Public Virtues – Distributional Fairness

Introduction:

One of the great claims of anti-statist and pro-market thinkers, especially among followers of the Austrian school, is that the public sector will always be less efficient than the private sector because of the un-replicable capacity of the market to accurately signal supply and demand through prices. To this end, commodities have to be dependent on ability to pay (hence, their objection to “de-commodification”), because that’s the only way to signal people’s willingness to pay in a system with finite resources.

However, not all commodities should be distributed according to the ability to pay. And that’s where the public sector shines – because one of the virtues of the public sector is its ability to distribute commodities fairly.

Rebuilding The Public University – Against High-Aid, High-Fees Model

Introduction:

(Note: finding precise figures and statistics about Blue Gold is not particularly easy. If my numbers here are off, I will gladly revise the piece)

My previous post about the U.C’s policy towards post-docs and other researchers whetted my interest in the travails of the public university, especially as it deals with the universal budgetary crisis faced by higher education during the recession and the underlying process of privatization faced by many public institutions.

The result is a new mini-series of posts about how to rebuild the public university going forward. And a good place to begin will be to make an important distinction about what isn’t a viable strategy for the renewal of the public university – the much-ballyhooed Blue Gold Opportunity Program that U.C President Marc Yudof has made his calling card.

66th Anniversary of the Second Bill of Rights

Today is the 66th anniversary of FDR’s historic “Second Bill of Rights” Address. To mark this occasion, I’ve re-posted a classic Realignment Project post on the Second Bill of Rights below.

At the same time, I’m thrilled to announce the publication of “Freedom From Fear: Using the Social Security Act to Rebuild America’s Social Safety Net” by the New America Foundation. This piece is my first published policy paper, and as its very existence is directly due to the blogging I’ve done here and on other blogs, I wanted to thank everyone who’s read my work for supporting The Realignment Project and helping to make this happen.

Progressivize Everything

Introduction:

It’s been a hard thirty years for those who believe in progressive taxation. Since the advent of President Reagan (oh yes, it’s the 30 year anniversary, expect to see a lot of annoying Republican nostalgia-trips this year), it became the conventional wisdom that taxes should always be cut, and that calling for tax increases was political suicide. Moreover, when taxes are reluctantly increased to raise revenues, they are much more likely to be regressive taxes (such as sales taxes, sin taxes, gasoline taxes, and the like) rather than progressive taxes like the income tax, on the grounds that voters approve of taxing the spendthrift and the morally suspect but not themselves.

In the wake of Obama’s election, this has begun to change somewhat – Obama’s first budget proposal included an increase in the top income tax bracket from 35% to 39.6% (the rate established in the Clinton Omnibus Budget Reconciliation Act of 1993), and an increase in the second-highest income tax bracket from 33% to 36%. Likewise in the House health care bill, the major source of financing is a 5.4% income tax surcharge on individuals making $500k a year and couples making a million plus, and even the Senate health care bill at least genuflects in the direction of progressive taxation by increasing the Medicare payroll tax on those making more than $200k a year.

What’s interesting about this small resurgence of progressive taxation is how limited it is – Obama’s pledge to only raise taxes on those making $250,000 a year or more is quite startling when we realize that only the top 1.5% of the country’s households earn that much money. There’s something odd about a definition of taxing the rich that excludes 85% of the top 10%.

This suggests that, if progressives are interested in really transforming our tax system which we will need to do do accomplish the progressive social and economic policy agenda, we need to start thinking more systematically about what progressive taxation should look like.