On today’s show:
– Tamar Jacoby, director of the New Ukraine Project at the Progressive Policy Institute
Category: Uncategorized
Kahlenberg in CBS News: Colleges are slightly less diverse as admissions officers seek ways to adapt post-affirmative action
Richard Kahlenberg, director of the American Identity Project at the Progressive Policy Institute, said that if schools were to consider socioeconomic status instead of race, they could still increase diversity on campus. Kahlenberg testified on behalf of Students for Fair Admissions in support of the ruling ending affirmative action.
With data obtained through the legal process, he and an economist ran dozens of admissions simulations and found that considering socioeconomic status and ending preferential admissions for legacy students could increase diversity at Harvard and the University of North Carolina while maintaining academic caliber.
“If there were some universities that did not see declines in racial diversity, as we know there were some, then it’s incumbent upon those institutions that saw larger drops to learn what happened,” Kahlenberg said.
He added that universities and colleges have argued that this method would be far more expensive, as it would increase the amount of financial aid the schools have to provide.
“It’s not that race-neutral alternatives are ineffective, it’s that they cost more money,” he said.
Read more in CBS News.
PPI Urges NY Lawmakers to Reject Resale Ticket Price Caps That Would Stifle Competition and Entrench Live Nation-Ticketmaster’s Monopoly Power
WASHINGTON — Today, Diana Moss, Vice President and Director of Competition Policy at the Progressive Policy Institute (PPI), called on New York lawmakers to reject proposed legislation that would impose price caps on the resale of live event tickets, warning that the measures would stifle competition in resale ticket markets and entrench the monopoly power of Live Nation-Ticketmaster—harming consumers and artists.
In a letter submitted to State Senator James Skoufis and Assembly Member Ron Kim, chairs of the Senate and Assembly committees overseeing ticketing policy, Moss outlined how Senate Bill S8221 and Assembly Bill A8659 would undermine competition in the resale ticket market and distort pricing dynamics, to the detriment of fans. She sharply criticized the legislation, stating that it “would serve as a regulatory gift to monopolists like Live Nation-Ticketmaster, which is currently the subject of a DOJ antitrust monopolization case, while stripping consumers of crucial market alternatives.”
“These bills fail to address the root causes of dysfunction in ticketing, namely Live Nation-Ticketmaster’s control over the primary ticketing market through, among other tools, exclusive contracts with venues,” said Moss. “Instead, they target the far more competitive resale market, effectively knee-capping the only meaningful competition the monopoly faces. That’s bad policy that ignores fundamental economics.”
Moss also warned that state-level price controls could interfere with the U.S. Department of Justice’s ongoing monopolization case against Live Nation-Ticketmaster, a case to which New York is a party.
“Lawmakers should not pass legislation that undercuts federal antitrust enforcement,” said Moss. “Now is the time to pause and let the legal process play out.”
Rather than pursuing invasive price controls, PPI’s letter urges lawmakers to focus on reforms that enhance transparency, ensure ticket transferability, and support competitive ticketing ecosystems that work for consumers, artists, and independent venues alike.
Read and download the letter here.
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
Manno for Forbes: Microschools Go Macro And Provide More Learning Choices For Families
“Microschools aren’t so micro anymore,” writes Linda Jacobson in The 74. The COVID-19 pandemic accelerated the growth of these K-12 learning models. They became a refuge for families facing school closures and challenges with remote learning. Their expansion is another important development in America’s K-12 education choice landscape.
What Are Microschools?
Microschools are often described as today’s version of the one-room schoolhouse. They typically consist of small, mixed-age student groups. They operate in traditional school buildings, homes, churches, and commercial spaces. They emphasize customized curricula, experiential learning, and a focus on mastery of content over standardized testing.
They take different organizational forms, including learning centers that follow a state’s homeschooling rules, private schools that charge tuition, a single charter school or a member of a charter network, or a traditional public school. Their learning calendars vary from being open year-round to part-time to following a typical academic year.
Read more in Forbes.
House Republicans Rub SALT into Deficit Wounds
From our Budget Breakdown series highlighting problems in fiscal policy to inform the 2025 tax and budget debate.
