issue: Politics

Stangler for Medium: “Democratic candidates should talk flexible federalism”

Posted on by The Progressive Policy Institute

Only Washington can solve our problems. That, evidently, is what any voter or casual follower of American politics might forgivably conclude after listening to the Democrats who are vying to take on President Trump next year.

Myriad proposals are being thrown around for the federal government to provide health care for all, free education for all, and guarantee everyone jobs. Meanwhile, Democrats in Congress have proposed the Green New Deal, which would essentially have the federal government take on the task of reinventing the energy industry and, well, the entire economy.

At this moment, however, what the United States does not need is further centralization in Washington. As PPI president Will Marshall has written, we have a “mismatch of scale” in terms of problem-solving. Washington is too big to deal effectively with life’s everyday problems yet too small to cope alone with things that spill over national borders: trade, climate, and action to contain pandemics, for example. That’s why we need more distributed problem-solving. And with Washington today mired in political dysfunction, we especially need more empowerment of state and, especially, local government.

 

Read the full piece on Medium by clicking here. 

Goldberg, Pincus Testify on Value of Pre-Dispute Arbitration Agreements

Posted on by The Progressive Policy Institute

The U.S. House Committee on the Judiciary’s Subcommittee on Antitrust, Commercial, and Administrative Law held a hearing on pre-dispute arbitration clauses on Thursday, May 16, 2019.  PPI Center for Civil Justice Director, Phil Goldberg, and Andy Pincus, who served as general counsel of the Commerce Department under President Clinton, testified in support of pre-dispute arbitration clauses because of the value they provide to consumers, employees and businesses in avoiding prolonged litigation and resolving disputes.

The other participants in the hearing included Gretchen Carlson, formerly of Fox News, and Lt. Commander Kevin Ziober, each of which discussed their experiences with pre-dispute arbitration.  Deepak Gupta of Gutpa Wessler and Prof. Myriam Gilles of the Cardozo School of Law advocated for legislation that would ban the use of these agreements.

Mr. Goldberg, who was testifying on his own behalf, explained that progressives agree that the civil justice system is a public good and a keystone of American economic and political liberty because it facilitates the peaceful resolution of disputes.  But, we also know that it has its limitations and is subject to abuse. The major reason that pre-dispute arbitration is being increasingly common is because it achieves these goals of peaceful, quick and conclusive dispute resolution often better than the civil justice system for many claims.

In particular, Mr. Goldberg continued, pre-dispute arbitration agreements can be critical for consumers, employees and businesses to have access to justice in cases that are of modest value and where there is a premium on maintaining relationships after the dispute is resolved.  In litigation, plaintiffs’ firms often will not take cases valued at under $100,000 – $200,000, and the adversarial nature of litigation generally poisons the sides against each other.

In contrast to the litigation system, as Mr. Pincus explained on behalf of the U.S. Chamber Institute for Legal Reform, pre-dispute arbitration is a fair, less-complex, and lower cost alternative to our overburdened court system.  Also, empirical studies show that consumers and employees do as well or better in arbitration as in litigation: they prevail on their claims at the same rate or more frequently, and they recover as much or more when they do prevail.

Mr. Goldberg’s written testimony is here and a video of the House hearing is here.

Mandel for Medium: “Tech/Telecom/Ecommerce sector grew by 7.3% in 2018, Political Implications”

Posted on by The Progressive Policy Institute

Many of the Democratic presidential candidates are vying to see who can be toughest on the tech sector. But here’s the paradox: New data shows that the tech boom is a major force driving down unemployment, lifting economic growth, and helping voters — precisely the people that the Democratic candidates are trying to reach.

The key here is that the economic data produced by the government is not typically presented in a form that easily shows the benefits of the tech boom. Software firms, for example, are spread across at least three different industries. Ecommerce — related activities are spread across at least two industries, electronic shopping and warehousing. And telecom includes at least two three industries, telecom services, communications equipment, and data processing and hosting.

 

Read the full piece on Medium by clicking here. 

Kane for Medium: “How Medicare-For-All Would Politicize Health Coverage”

Posted on by The Progressive Policy Institute

Last week the Trump administration announced that it would give health care workers greater leeway to refuse, on religious grounds, to provide services that enable birth control use, abortion, sterilization, or assisted suicide. Specifically, the rule bars employers from requiring their employees to participate in delivering health care services they believe their religion proscribes. Such services could include scheduling a vasectomy, prepping a room for a sex change surgery or billing for an abortion.

