Tax Reform and Who It Benefits: A Tax Day Reading List

While some prepare to file their taxes on or before April 18, others prepare to protest during Tax Day Marches, calling upon President Donald Trump to release his tax returns and commit to a fair tax system for all Americans.

Some see this day as an opportunity to take back the discussion on tax reform and the middle class. And others note that any recent tax reform discussions will still benefit the richest 1% more than the poor and middle class.

As discussions continue on how tax reform affects all Americans, below is a list of suggested readings.

Public Debt, Inequality, and Power: The Making of a Modern Debt State by Sandy Brian Hager

“[W]ho actually owns the debt inside America? Hager has done some fascinating and path-breaking research to answer that question, and concluded that the ownership pattern is surprisingly concentrated—and unequal—and this may have implications for how the entire debt debate develops in the coming years. This is an illuminating work that deserves wide attention.”—Gillian Tett, Financial Times

A free ebook version of this title is available through Luminos, University of California Press’s open access publishing program for monographs. Visit www.luminosoa.org to learn more.

 

How Big Should Our Government Be? by Jon Bakija, Lane Kenworthy, Peter Lindert, Jeff Madrick

“An Important new book . . . goes deep into this question of government footprint and growth.”—Jared Bernstein, The Washington Post

“If you would like a low-key, reasonably argued, nonideological discussion of the economic role of the government in the United States, one based on facts and on research using the facts, this is just the book for you.”—Robert Solow, Nobel Laureate in Economics and Professor Emeritus at the Massachusetts Institute of Technology

 

Hollowed Out: Why the Economy Doesn’t Work without a Strong Middle Class by David Madland

“[I]t is time to mount a political challenge to the economic theories—namely, supply-side, or trickle-down economics—that have provided cover for the unparalleled growth in inequality over the past three decades. . . . A dramatic and clearly delineated outline of ‘how the stage has been set for transformative political conflict.'”—Kirkus

“When will we learn that an economy that works just for the wealthy just doesn’t work? David Madland explains with clarity and eloquence why trickle-down economics can’t keep its promise of rapid growth—and why a more just economy will provide better results for everyone.”—E. J. Dionne Jr., Brookings Institution, Georgetown University, and author of Our Divided Political Heart

Falling Behind: How Rising Inequality Harms the Middle Class, With a New Preface by Robert Frank

“The arguments here are powerful and multidisciplinary. The crux is explaining how rising economic inequality causes harm to the middle class. It also offers a policy reform—a progressive consumption tax—that serves to mitigate this harm. This is a gem of a book.”—Lee S. Friedman, University of California at Berkeley

“Robert Frank explains exactly how and why an unequal society leaves almost all its members worse-off, including most of those who objectively are doing ‘better.’ This is a very important application of economic logic to modern America’s main domestic problem.”—James Fallows, The Atlantic Monthly

 

It’s Not Like I’m Poor: How Working Families Make Ends Meet in a Post-Welfare World by Sarah Halpern-Meekin, Kathryn Edin, Laura Tach, Jennifer Sykes

“An important contribution to poverty policy scholarship.”—Vanessa D. Wells Journal of Sociology & Social Welfare

It’s Not Like I’m Poor inspires one to wonder whether there are existing educational interventions that, with changes to their delivery method, might lead to better experiences and outcomes for children and families… Not only did their work dispel many of the negative stereotypes of welfare -reliant mothers and present an honest picture of the financial realities these families faced, it also helped forecast the relative hardships families would face when the effects of welfare reform took shape.”—Celia J. Gomez Harvard Educational Review

Taxing the Poor: Doing Damage to the Truly Disadvantaged by Katherine S. Newman and Rourke O’Brien

“An impressive volume that makes a straightforward, compelling, and well-documented point. This is an important book—for lots of reasons.”—Daniel T. Lichter, Cornell University

Taxing the Poor makes extremely important points that are not now—but must be—part of the American discussion of poverty and social policy. The authors make these points with fascinating details on the history of how we got to this place. Bravo to Newman and O’Brien for thoroughly laying out a politcal economy of taxation.”—Robin Einhorn, author of American Taxation, American Slavery

 

The Student Loan Mess: How Good Intentions Created a Trillion-Dollar Problem by Joel Best and Eric Best