Among many problems with the “One Big Beautiful Bill” passed last week by House Republicans is that it would increase the cost and regressivity of the State and Local Tax (SALT) deduction. The bill would increase the SALT cap from the $10,000 it is today to $40,000 for households making under $500,000, with all thresholds continuing to grow for the next decade. Congressman Mike Lawler (R-N.Y.), one of the House GOP’s biggest advocates for expanding SALT, triumphantly declared after the bill’s passage that “for the middle class, this is a real win.” But in reality, the main beneficiaries of the change will be the affluent — not the middle class.
To even benefit from the increased SALT deduction, one has to itemize deductions on their tax return rather than take the standard deduction. But only about 10% of taxpayers do so, typically higher-income households that have enough deductions (like SALT, mortgage interest, or charitable giving) to make itemizing worthwhile. The remaining 90% — including most middle-class and nearly all lower-income Americans — take the standard deduction, which is currently $15,000 for single filers and $30,000 for married couples.
As a result, it is primarily wealthy households that would benefit from a more generous SALT deduction. According to one analysis, a $40,000 SALT cap with a $500,000 income limit would most benefit households in the 95th to 99th income percentiles (the 95th percentile starts at approximately $316,000 in household income) who would see a 0.6% boost in after-tax income when compared to the current cap. Meanwhile, the bottom 80% of earners would see no meaningful benefit. Supporters may claim that the income cap reins in the regressivity of the deal, but in practice, it simply reorders which wealthy Americans are benefitting. While the ultra-wealthy are excluded under the income cap, extremely high-income professionals and upper-tier earners would still enjoy a sizable tax break that they hardly need.
Moreover, Republicans’ SALT deal is an expensive addition to a bill that already adds more than $3 trillion to the deficit. Relative to an extension of the $10,000 cap put in place by the Tax Cuts and Jobs Act, the Republican plan would cost an additional $320 billion over ten years. Even relative to the previous SALT change in Republicans’ original legislative text — which would have raised the cap to $30,000 with a $400,000 income limit — the plan still costs an additional $150 billion.
Supporters of raising or repealing the SALT cap claim that regardless of these downsides, it would be fundamentally unfair for the federal government to levy income taxes on money that is being used to pay state taxes. But this argument completely ignores that such practice is commonplace in the tax code. The federal government does not exempt payroll taxes before calculating income tax burdens, nor do states allow homeowners to deduct property taxes before calculating their other state tax obligations. Multiple layers of taxation are hardly a unique or unfair burden no matter what SALT defenders claim.
The Senate should reject this expensive and regressive SALT expansion and replace it with something more fiscally responsible. Even better, they should add restrictions for business SALT deduction to the bill, which currently faces no limitations. The justification for why businesses should be able to deduct their state and local income taxes from federal income taxes is just as weak as the argument for individuals.
No matter what Republicans clinging to districts in places like New York, New Jersey, and California say, the reality is that raising the SALT cap isn’t middle-class tax relief — it’s a costly giveaway to affluent households in a bill that already blows up the budget deficit far more than can be afforded. Congress should kill this SALT deal and replace it with a fiscally responsible alternative.
Deeper Dive
- A More Generous SALT Deduction Cap in the Big, Beautiful Bill Would Cost Revenue and Primarily Benefit High Earners, by Tax Foundation
- SALT Deduction Resources, by the Committee for a Responsible Federal Budget
- What are Itemized Deductions and Who Claims Them?, by the Tax Policy Center
- A Pro-Growth Approach to Capping the SALT Deduction for Businesses, by Arnold Ventures
- Ways and Means Bill Curtails SALT Cap Workarounds for All Passthrough Entities, by the Tax Law Center
Fiscal Fact
A recent analysis by the nonpartisan Joint Committee on Taxation (JCT) finds that economic growth induced by the Republican tax plan would raise only $103 billion of additional revenue over 10 years — well short of the claimed $2.5 trillion. Notably, this estimate doesn’t factor in the damage the “One Big Beautiful Bill’s” massive deficits would do to economic growth, which the JCT warns will result in larger revenue losses over time.
