Louisiana’s upside-down tax structure means the highest income-earners pay less than the poorest families, when measured as a percentage of income. The Institute on Taxation and Economic Policy’s “Who Pays” report lays this out in careful detail, and the latest edition breaks down the tax distribution by race. The conclusion: Black households pay a higher percentage of their income in state and local taxes than white households. Louisiana has work to do to make the tax structure fairer and reduce racial inequalities. LBP’s Neva Butkus has more:
One-third of Louisiana residents identify as black, yet black taxpayers comprise 40 percent of the lowest income bracket and just 11 percent of the top bracket. Because of Louisiana’s regressive tax code, this means black Louisianans are also more likely to pay higher effective tax rates. White Louisianans are overrepresented in the highest income groups. While white Louisianans comprise roughly 63 percent of the state, they are only 55 percent of the lowest income bracket and comprise a hefty 85 percent of the top income bracket. … It’s no mystery why Louisiana’s tax code is regressive: The Pelican State has the second-highest sales tax in the country when you combine state and local taxes, a fraction of a percentage point behind top-ranked Tennessee. Sales taxes fall harder on low-income households, which are forced to spend a higher percentage of their income on basic necessities. Louisiana’s personal income taxes, meanwhile, are third-lowest in the country among the 41 states that tax incomes from wages. Although Louisiana’s income-tax rates are structured to be progressive, the state also allows a federal income tax deduction that costs the treasury nearly $1 billion per year and disproportionately benefits the wealthiest taxpayers.
New grading system has mixed results
More Louisiana public schools received failing grades, and fewer schools received “A” ratings under new data released this week by the state Department of Education. The latest report card is the first since the state adopted more rigorous standards in an effort to comply with the federal Every Student Succeed Act’s plan. Meanwhile, the never-ending debate over how to measure the effectiveness of individual schools continues. Will Sentell of the Advocate has more:
The announcement marks the first unveiling of school performance marks since the state revamped how schools are rated, in part to answer criticism that Louisiana has long soft-pedaled how classrooms are faring. Under the new rating system, 13 percent of schools earned A ratings compared to 20 percent under the previous measuring stick. Those with F-ratings rose from 8 percent to 12 percent. State Superintendent of Education John White downplayed the notion that school grades are in any kind of free-fall. White said the overall distribution of grades is roughly the same as 2017, and that the percentage of D and F-rated schools is the same this year as last – 26 percent. The state’s school performance score – the basis for the letter grades – is 76.1 of 150. Under the earlier formula it would have been 93. Both are classified as B’s. Test scores are placed in one of five categories: advanced, mastery, basic, approaching basic and unsatisfactory.
Policies to uplift the middle class
The political stalemate in Washington has made Congress a graveyard for policy innovation in recent years. But with a new crop of elected official comes fresh hope that the people’s representatives will one day pass laws that lift up low- and moderate-income families. Richard Reeves and Katherine Guyout of the Brookings Institution provide for good ideas – and a payment mechanism – that Congress could consider starting in January:
Behind the daily headlines of our turbulent political climate is a stark, hard fact: the American middle class is hurting. Household incomes for the middle 60 percent of the distribution are rising, but painfully slowly, and primarily due to more work (including longer hours) rather than better wages. As the economy continues its long climb back after the Great Recession, the middle class are still feeling the squeeze, in terms of both money and time. Whichever party is in power in Congress after the midterms, an immediate priority must be to bolster the quality of life for our middle-class families. There are plenty of policy ideas floating around, many of them good. But making them a reality requires two political feats: galvanizing congressional support and addressing fears about the fiscal impact of new spending. In the spirit of offering a positive agenda for the middle class, we offer four proposals that ought to find bipartisan appeal, paired with four revenue-raising proposals that could fund each of them. Taken together, the package would be deficit-neutral.
Medicaid Expansion increases voter turnout
Voter turnout across the country was higher than normal in Tuesday’s midterm election. But new research is showing that this could be even higher in 2020 due to the expansion of Medicaid and the Affordable Care Act. People who have access to healthcare are more stable financially and psychologically, which makes them more likely to participate in civic activities such as voting. Margot Sanger- Katz of the New York Times has more on the the connection between healthcare and voter participation:
On Tuesday, voters in three states approved measures to further expand Medicaid. The election of Democratic governors in three more could also prompt new expansions. Researchers who worked on three recent studies of the effects say it’s likely that those expansions will have a similar effect on voting in the next election cycle. “We can confidently say: When you expand Medicaid eligibility, participation goes up,” said Jake Haselswerdt, an assistant professor of political science at the University of Missouri, who wrote one of the papers. It’s not clear exactly why getting Medicaid makes people more likely to vote, but there are a couple of theories. It could be that Medicaid, which has been shown to increase treatment for depression and improve financial stability, makes it easier for people to participate in the political process by giving them direct benefits. Over all, wealthier and healthier Americans tend to be more likely to vote than their poorer, sicker counterparts.
Number of the day
1- The number of states that will have a divided legislature between the upper and lower chamber – the first time in 104 years. (Source: New York Times)