Democrats slammed the move, which they described as a political plum tossed to religious conservatives who form an important part of President Donald Trump’s base. If they take back the White House in 2020, it won’t take them long to reverse the rule issued by the Department of Health and Human Services (HHS) Office for Civil Rights (OCR).

 

Read the full piece on Medium by clicking here. 

Long for Medium: “Under Legislation, Policymakers Would Micromanage Freight Rail Employment”

Posted on by The Progressive Policy Institute

Republicans despise federal micromanagement, but that hasn’t kept Rep. Don Young of Alaska from hopping aboard the Washington-Knows-Best Express. He recently introduced a bill mandating that freight trains have a minimum of two crew members on board trains at all times.

While Young justifies his bill on safety grounds, the bill also appears to reflect pressure from rail workers’ unions fearful that automation is putting their members out of jobs.

Here’s the backstory: Following the fatal 2008 Chatsworth train collision in Los Angeles, President Bush signed the Rail Safety Improvement Act into law. The law required freight railroads, by the end of 2020, to integrate Positive Train Control (PTC) — a nationwide system of technologies that constantly process thousands of data points to stop a train before human error-caused accidents occur. One of the benefits of PTC was that it was a win-win for consumers and the railroads, enhancing safety and allowing railroads to boost productivity by moving to one-person crews somewhere down the road.

 

Read the full piece on Medium by clicking here. 

Do-Something Congress No. 9: Reserve corporate tax cuts for the companies that deserve it

Posted on by The Progressive Policy Institute

Americans are fed up seeing corporate profits soaring even as their paychecks inch upward by comparison. Companies need stronger incentives to share their prosperity with workers – something the 2017 GOP tax package should have included.

Though President Donald Trump promised higher wages as one result of his corporate tax cuts, the biggest winners were executives and shareholders, not workers. Nevertheless, a growing number of firms are doing right by their workers, taking the high road as “triple-bottom line” concerns committed to worker welfare, environmental stewardship and responsible corporate governance. Many of these are so-called “benefit corporations,” legally chartered to pursue goals beyond maximizing profits and often “certified” as living up to their multiple missions. Congress should encourage more companies to follow this example. One way is to offer tax breaks only for high-road companies with a proven track record of good corporate citizenship, including better wages and benefits for their workers.

THE CHALLENGE:  Good corporate citizenship is punished, not rewarded, in a market that puts profits first.

The pressure to return profits to shareholders – the tyranny of so-called “shareholder primacy” – is one reason companies have been disinvesting in their workers. As Brookings Institution scholars Bill Galston and Elaine Kamarck have noted, many companies are increasingly reverting to “short-termist” behavior to avoid missing the quarterly earnings targets promised to shareholders (1). For instance, one notable survey of more than 400 CFOs found that 80 percent would “decrease discretionary spending on R&D, advertising and maintenance … to meet an earnings target” and 55 percent would “delay starting a new project” even if it meant sacrificing long-term value (2).

Companies also don’t seem to be raising wages or investing in worker training. Even as many firms have been reporting some of their best profits in years during this recovery (3), companies are cutting back on benefits like health insurance and offering less on-the-job training than they once did. And despite their recent uptick, workers’ wages haven’t caught up to where they should be. According to a Brookings Institution analysis, real wages for the middle quintile of workers grew by just 3.41 percent between 1979 and 2016, and actually fell slightly for the bottom fifth.

Corporate short-termism is bad for workers, who don’t get the wages and training they deserve. It’s also bad for companies, which are shortchanging their long-term health to satisfy short-term shareholder demands. But as long as current corporate culture remains fixated on companies’ stock prices, firms will feel tremendous pressure to put short-term profits above all other priorities – and often at workers’ expense.

 

THE GOAL:  ENCOURAGE MORE BUSINESS TO BE “TRIPLE-BOTTOM LINE” CONCERNS THAT PUT PEOPLE ON PAR WITH PROFITS

A small but growing number of firms have begun to reject the hold of “shareholder primacy” and have organized themselves as “triple-bottom line” companies committed equally to social and environmental good as well as profit. Among these is the growing number of “benefit corporations” specially organized under state law with the purpose of “creating general public benefit.” Since 2010, 34 states and the District of Columbia have passed legislation legally recognizing benefit corporations and protecting them from shareholder lawsuits for decisions that don’t maximize profits. Notably these states include Delaware, which is the leading “domicile” – or legal home – for most of America’s major companies. A significant number of benefit corporations have also won third-party certification from the nonprofit B Lab as “Certified B Corps” – essentially a Good Housekeeping seal of approval for benefit companies that have met strict standards for worker treatment, environmental stewardship and social responsibility. Among the many factors considered for certification are the share of workers who get formal training; rates of employee retention and internal promotion; the share of workers receiving tuition reimbursement or similar benefits for training and education; the extent to which “worker voice” plays a role in the company’s governance; pay equity; and company practices to reduce its environmental footprint.