Further Reading
Other Fiscal News
- ‘A Bit of a Mirage’: How the Megabill Undercuts GOP’s Promises of Growth, by Politico
- House Tax Plan Now Costs $4T, Budget Forecasters Say, by Politico
- Trump Tariffs Ruled Illegal by Federal Judicial Panel, by the New York Times
- Bond Market to Washington: We’ll Make You Pay, by the Wall Street Journal
- Why Trump Lashed Out at Europe Over Trade, by the Wall Street Journal
- GOP Declares War on GAO, by Politico
More from PPI and the Center for Funding America’s Future
- House Republicans Pass ‘One Big Beautiful Bill’ Despite Several Big Red Flags, by Ben Ritz
- GOP Doubles Down on Deceptive Budget-Busting Tax Plan, by Ben Ritz and Alex Kilander
- Economic Populism From Both Parties Fails Working Americans, by Will Marshall
- Denmark is a Four-Generation Ally and a Good Neighbor, by Ed Gresser
- Renewing the Democratic Party, by Richard Kahlenberg
Denmark is a four-generation ally and a good neighbor
FACT: Denmark is a four-generation ally and a good neighbor.
THE NUMBERS:
Denmark NATO membership: | 1949-present |
Danish soldiers killed in action, Iraq and Afghanistan 2002-2020: | 50 |
WHAT THEY MEAN:
When Americans asked for help, they came. Ten years ago, Marine Gen. Daniel Yoo expresses gratitude for the U.S. Armed Forces as Danish allies rotate out of Helmand:
“I want to thank you for your steadfast partnership. We are grateful for all of your support. Your soldiers should be proud of their multiple deployments here and accomplishments, and for distinguishing themselves with valor on the modern battlefields of Afghanistan. Your country should take pride in your professionalism and commitment.”
A founding North Atlantic Treaty signatory in 1949, Denmark has been a NATO member ever since. The 21,000 Danes who served in Afghanistan and Iraq, including in high-risk provinces Helmand and Anbar, served as allies responding to the Bush administration’s call for assistance under Article V of the North Atlantic Treaty. Fifty never returned, 43 of them killed in Afghanistan and 7 in Iraq.
If we were to call again, what might they say?
This year, the Danes have been the target of a bizarre pressure campaign by the Trump administration, which says it wants to “acquire” Greenland. (Which, see below, is a self-governing country within the Kingdom of Denmark, not a possession.) To justify this the administration has raised some questions of security and critical-mineral policy, which aren’t trivial but also (a) aren’t new and (b) are now, and always have been, addressed perfectly well through international law, alliance management, and standard diplomacy. We noted last January that the opening of this campaign, along with similar decisions to pick fights with Canada and Panama, was among the most disturbing events of the transition period. Four months later our view is the same: unwarranted, lacking public support (whether in the U.S., Denmark, or Greenland), and destructive to American and Atlantic security. Some background, and then our advice for the administration:
Greenland is a close American neighbor: Nuuk, the capital, is 1300 miles from Maine and a four-hour direct flight from New York. Its 56,000 people live on 2.16 million square miles of land — a gigantic space about three times the size of Texas, though 80% of it lies under a mile-high ice sheet. Politically under the Danish Crown since 1397, and a part of the Kingdom of Denmark since 1814, Greenland is a self-governing country whose local government runs fiscal matters, schools, economic policy, and domestic affairs including control over mining and natural resources. Since 2009 it has had a “right of self-determination” extending in theory to independence. (Puerto Rico may be the closest U.S. analogue, though an imperfect one.) Greenlanders — mostly Inuit by ethnicity; the official language is Greenlandic — have been pondering the options, without any great urgency, for several decades.
Greenland participates in NATO via the Danish Armed Forces, and has an important alliance role through the U.S. military space facility at Pituffik (which, to pin down some security detail, works under the direction of the Joint Force Command in Norfolk, Virginia.) Its place in the world economy is legally complex — though Denmark is an EU member Greenland is not, having opted out of the EU for fishery policy reasons in 1979. Its economy mostly rests on tourism and about $1 billion worth of annual halibut, cod, Arctic crab, and cold-water shrimp exports to European, Chinese, and other Asian buyers.*
The independence option, though not likely to materialize in the near term, does raise some questions — principally for Danes and Greenlanders, but also for Greenland’s near neighbors in Iceland, Canada, and the United States.