“Probably the best and clearest book on the United States’ complex student debt problem.”—Tyler Cowen TLS

“In this fully documented—but highly readable—study, Joel and Eric Best parcel out the blame among politicians, educational institutions, and the students themselves. Importantly, they propose timely actions to take ‘before this latest financial bubble bursts.'”—Richard J. Mahoney, Weidenbaum Center on the Economy, Government and Public Policy, Washington University, St. Louis

“Edgy and astute. . . . This engaging book will appeal to a broad audience of interested general readers.”—John Iceland, Penn State University


TLS on the “Sad Tale” of Student Loan Debt

The Times Literary Supplement says Joel and Eric Best, the father-son team behind The Student Loan Mess: How Good Intentions Created a Trillion-Dollar Problem, have “produced what is probably the best and clearest book on the United States’ complex student debt problem.” Student debt, which now exceeds $1 trillion and is predicted to reach $2 trillion by 2020, threatens to become the sequel to the mortgage meltdown, the authors argue in their new book. The review (only available to TLS subscribers), describes the Bests’ project to reveal the severity of America’s student debt crisis and explain how we arrived here:

Expanded student loan programmes boosted the demand for college, which made college more expensive, which in turn increased the need for student loans. Along the way, the federal government was classifying student loans as an asset on its books and so it received few serious warning signals that a major problem was building up. State governments saw that the loans were maintaining the demand for college and so they cut back on direct aid to the institutions, which further hurt affordability.

TLS isn’t sanguine about where we go from here, but concludes that The Student Loan Mess is a must-read for understanding the scope of the problem. Ultimately, the author writes, there “will be a very painful restructuring for what has traditionally been one of America’s strongest sectors – maybe its strongest – by global standards. If this does end up being a century of American decline, the student debt debacle will have played a modest but not minor role.”


Good Intentions and Ironic Consequences

by Joel Best and Eric Best

Last month brought the collapse of Corinthian Colleges, a large–but by no means the largest—for-profit college. The Department of Education struggled to engineer a soft landing for Corinthian because the taxpayers had a lot of skin in the game. Corinthian’s current students had more than a billion dollars in student loans; if the college failed, those loans would be forgiven, which is to say the taxpayers, not the student borrowers, would pick up the tab.   Other for-profits are likely to have similar problems, including several whose students owe—and will need to be forgiven–even larger sums.

For-profits are just the tip of the student-loan iceberg. The Student Loan Mess is the product of an intergenerational, interdisciplinary collaboration: Joel a sociologist who studies social problems (and Eric’s father); Eric worked at an investment bank before becoming an academic interested in applying economics to studying public policy.

Student loans have helped millions of Americans become college graduates, but they also have had troubling consequences:  prospective students pay less attention to the costs of college; colleges, in turn, feel free raise the price of tuition; the federal government offers less generous grant programs for low income students; and state legislatures find it easier to reduce their support for public institutions. And of course, without student loans, there would be no giant for-profit colleges that target high-risk students. The result: ever more students are borrowing ever larger sums, and there is little incentive for any party in the system to reduce costs in the future.

These changes reinforce existing patterns of inequality.  While many students from upper-middle class families that can cover the costs of higher education are able to graduate debt-free, graduates from less advantaged backgrounds may find themselves struggling to launch careers, start families, and buy homes while also repaying their student loans.  And, graduates with student loan debt are often far better off than those who took out student loans but then left college prior to graduation—the fate of the great majority of for-profit students, who find themselves blocked for the higher-paying jobs reserved for college graduates while still having pay off their loans.

Recent debates about student loan policies focus on how to reduce the burden of repayment, but these reforms ignore the underlying problem.  Unless we find ways to bring rising higher education costs under control, the student loan mess will only get worse.

 

Joel & Eric Best - Student Loan BookJoel Best is Professor of Sociology and Criminal Justice at the University of Delaware and author of Damned Lies and Statistics, Stat-Spotting, and Everyone’s a Winner, all from UC Press. Eric Best is Assistant Professor of Emergency Management at Jacksonville State University. Joel and Eric co-authored The Student Loan Mess: How Good Intentions Created a Trillion-Dollar Problem.