52
Highlights – http://www.gao.gov/assets/670/667040.pdf
Podcast – http://www.gao.gov/multimedia/podcasts/666875

4. Intellectual Property: U.S. Customs and Border Protection Could Better Manage Its Process to Enforce Exclusion Orders. GAO-15-78, November 19.
http://www.gao.gov/products/GAO-15-78
Highlights – http://www.gao.gov/assets/670/667073.pdf

5. Freedom of Information Act: DHS Should Take Steps to Improve Cost Reporting and Eliminate Duplicate Processing. GAO-15-82, November 19.
http://www.gao.gov/products/GAO-15-82
Highlights – http://www.gao.gov/assets/670/667053.pdf

6. Defense Contractors: Additional Actions Needed to Facilitate the Use of DOD’s Inventory of Contracted Services. GAO-15-88, November 19.
http://www.gao.gov/products/GAO-15-88
Highlights – http://www.gao.gov/assets/670/667060.pdf

New From the GAO

November 19, 2014 Comments off

New From the GAO
Source: Government Accountability Office

Reports

1. Labor Relations Activities: Actions Needed to Improve Tracking and Reporting of the Use and Cost of Official Time. GAO-15-9, October 23.
http://www.gao.gov/products/GAO-15-9
Highlights - http://www.gao.gov/assets/670/666618.pdf

2. Health Care Transparency: Actions Needed to Improve Cost and Quality Information for Consumers. GAO-15-11, October 20.
http://www.gao.gov/products/GAO-15-11
Highlights - http://www.gao.gov/assets/670/666571.pdf
Podcast - http://www.gao.gov/multimedia/podcasts/666514

3. Sex Offender Registration and Notification Act: Additional Outreach and Notification of Tribes about Offenders Who Are Released from Prison Needed. GAO-15-23, November 18.
http://www.gao.gov/products/GAO-15-23
Highlights - http://www.gao.gov/assets/670/666974.pdf

4. Overseas Military Construction: Observations on U.S. Contractor Preference. GAO-15-45, November 18.
http://www.gao.gov/products/GAO-15-45
Highlights - http://www.gao.gov/assets/670/666981.pdf

5. Public Transportation: Multiple Factors Influence Extent of Transit-Oriented Development. GAO-15-70, November 18.
http://www.gao.gov/products/GAO-15-70
Highlights - http://www.gao.gov/assets/670/666993.pdf

6. Highway Projects: Many Federal and State Environmental Review Requirements Are Similar, and Little Duplication of Effort Occurs. GAO-15-71, November 18.
http://www.gao.gov/products/GAO-15-71
Highlights - http://www.gao.gov/assets/670/666989.pdf

7. Human Trafficking: Oversight of Contractors’ Use of Foreign Workers in High-Risk Environments Needs to Be Strengthened. GAO-15-102, November 18.
http://www.gao.gov/products/GAO-15-102
Highlights - http://www.gao.gov/assets/670/666997.pdf

Related Product

1. Sex Offender registration and Notification Act: Survey of Federally Recognized Tribes on Implementation of the Act (GAO-15-30SP, November 18, 2014), an E-supplement to GAO-15-23. GAO-15-30SP, November 18.
http://www.gao.gov/products/gao-15-30sp

Testimony

1. Information Security: Additional Actions Needed to Address Vulnerabilities That Put VA Data at Risk, by Gregory C. Wilshusen, director, information security issues, before the House Committee on Veterans’ Affairs. GAO-15-220T, November 18.
http://www.gao.gov/products/GAO-15-220T
Highlights - http://www.gao.gov/assets/670/666969.pdf

Wireless Taxation in the United States 2014

November 19, 2014 Comments off

Wireless Taxation in the United States 2014
Source: Tax Foundation

Key Findings

  • Americans pay an average of 17.05 percent in combined federal, state, and local tax and fees on wireless service. This is comprised of a 5.82 percent federal rate and an average 11.23 percent state-local tax rate.
  • The five states with the highest state-local rates are: Washington State (18.6 percent), Nebraska (18.48 percent), New York (17.74 percent), Florida (16.55 percent), and Illinois (15.81 percent).
  • The five states with the lowest state-local rates are: Oregon (1.76 percent), Nevada (1.86 percent), Idaho (2.62 percent), Montana (6.00 percent), and West Virginia (6.15 percent).
  • Four cities—Chicago, Baltimore, Omaha, and New York City—have effective tax rates in excess of 25 percent of the customer bill.
  • The average rates of taxes and fees on wireless telephone services are more than two times higher than the average sales tax rates that apply to most other taxable goods and services.
  • Excessive taxes on wireless consumers disproportionately impacts poorer families.
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