With respect to security policy: Arctic security does raise important questions, in particular given Russia’s attack on Ukraine and threats against its northern neighbors. These include naval passage, the future of the Pituffik base (not a facility Greenlanders are interested in scaling back; to the contrary, it’s widely supported and both Denmark and Greenland are spending more on security these days) and commercial shipping lanes as Arctic ice retreats. As in the past, they are perfectly manageable through normal alliance relationships, diplomacy, and defense and intelligence coordination.
With respect to mining and resources: Though Greenland’s largest resource is fresh water (the ice sheet holds about 2.9 million cubic meters of water, ten times as much water as the rest of the world’s surface lakes, rivers, glaciers, etc. combined), it also has lots of rocks and would be happy to sell some of them to Americans. The U.S. Geological Survey cautiously estimates 1.5 million tons of rare earth reserves (their rare-earth estimate for the U.S. itself is 1.9 million tons) along with gem mining, and more generally Greenland has at least some of 39 of the USGS’ 50 designated “critical minerals.”
The resource endowment naturally draws interest from mining businesses worldwide, but as with the security issues, that doesn’t at all mean a crisis. To the contrary, Greenland’s government has been hoping for a while that American mining firms would show more interest than they’re now doing: this year, they count 23 British and 23 Canadian mining companies operating in Greenland, as against only one American. Here’s the relevant Minister, Naaja Nathanielsen, pitching Americans for more business last January:
“Greenland has high hopes of signing a new agreement with the United States as soon as possible. We are searching for ways to increase investments in our mining sector. … At the moment, companies in Canada and Britain own the most mining licenses in Greenland. They each hold 23 licenses. The United States holds just one. I am sure this picture can change.”
In sum, without any obvious rationale, the Trump administration has been berating Denmark in the press, insisting that the U.S. has some sort of need to acquire and administer Greenland, sending J.D. Vance to walk around in the snow looking for supporters of the idea that Greenland should join the United States (he couldn’t find one), and shifting U.S. intelligence community professionals from the useful work one hopes they’re now doing to an embarrassing, Inspector Clouseau-like mission of finding the acquisition-supporters Mr. Vance couldn’t. This has accomplished nothing useful and done much harm. PPI’s National Security Director Peter Juul sums up the consequences:
“Trump’s alienation of America’s oldest and closest allies leaves the United States less safe in the world — and raises the risk of conflict in Europe and the Pacific by sowing doubts about America’s commitments to its allies and their security.”
Now to the advice, which starts with three pretty obvious points:
- There is no “Greenland problem.” The U.S., Denmark, the Greenland government, and NATO can handle any “issues” related to Greenland policy per se, or to Arctic security more generally, perfectly well and have done so for decades.
- Both the Danish government and Greenland’s elected local government have said repeatedly (including during the first Trump term) that Greenland’s sovereignty isn’t up for discussion.
- Helmand Province in 2014 wasn’t long ago. Mistreating a four-generation ally and good neighbor, which in the very recent past has made considerable sacrifices in a shared cause, reflects poorly on the United States and erodes America’s reputation as an honorable partner.
And then the bright spot: The world is full of unpleasant choices among lesser evils, complex long-running challenges with no simple solutions, etc., etc. This isn’t one of those things. To the extent any problem exists, it is quite new and the Trump administration can choose at any moment to stop causing it. The alternative — just be a trustworthy ally and good neighbor – shouldn’t be hard at all.
* The U.S. is a minor customer, spending about $30 million a year on 2000 tons of fish and 1000 tons of crab, and selling in return about $10 million in airplane parts, weather-monitoring and telecommunications gear, and navigation equipment. Greenland escaped the Trump administration’s April 2 “reciprocal” tariff decree (though this still imposes a 10% tax on the fish and crab) because in 2024 its government bought a plane and some aircraft parts for $40 million, leaving the U.S. with a bilateral trade surplus that year.
FURTHER READING
PPI’s four principles for response to tariffs and economic isolationism:
- Defend the Constitution and oppose rule by decree;
- Connect tariff policy to growth, work, prices and family budgets, and living standards;
- Stand by America’s neighbors and allies;
- Offer a positive alternative.
Big picture:
From Peter Juul, PPI’s Director of National Security, a look at an ugly first 100 days.
From the source:
The Danish government explains Greenland’s constitutional status.
Greenland’s Business and Trade Minister Naaja Nathanielson seeks American participation in mineral development.
