Beginning Monday, at the order of Democratic Governor Kathy Hochul, every business in the state was required by law to have every employee and customer show proof of full COVID-19 vaccination, or make everyone inside their doors over the age of 2 wear a mask.
Violators face fines of up to $1,000. Enforcement is being left to county governments, of which an estimated one-quarter—almost all run by Republicans—have indicated they will not participate in.
The two-shot vaccination rate for New Yorkers ages 12 and older currently stands at 81 percent. Six months ago, when Hochul’s predecessor Andrew Cuomo lifted almost all statewide COVID restrictions, he did so because the Empire State had crossed the 70 percent threshold set by the Centers for Disease Control and Prevention (CDC)—not for full vaccination of everyone over age 12, mind you, but for single shots among adults.
Contra Hochul, it is far from clear that even 100 percent vaccination would have prevented a third consecutive winter surge across the northeast, which currently has the highest rates of vaccination and coronavirus cases in the United States.
It’s hard to say which of these is the “worst,” but the 2.3 percent gross receipts tax sticks out. That gross receipts taxes are an awful way to structure a business tax is one of the few things that tax policy experts across the political spectrum almost universally agree on. That’s because they make no allowance for the large variance in profit margins that different types of businesses make—whether a business has a profit margin of 0.1 percent or 10 percent, it would still have to pay the same percentage of its total revenues.
That’s a problem with any gross receipts tax, but California’s proposed tax would exacerbate this inherent problem with a rate that is three times the level of the nation’s current highest. The higher the gross receipts tax rate, the more low-margin businesses that could be put in a position where operating in California would lose them money.
Almost as bad is the proposal to institute a payroll tax on businesses with 50 or more employees. Not only are payroll taxes a regressive tax (even if the tax is imposed on the employer, it would be passed on to employees in the form of lower wages), but the 50-employee threshold would create an obvious disincentive for businesses to hire their 50th employee.
According to its most recent actuarial report, the Milwaukee County Employees’ Retirement System (ERS) had a funded ratio of 75.3% and unfunded liabilities of $569 million. The county also has separate retirement plans for mass transit employees and temporary employees, but these plans have relatively small unfunded liabilities.
Milwaukee County ERS’ liabilities grew, in part, because the county did not make its full actuarially determined contributions between 2012 and 2016, according to its most recent Annual Comprehensive Financial Report. During that five-year period, the county’s contributions fell $12 million short of recommended levels.
Since 2015, Milwaukee County’s contributions to ERS have tripled from $19 million to $57 million, as it began to meet and then exceed actuarial recommendations. These contributions exclude debt service the county pays on pension obligation bonds it issued in 2009 and 2013.
Congressional showdowns over the debt limit are nothing new, but this time around there’s a unique wrinkle. The House approved a bill on Tuesday night with what was essentially a party-line vote that paves the way for Congress to avoid a possible default on the national debt in the coming weeks. Here’s the tricky part: “The measure would create a special pathway—to be used only once, before mid-January—for the Senate to raise the debt limit by a specific amount with a simple majority vote, allowing Democrats to steer clear of a filibuster or other procedural hurdles so that Republicans would have no means to block it,” The New York Times reports.
The upshot, assuming this deal holds up long enough to avert the December 15 deadline for raising the debt limit, is that there won’t be another showdown like this before the midterm elections next November.
Most recently, the U.S. defaulted on Treasury bill payments in 1979 shortly after Congress raised the debt ceiling. According to the Congressional Research Service analysis: “In late April and early May 1979, about 4,000 Treasury checks for interest payments and for the redemption of maturing securities held by individual investors worth an estimated $122 million were not sent on time. Foregone interest due to the delays was estimated at $125,000.” The default was due to technical problems and was cured within a short period of time.
The claim that the United States has never defaulted, despite its frequent repetition, is not strictly true. Officials could make more modest and qualified claims such as “aside from a relatively minor operational snafu, the United States has not defaulted in the post-World War II era.” Such a claim lacks the power of a more sweeping generalization, but at least it’s accurate. If President Joe Biden and Treasury Secretary Janet Yellen want to seem credible, they should avoid making historic statements that are easily refuted by a small amount of Googling. If they cannot be believed about the basic reality of the federal government’s credit history, how can we believe what they say about current policy choices?
It’s true, of course, that $1 trillion doesn’t buy what it used to. That amount in 1981 would purchase about $3 trillion worth of stuff today. The best way to measure the national debt over long periods of time is to compare it to America’s gross domestic product (GDP), a rough estimate of the size of the country’s economy in a given year.
