The case for bigger government

Polls consistently find that Americans hold a low opinion of their government, and a common trope holds that bigger government is a barrier to economic growth. But a team of academics recently found that greater public investments in infrastructure, unemployment insurance, paid family leave and early childhood education can play important roles in making people more economically secure. They also compared the U.S. to other major economies. The New York Times’ Eduardo Porter explains:

Here are some other things Europeans got from their trade-off: lower poverty rates, lower income inequality, longer life spans, lower infant mortality rates, lower teenage pregnancy rates and lower rates of preventable death. And the coolest part, according to Mr. Lindert — one of the authors of the case for big government — is that they achieved this “without any clear loss in G.D.P.”

Mr. Porter also makes the case that Americans viewed government more favorably before the civil rights movement made access to public goods more equitable.

The American government pretty much stopped growing when the civil rights movement forced whites to share public space with blacks. Tax revenue as a share of the nation’s economic output hit a peak in 1969 that it would not attain again until 1996, according to the Organization for Economic Cooperation and Development.

A no-cost anti-poverty policy

Studies show that a remarkable way for families to move out of poverty is by moving to “higher opportunity” neighborhoods, meaning ones with better schools, lower crime, and less poverty. Housing Choice Vouchers, commonly referred to as “Section 8,” aim to help families do just that. The problem, however, is that most states- including Louisiana– allow landlords to discriminate against those who would use these vouchers to cover part of their rent. The Washington Post’s always insightful Emily Badger has more:

“Source of income” laws are meant to protect low-income tenants for whom fair housing’s more well-established edicts — landlords can’t discriminate by race, religion, disability or family status — aren’t enough. They additionally ban landlords from discriminating against renters who get help covering their rent from the government. Such laws mean landlords can’t legally broadcast “No Section 8” in their Craigslist ads. They can’t make a policy of rejecting voucher holders outright.

State parks squeezed by budget cuts

Visiting a state park could soon cost more money. State officials are considering raising entry fees and the cost of rentals as a way to offset budget cuts. Kim Chatelain at Nola.com/The TIme-Picayune explains:

State officials admit the parks were never intended to break even, much less to make money. To make up the difference, the Legislature may appropriate money from the state budget. But in a worsening fiscal climate, the growing gap between revenue and expenses is causing concern for those in charge of running parks in a state that proudly proclaims itself the sportsman’s paradise. During the 2016 legislative session, officials discussed closing some parks before a last-minute budget infusion of $750,000 kept that from happening. But the current financial state of the system is such that one big hiccup, such as costly utility breakdown at one site, could force some parks to close.

Increasing entry fees would make it harder for struggling families to access these public resources.  Louisiana already taxes people at the bottom the most. The legislature should focus on raising more revenue in a way that doesn’t hit families struggling to make ends meet the hardest.

State fiscal decisions shouldn’t be made based on oil revenue

The Tax Justice Blog features an issue Louisianans know all too well- fiscal crisis in an energy state. But the reason for states’ fiscal crises aren’t simply caused by declines in oil prices. Instead, shortsighted tax decisions made states more vulnerable to fluctuations in energy prices. Aidan Russell Davis has the story:

Louisiana’s decision to eliminate the “Stelly Plan” in 2008, for example, significantly reduced tax rates for the wealthy. This politically charged policy change cost the state an estimated $800 million a year. Over that same period, Gov. Bobby Jindal handed out lavish credits and rebates for corporations. As a result, this year alone the state has paid $200 million more in tax breaks than it has collected in corporate income and franchise taxes.

Number of the day

140,000 – Estimated number of Louisianans lifted out of poverty by the Earned Income Tax Credit and the Child Tax Credit (Source: Center on Budget and Policy Priorities)