The Greenland Foreign Ministry.
The Danish Embassy.
And remember:
Danish Armed Forces recap their 2002-2021 Afghanistan mission.
… Gen. Yoo salutes departing allies, 2014.
… the Daily Beast reflects on Sophia Bruun, a 23-year-old Danish Army private soldier killed in action in 2010, placing her field service against Mr. Vance’s posturing last March.
… and from the BBC, Afghanistan veteran Col. Soren Knudsen looks back and ponders Trump administration Greenland threats.
ABOUT ED
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
Read the full email and sign up for the Trade Fact of the Week.
California Broadband Bill Misses Mark
The U.S. has one of the most dynamic broadband networks in the world. Providers have poured more than $500 billion into building and upgrading broadband networks since 2019. The price of internet access has dropped 10% over the past 10 years, according to the Bureau of Labor Statistics, even while the overall price level has soared. All together, the share of consumer spending going to telecom, broadband and related services fell from 3% in 2014 to 2.4% in 2024. Moreover, many providers offer robust, low-cost services for economically disadvantaged populations.
But a piece of legislation under consideration by the California State Assembly, AB 353 could derail this success story in the nation’s largest state. It would require California internet providers to offer “eligible households” internet at $15 or less per month (inclusive of any recurring taxes and fees) with at least 100 megabits per second downstream and 20 megabits per second upstream. “Eligible household” means at least one resident of the household participate in a long list of qualified public assistance programs.
This type of regulatory burden — actually writing a price ceiling into law — is likely to impede investment and expansion by both new and existing providers. If there’s anything that economics teaches us, it’s that price ceilings result in less service and fewer competitors rather than more.
California already has one of the most competitive broadband markets in the country, with multiple providers offering a wide range of products, services and price points. This includes many that already offer low-cost services for families in need. Heavy-handed regulation will only serve to scare away investment and competitors, as recently seen in New York State.
From this perspective, AB 353 is a bad idea. However, if it is the intent of the legislature to proceed with some form of this bill, several commonsense changes should be made. These include narrower qualification standards, greater flexibility in speed requirements, and tying the price of the low-income service to the CPI. Additionally, to ensure a level playing field, the requirements of the legislation should apply to all broadband providers, regardless of whether they are public or privately owned. All of these would reduce the financial risk to providers, and thus not shut off the flow of future investment.
Ryan for Newsweek: Trump Policies Hurt Workers in America’s Heartland. Democrats Have to Say So
The Democratic Party faces a whole mess of problems today. But if its post-2024 shortcomings could be reduced to any single thing, it would be this: We’ve become more concerned with those who shower before work than after. Many of the Biden administration’s priorities—forgiving student debt, banning exports of cleaner natural gas, placating protesters chanting about the “patriarchy”—made us look like tribunes of the nation’s liberal elite. No matter the pains we took to verbalize our love for the working class, our actions spoke louder than our words.
Now, I don’t doubt that many Democrats are eager to win back the working-class voters we’ve lost over the last decade. But, as many of my colleagues and friends agreed at a recent conference organized by the Progressive Policy Institute in Denver—titled “New Directions for Democrats”—our party’s failure to focus on issues that directly affect working-class voters opened the door for MAGAism. To win those voters back, we will need to focus anew on the guys who return home from work drenched in sweat, and the women who stagger back from their hospital shifts burdened by exhaustion. That means changes in both our style and our substance.
Too often, we try to skirt the hard work that entails by focusing exclusively on President Donald Trump. I don’t care for him any more than the next guy—but the hard truth is that we’ll never make inroads by ranting against the “oligarchy” alone. Instead, we need to make clear what the Trump administration is doing to undermine the working-class American Dream. The specters of fascism, racism, xenophobia, and transphobia might draw crowds to rallies, but if we’re going to reconnect with working-class voters, we need to make their cause our primary concern. And begins by highlighting how Donald Trump is affecting their communities directly.
Read more in Newsweek.
Jacoby for Forbes: Europe Looks For Alternatives To A Changing NATO
Former Lithuanian foreign minister Gabrielius Landsbergis sums up his concerns about NATO with an image borrowed from quantum mechanics: Schrödinger’s cat.