According to the nonprofit B Lab, more than 2,500 businesses globally are certified B Corps. While the vast majority of these businesses are small, certified B Corps include such well-known U.S. and global brands as outdoor clothing maker Patagonia, Cabot Creamery, Ben and Jerry’s Ice Cream, and New Belgium Brewery, the makers of Fat Tire beer.  A small but growing number of B Corps are now publicly traded, including cosmetics company Natura; Sundial Brands, a subsidiary of Unilever; and Silver Chef, a company that finances commercial kitchen equipment purchases for restaurateurs.  These firms are proof that companies with an avowed social mission can in fact succeed in a cutthroat capital market. If more companies follow suit, the result could be a dramatic and beneficial shift away from the stranglehold of shareholder primacy and toward better corporate practices.

 

THE SOLUTION: OFFER TAX BREAKS TO “BENEFIT CORPORATIONS” AND HIGH-ROAD FIRMS THAT DEMONSTRATE SOCIAL RESPONSIBILITY

Many companies may feel they can’t “afford” to invest in their workers if it affects the bottom line for their shareholders. Targeted tax cuts to reward high road companies such as certified benefit corporations could, however, change the calculus for some companies and encourage them to change their behavior. These tax benefits could be structured in one of two ways:

  • Option One: Preferential tax rate.

As PPI has previously proposed, one option is to modify the new corporate tax rate to establish a preferential “public benefit corporation” rate for businesses that meet “high-road” requirements. Only the most deserving companies should qualify for the new 21 percent corporate tax rate; all others should pay a rate that is two to three percentage points higher.

To be entitled to these benefits, companies would meet one of two requirements: (1) that they be legally organized as “public benefit corporations” in their state and can provide good evidence of how they are fulfilling that mission; or (2) they must meet a minimum set of standards for worker treatment and investment, to be promulgated by a new standards-setting body authorized by Congress (effectively behaving like benefit corporations without the formality of legal status). To set the required standards, Congress could establish an inter-agency “workers’ council,” including representatives from labor and business, to establish guidelines for public benefit corporation rate eligibility (though enforcement would be left to the IRS). Companies would apply for a discounted tax rate in the same way that charities and nonprofits apply to the IRS for tax-exempt status, with the proviso that companies must also report annually on their performance, either in their public filings or in separate submissions to the IRS.

  • Option two: Benefit corporation tax credit.

A second option for structuring a high road company tax incentive is to create a tax credit for benefit corporations like the “sustainable business tax credit” offered by the city of Philadelphia. Under this benefit, first launched in 2012, Philadelphia businesses that are either certified B Corps or that can show they meet similar standards of social and environmental responsibility can qualify for a tax credit of up to $8,000 against their revenues. Up to 75 firms can apply for the credit on a first-come, first-served basis.

This structure might be especially beneficial for small and medium-sized benefit corporations structured as “pass-through” entities not subject to the corporate tax rate. As Jenn Nicholas, co-founder of the Philadelphia-based graphic design firm Pixel Parlor told Governing magazine, the credit has helped her afford higher wages and other benefits for her 10 workers. “It’s a challenge to be profitable and provide benefits to our employees,” Nicholas said. “Every tiny bit helps, and it feels like somebody is looking out for us when the general climate [for small businesses] is the opposite” (10).

While some policymakers have proposed requiring companies to treat their workers more fairly, tax incentives for high-road businesses are a better approach. Top-down mandates tend to invite resistance or evasion and will not succeed in changing the overall spirit of corporate culture in favor of shareholders over workers. Encouraging companies to reform themselves will ultimately prove the more enduring tactic. As more businesses see that they can indeed “do good and do well,” the grip of shareholder primacy will weaken, and workers will benefit.

 

Sources: 

1) Galston, William A., and Elaine C. Kamarck. More builders and fewer traders: a growth strategy for the American economy. Washington, DC: Brookings Institution, 2015.