In the early 1980s, for example, even as the gross national debt exceeded $1 trillion for the first time, the national debt was less than 40 percent of GDP. The national debt is now equivalent to the country’s GDP and is on pace to be nearly 200 percent of GDP by the middle of the century, as this chart from Brian Riedl, a deficit hawk and former Republican Senate staffer now working at the Manhattan Institute, helpfully illustrates:
Private equity investments lack transparency and are difficult to value. As opposed to publicly traded securities, limited partnerships used by private equity managers can’t provide frequent performance updates and, as a result, advise stakeholders after the end of each fiscal year. This leads to a lag in reporting important details. Moreover, shares of companies owned by private equity funds are not publicly traded, meaning that their values can only be estimated, which is subject to potential bias. Private equity firms are also not obligated by the law to publish their lists of assets in accordance with Securities and Exchange Commission rules. While this information can be found on Bloomberg Professional Terminal, it is not available to the general public. This lack of transparency should be concerning to employees and retirees who rely on these funds and taxpayers who contribute to them.
For the Pennsylvania teacher system, the management fees associated with private equity investments that the plan had to pay over the past four years ($4.3 billion) are more than the total amount members paid into the plan during the same time ($4.2 billion). The pension plan recently announced that member contributions will have to be raised going forward because of long-term investment results below the plan’s benchmark. As a point of comparison, the New York State Teachers’ Retirement System, which has double the assets of PSERS, reported 36% less in total investment fees and expenses than PSERS.
According to a new survey from the Kaiser Family Foundation, as the rate of U.S. adults who report having received at least one dose of the COVID-19 vaccines continues to climb, the rates among racial groups are now basically identical, comprising 71 percent of white adults, 70 percent of black adults, and 73 percent of Hispanic adults. President Joe Biden’s proposed mandate for all private-sector employees to be vaccinated has yet to take effect, so this is a good sign for the efficacy of general persuasion over a top-down mandate.
Omarova’s most out-there academic ideas include directing the Federal Reserve to handle consumer deposits, taking that power away from banks. “Having Americans park their money at the Fed would allow the central bank to more directly and efficiently pull the levers of monetary policy by enabling it to credit individual citizens’ accounts when there’s a need to stimulate the economy,” notesPolitico.
Rob Nichols, president of the American Bankers Association, has said such policies would “effectively nationalize America’s community banks,” according to The New YorkTimes. Omarova “wants to eliminate the banks she’s being appointed to regulate,” agrees the Wall Street Journal editorial board. Groups representing both big and small banks, including the American Bankers Association, the Consumer Bankers Association, and the Independent Community Bankers of America, have reached out to more moderate Democrats to lodge their opposition to the pick—a ballsy move, given that she may end up passing down the rules that these associations’ members must later comply with.
Will COVID-19 cases and deaths surge again this winter? The combined just-released results of 9 models applied to four different scenarios at COVID-19 Modeling Hub project that diagnosed cases could—using the projections of the more hopeful models—drop to around 9,000 cases per day by March. The scenarios range from the most hopeful, with childhood COVID-19 vaccinations and no new viral variant, to one with no child vaccinations and a new variant.
University of North Carolina epidemiologist Justin Lessler, who helps run the hub, tells NPR that the most likely scenario is that children do get vaccinated and no super-spreading variant emerges.
The good news is that about 55 percent of all Americans (181 million) are now fully vaccinated (64 percent of those age 12 and up). Given that unreported COVID-19 cases are generally thought to be considerably higher than the 42 million diagnosed cases, that suggests perhaps around 100 million Americans have developed natural immunity to the virus.
Five Washington communities—Spokane, Yakima, Spokane Valley, Granger, and Battle Ground—have passed resolutions in recent weeks pledging to outlaw income taxes at the local level if the state adopts income or capital gains taxes. More jurisdictions are promising to follow suit. Local officials are intent on sending the state a message. “Small businesses are the backbone of our local, regional, state, and national economy and it is imperative that the city not put unnecessary hurdles in the way of their success,” Battle Ground’s resolution declared. “Citizens want good government that is fiscally responsible,” Republican state representative Chris Corry argued at a hearing in Yakima. “Putting an income tax ban locally shows a commitment to being fiscally responsible.”
Washington lacks an income tax thanks to a 1932 state Supreme Court ruling that interpreted the state constitution as prohibiting the levy. Over the years, voters have rejected ten attempts to amend the constitution to institute an income tax. The last vote was in 2010, when nearly 65 percent of voters gave a thumbs-down to a ballot initiative heavily supported by the state’s public-sector unions and Bill Gates Sr. (Then-Microsoft CEO Steve Ballmer and Amazon founder Jeff Bezos helped lead the opposition.)
On Thursday, the California legislature unanimously passed a budget trailer bill that will create the state’s first guaranteed income pilot program.
Under the lawmakers’ plan, the state’s Department of Social Services (DSS) will get $35 million to dole out in grants to cities and counties that will then set up local basic income schemes. Grants will be prioritized for programs focusing on “pregnant individuals” and young adults 21 or older who’ve aged out of extended foster care programs.
State Sen. Dave Cortese (D–San Jose) said in a press release Thursday that participants of these pilot programs could end up receiving monthly payments of as much as $1,000 each.