“We’re in an ambiguous position,” Landsbergis explained in an interview last week. President Donald Trump makes inflammatory statements about the alliance, threatening to walk away unless Europe steps up to carry more of the cost. But then Secretary of State Marco Rubio appears in Brussels or some other forum and calms Europe down—Landsbergis calls it “normalizing the situation.” The upshot: confusion and uncertainty. “NATO is challenged and not challenged at the same time,” the former diplomat says. And in his view, this creates a perfect, bone-chilling opportunity for Russian strongman Vladimir Putin.
It isn’t hard to imagine how the scenario would play out. If Putin can convince the White House that the U.S. will benefit from a better relationship with Moscow—as he apparently has—Trump may hesitate to jeopardize the opportunity, even if a NATO ally is attacked.
Read more in Forbes.
New PPI Report Says More Competition in Parcel Shipping is Needed to Support Growth in E-Commerce
WASHINGTON — A new report from the Progressive Policy Institute (PPI) unpacks competition in U.S. parcel shipping. The report looks at growth in e-commerce, the role of the legacy UPS-FedEx duopoly in the parcel shipping market, and the importance of entry and expansion to keep prices down for consumers and businesses. The report, “Unpacking the Shake-Up in Parcel Shipping Competition,” authored by Diana Moss, Vice President and Director of Competition Policy, and Andrew Fung, Senior Economic & Technology Policy Analyst, details how smaller and innovative carriers are eroding the duopoly — but barriers remain.
“The UPS-FedEx duopoly still has an outsized influence in the parcel shipping market,” said Moss. “More competition is needed by disruptive business models to deliver the economic benefits that businesses and consumers have come to expect from e-commerce.”
The report documents a surge in parcel shipping volumes — up 95% over the past eight years, largely to support burgeoning e-commerce. But much higher unit costs for UPS and FedEx, and parallel price increases are shining a light on the importance of smaller and more innovative carriers that compete hard on lower prices, faster delivery, and more flexibility.
Key findings in the report include:
- Retailing is a vitally important sector of the U.S. economy and the e-commerce channel is growing rapidly, more so than the brick-and-mortar channel. As a percentage of total retail, e-commerce could top 30% by the late 2020s. Parcel shipping is a critical infrastructure that supports this growth.
- UPS and FedEx together command roughly 65% of total revenue in parcel shipping, despite handling less than 40% of total package volume. Their per-package costs are far higher than those of Amazon Logistics and smaller players such as OnTrac, which are a leading source of competition that challenges the UPS-FedEx duopoly.
- Disruptive competitors are making incursions into parcel shipping, particularly in last-mile delivery. These firms are capitalizing on demand for alternatives to the legacy carriers and providing competition that will keep shipping prices down, spur quality improvements, and benefit businesses and consumers.
The report urges policymakers to recognize the central role parcel shipping plays in the retail e-commerce channel. “Parcel shipping isn’t just about logistics — it’s the critical infrastructure behind the e-commerce economy,” said Moss. “Fostering more competition is essential for keeping the cost of living, and the cost of doing business, down.”
Read and download the report here.
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
Parcel Shipping and E-Commerce: Unpacking the Shakeup in Competition
EXECUTIVE SUMMARY
The rise of e-commerce in the 1990s signaled a shift in how consumers buy consumables and even some durable products. Today, the online shopping channel parallels “brick and mortar” retailing and is expected to make further incursions into total retail sales as shopping platforms such as Amazon, eBay, Walmart, and Target drive expansion. Without the shipping logistics networks to deliver smaller parcels to the doorsteps of businesses and consumers, however, innovation and growth in e-commerce would not be possible.
Many consumers take the speed and efficiency of today’s sophisticated national, regional, and “last-mile” parcel delivery networks for granted. But it is not lost on them that for as many options as they have in online shopping, competition in parcel shipping matters just as much. Indeed, the e-commerce and parcel shipping markets are inextricably linked and over the last several years, they have undergone significant change. Carriers now compete on multiple fronts — shipping rates, speed and tracking capability, ease of claims resolution, and choice in carriers for delivery, especially in the harder-to-reach, rural parts of the U.S. Competition in parcel shipping directly affects the prices that consumers ultimately pay for delivered e-commerce goods.