2) Graham, John R., Campbell R. Harvey, and Shiva Rajgopa. The Economic Implications of Corporate Financial Reporting. N.p., 2005.

3) Bureau of Economic Analysis. “Gross Domestic Product, Third Quarter 2018 (Second Estimate); Corporate Profits, Third Quarter 2018 (Preliminary Estimate).” News release. November 28, 2018. Accessed March 28, 2019. https://www.bea.gov/news/2018/gross-domestic-product-third-quarter-2018-second-estimate-corporate-profits-third-quarter.

4) Kim, Anne. Tax Cuts for the Companies That Deserve It. Washington, DC: Progressive Policy Institute, 2018.

5) Shambaugh, Jay, Ryan Nunn, Patrick Liu, and Greg Nantz. Thirteen Facts About Wage Growith. Washington, DC: Brookings Institution, 2017.

6) B Lab. “State by State Status of Legislation.” benefitcorp.net. Accessed March 28, 2019. https://benefitcorp.net/policymakers/state-by-state-status.

7) Title 8: Corporations, Delaware Code §§ CHAPTER 1. GENERAL CORPORATION LAW; Subchapter XV. Public Benefit Corporations-361-386 (2017).

8) B Lab. “Certified B Corporation: About B Corps.” Benefitcorp.net. Accessed March 28, 2019. https://bcorporation.net/about-b-corps

9) Id.

10) Kim, Anne. “The Rise of Do-Gooder Corporations.” Governing, Jan 2019.

PPI’s Ben Ritz Discusses Social Security Trustees Report on C-SPAN

Posted on by The Progressive Policy Institute
PPI’s Ben Ritz joined an expert panel on Capitol Hill last week to discuss the recently published report by Social Security’s trustees. The annual report projected that the program’s trust funds face insolvency within the next 16 years, after which point beneficiaries face the prospect of an across-the-board cut of 23 percent. All panelists encouraged policymakers to close the gap between Social Security’s revenues and spending sooner rather than later, which Ben noted is critical for ensuring the changes are fair to younger and older Americans alike.
Watch the full panel here on C–SPAN.

Column: The Education Investment States Should Be Making

Posted on by The Progressive Policy Institute
As the idea of “free college” gains popularity, Virginia and Iowa are instead focused on career and technical education.

In the midst of record low unemployment, many states are nonetheless struggling with ongoing skills gaps — shortages of workers with the right skills for in-demand jobs.

At the start of 2019, according to the Department of Labor, as many as 7.3 million jobs remained unfilled. These included a substantial number of “middle-skill” jobs requiring some schooling beyond high school but not a four-year degree. They were in fields such as health care, IT, welding and truck driving. The American Trucking Associations, for instance, reported a shortage of 50,000 drivers in 2017.

One reason these gaps exist is underinvestment in career and technical education. Of the more than $139 billion in annual federal student aid spending for higher education, just $19 billion goes to career and tech ed. Students generally can’t use federal Pell Grants to fund short-term, non-college-credit training programs, such as for welding certifications and commercial drivers’ licenses. Federal dollars under programs such as the Workforce Innovation and Opportunity Act are typically limited to the lowest-income workers.

Read Anne Kim’s full opinion piece in Governing by clicking here.

Kane for Medium: “Health care debate heats up in Iowa”

Posted on by The Progressive Policy Institute

Last week PPI returned to Des Moines for a second “Conversation with Iowans,” this time about progressive alternatives to nationalized health care. The ideas forum featured former Colorado Gov. and presidential aspirant John Hickenlooper, Theresa Greenfield, a Des Moines business owner, PPI President Will Marshall and yours truly.

A strong turnout and often impassioned debate underscored that health care — the fear of losing it or not being able to afford it — is still a burning issue for Americans, just as it was during last year’s midterm election. Many participants told gut wrenching personal stories about their maddening interactions with our complex and costly health delivery system. One woman, for example, relayed how her Type 1 diabetes diagnosis had led to multiple hospital stays, medical debt, and anxiety every month over covering her insulin costs.

 

Read the full piece on Medium by clicking here.

The Australian App Economy: 2019 Update

Posted on by The Progressive Policy Institute

Apple introduced the first iPhone in 2007 just as the Global Recession was about to begin. While central bankers and national leaders struggled with a deep financial crisis and stagnation, the fervent demand for iPhones and the wave of smartphones that followed provided a rare force for growth.