The injection of competition in parcel shipping in the U.S. has come not from the largest legacy carriers, UPS and FedEx, or the U.S. Postal Service, which has a universal service obligation. Rather, competition has been spurred by smaller or disruptive players like DHL, OnTrac, Veho, and Amazon. This transformation has chipped away at the market power of the UPS-FedEx duopoly. Nonetheless, this two-firm stronghold still accounts for a substantial share of the parcel shipping market, elevating the importance of competition to benefit consumers and spur innovation and growth.
This Progressive Policy Institute (PPI) report unpacks the state of competition in the parcel shipping market. It reveals changes over time that parallel the rise of e-commerce. The analysis reveals market dynamics associated with a concentrated market that features the UPS-FedEx duopoly of legacy parcel carriers. After setting the table on the state of competition, the analysis takes up novel questions, including the benefits of expansion by non-traditional business models that can deliver benefits to consumers, and keep prices down in the important e-commerce retail channel.
Read the full report.
Gresser in Politico: The Future of the Digital Service Tax
The idea of taxing online services goes back about 15 years, according to Ed Gresser, who worked at the office of the U.S. Trade Representative during the Clinton, Obama, Trump and Biden administrations.
Gresser said that Trump strongly opposed the tax in his first term and launched investigations into DSTs adopted by EU countries, Canada, Brazil and others. The Biden administration reversed course, he said, “basically saying a lot of regulatory policies in the EU were not meant to be discriminatory.” Meanwhile, countries in the OECD tried to negotiate a global agreement on digital taxes that could replace country-by-country policies, though that effort has stalled over disagreements.
In February, Trump directed the USTR to consider renewing investigations of countries that have the tax, naming the U.K., France, Italy, Canada, Spain and Turkey.
Bashing digital services taxes seems to be a rare point of D.C. bipartisan consensus. Rep. Adrian Smith (R-Neb.), chair of the House Ways and Means trade subcommittee, said in an email that he “would like to see the U.K. be a willing partner to reset global digital rules in a way which does not target American companies and restrict innovation.”
Senate Finance ranking member Ron Wyden (D-Ore.) said via email that he too opposed “discriminatory foreign taxes that unfairly target U.S. companies, including the U.K. DST.” However, he said he had “no confidence that Donald Trump’s chaotic, unfocused trade policy will deliver any meaningful wins to bring down trade barriers.”
Gresser said U.S. pressure on London to roll back its DST could be a signal to other nations.
“A lot of countries are experimenting with this,” he told POLITICO. “I think this is sort of a transitional period where countries are thinking about ‘if we’re going to have a sales and consumption tax, how do you integrate that into the digital world?’”
Read more in Politico.
Jacoby for The Bulwark: Three Essential Next Steps on Ukraine
IS DONALD TRUMP GOING TO WALK AWAY from Ukraine? Who knows—only a fool would try to predict. His strategy, if we can call it that, changes from day to day, and his true motives, particularly with regard to Russia, are inscrutable. But all signs suggest that he may be about to give up on his oft-repeated promise to end the war.
As Trump finally recognized and admitted last week on a phone call with European leaders, Vladimir Putin isn’t ready to stop fighting. The Kremlin proved this and then some over the long weekend, hitting Ukrainian cities with nearly a thousand missiles and drones, among the worst attacks of the war. Arrogant and ill-informed, the Russian strongman thinks he’s winning.
The latest burst of Russian violence prompted Trump to criticize Putin: “He has gone absolutely CRAZY! He is needlessly killing a lot of people, and I’m not just talking about soldiers.” But the president also scolded Ukraine’s Volodymyr Zelensky: “Likewise, President Zelensky is doing his Country no favors by talking the way he does. Everything out of his mouth caused problems.” And nothing suggests that Trump is likely to re-engage with the peace process. With no deal in sight, the White House says it’s going to take a back seat as low-level Russian and Ukrainian diplomats launch pro forma talks at the Vatican.
Some Ukrainians will breathe a sigh of relief. Most are tired of fighting, eager to end the war and get on with rebuilding their battered country. But no peace is better than a bad settlement—and what Trump has been pushing for the last few months often struck Kyiv as deeply unfair and unsustainable.
Read more in The Bulwark.
Lewis for Real Clear Markets: Europe Is Toxic for Investors, and the EU Commission Shows Why
Europe has declared itself open for business — unless you’re actually trying to do business there. The European Commission’s latest €500 million fine against Apple, levied under the new Digital Markets Act (DMA), is not only a staggering penalty; it’s a signal flare to global investors that Europe is no longer a place of rule-based predictability, but one where political agendas override legal clarity, engagement, or fairness.
Apple’s offense? Attempting — repeatedly — to comply with a complex, evolving law while facing a Commission that gave them the silent treatment. According to correspondence reported by Politico, Apple spent the better part of 2024 making proposals, requesting guidance, and asking for confirmation that it was on the right side of the law. The Commission’s response: Delay, obfuscation, and ultimately, a massive fine that had seemingly been predetermined months in advance.
Let’s call this what it is: regulatory ambush.
In the Commission’s own words, “it is the sole responsibility of the gatekeepers to come up with product changes.” But how can companies do that when the Commission refuses to say what would or would not be compliant? When Apple proposed rolling back some of its rules, the Commission told them to wait for developer feedback. That feedback came from critics — Spotify, Epic, Match Group — and shortly after, Apple began to suspect, correctly, that it was being set up for a fall.
PPI: Trump’s Tariffs Are Reckless, Constitutionally Unsound
WASHINGTON — Today, Ed Gresser, Vice President and Director for Trade and Global Markets at the Progressive Policy Institute (PPI), issued the following statement on President Trump’s latest tariff orders — 50% on EU goods and 25% on iPhones:
“Mr. Trump’s erratic and destructive tariff campaigns show why the Constitution assigns the power over ‘Taxes, Duties, Imposts, and Excises’ to Congress rather than the president. Granting any single individual personal power to set rates for tariffs or any other tax is an open invitation to abuse of power, corruption, and impulse-driven policy decisions.
“This morning’s outbursts underline the Constitution’s wisdom. Mr. Trump’s tariff program has already done immense harm to the American economy, and to those of America’s neighbors and allies. As his February 1 and April 2 decrees did, this morning’s threat of a 50% tariff on European goods will raise the cost of living for American families, damage American industry and agriculture through higher costs and lost export markets, and further corrode prospects for growth and macroeconomic stability for the United States and its European allies and friends. His accompanying attempt to personally micromanage smartphone assembly is as destructive as it is ludicrous. And both are powerful and unfortunate reminders to foreign governments considering trade talks with the U.S. of the personalization and instability of this administration’s agreements and policies.
“The bright spot: Congress can act. Lawmakers have a constitutional duty to check this overreach. Recent resolutions from Senators Ron Wyden (D-Ore.) and Ron Paul (R-Ky.), and a bill by Rep. Linda Sánchez and Ways and Means Democrats, would terminate Trump’s February and April tariffs, and restore Congress’ Constitutional authority over the tariff system. It is time for Speaker Mike Johnson and Senator John Thune to join in these efforts to ‘support and defend the Constitution,’ halt the economic harm, and reaffirm the separation of powers.”
“On January 12, the week before the inauguration in January, PPI outlined four key principles for responding to tariff-driven economic isolationism. Additionally, PPI has warned of the economic risks posed by Trump’s tariff policies in a recent report and detailed these concerns in testimony before Congress and in PPI’s own coverage. For further context on the Constitution over tariffs and taxation and how the legislative, not executive branch, has the authority, see the full text of the U.S. Constitution.”
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
PPI Statement: Supreme Court Decision is a Victory for Public Education
Washington, D.C. — Today, Will Marshall, President of the Progressive Policy Institute (PPI), issued the following statement in response to yesterday’s Supreme Court decision about religious charter schools:
“Yesterday’s Supreme Court deadlock is a welcome outcome that upholds the Oklahoma Supreme Court’s decision: Charter schools cannot be religious institutions. This result preserves the integrity of the public school choice movement and reaffirms a foundational American principle — that the government should not fund religious proselytizing. Upholding this principle has helped the United States avoid the sectarian strife that has marred the politics of many other nations.
“Charter schools are showing the way forward because they offer a powerful formula: autonomy for schools, accountability for results, and parental choice among diverse educational models tailored to the unique learning styles of children. Yesterday’s decision ensures that this innovative public school model remains focused on serving all students, not advancing religious doctrine.”