The smartphone also triggered a new era for job creation around the world. Apple opened the App Store in 2008, followed by Android Market (now Google Play) and other app stores. This unexpected “side-effect” of the smartphone quickly took on a life of its own, creating a whole new class of iOS and Android developers who were writing mobile applications that could run on smartphones anywhere. 

It’s not an exaggeration to speak of a global App Economy, with an army of app developers writing mobile applications for billions of users. For businesses, apps have become the essential front door for their customers, providing access to everything from shopping to customer service to banking services to entertainment to information to essential health knowledge. 

What’s more, the App Economy still has room to grow. Internet of Things (IoT) mobile connections are estimated to reach 4.1 billion by 2024, increasing at an annual growth rate of 27 percent.2 Consumers and businesses are increasingly interfacing with physical objects and processes through their smartphones and tablets via the IoT. Companies and individuals are utilizing apps to control everyday items and processes such as smart homes, e-commerce shopping, manufacturing analytics, smart. This report updates our 2017 paper, “The Rise of the Australian App Economy”.

[gview file=”https://www.progressivepolicy.org/wp-content/uploads/2019/04/PPI_AustraliaAppEconomy_V4-1.pdf” title=”PPI_AustraliaAppEconomy_V4 (1)”]

New Ideas for a Do Something Congress No. 7: Winning the Global Race on Electric Cars

Posted on by The Progressive Policy Institute

On Donald Trump’s watch, America is losing what is probably the most important new manufacturing opportunity in the world–the global race to produce affordable electric vehicles that people want to drive. The United States currently accounts for just 20 percent of global electric vehicle production, far behind China.

Jumpstarting U.S. production and purchase of Electric Vehicles (EVs) would produce an unprecedented set of benefits, including cleaner air and a reduction in greenhouse gas emissions; a resurgence of the U.S. auto industry and American manufacturing; the creation of millions of new, good, middle class manufacturing jobs; lower consumer costs for owning and operating vehicles; and the elimination of U.S. dependence on foreign oil. U.S. automakers are already moving toward EVs, but the pace of this transition is lagging behind our foreign competitors. A dramatic expansion of tax credits for EV purchases could go a long way toward boosting the U.S. EV industry as part of a broader agenda to promote the evolution of the transportation industry away from carbon-intensive fuels.

 

THE CHALLENGE: THE US ELECTRIC VEHICLE INDUSTRY IS FALLING BEHIND ITS GLOBAL COMPETITORS

Leading experts predict (1) that electric vehicles will be the key to global auto industry growth over the next years and decade—from about 1.1 million EVs last year to 30 million by 2030. Ominously, however, China is already dominating (2) the emerging EV market, with about 40 percent of global production, and plans to expand even more rapidly over the next few years. The United States, on the other hand, currently produces only about 20 percent of the world’s EVs and is moving too slowly on the EV transition.

Electric vehicles account for just 0.3 percent of the total U.S. fleet

U.S. EV production is small – fewer than 200,000 were manufactured (3) here last year, accounting for less than 0.3 percent of the total U.S. fleet. Production is also not growing nearly fast enough. Out of the roughly 350 million vehicles on the road today, a little more than 1 million are electric.

Electric vehicles are too pricey for most consumers or are not offered in models consumers want

Most Americans cannot afford more expensive EVs—like the high-end Tesla models—that have dominated (4) the market so far. For example, two of the top three selling models in 2017 cost well over $80,000 a vehicle. The second selling model, the more affordable Chevy Bolt (still more than $36,000), sold only about 25,000 units in 2017. And the EVs that are affordable are not available in the models—especially SUVs, minivans and light trucks—that most consumers prefer, and that provide higher profit margins for automakers. As a consequence, fewer than 2 percent of the more than 17.3 million new American car purchases in 2017 were of plug-in hybrid electric vehicles or battery-electric vehicles.

 

THE GOAL: MAKE AMERICA THE GLOBAL LEADER IN EV MANUFACTURING, PRODUCTION, AND DEPLOYMENT

The aim of America’s EV policy should be to quickly gain by far the largest part of the global EV market penetration by reaching the mass market of average domestic and international consumers of high volume models. Doing this can rapidly help lower consumer costs, cut emissions, end oil imports, reduce pollution, and prompt a resurgence of domestic auto manufacturing. Specifically, the United States should set a goal of producing more than 50 percent of the global EV production—or 15 million vehicles a year–by 2030.

Fifteen years ago, the U.S. allowed Chinese subsidies to displace U.S manufacturers and dominate the global race for solar panel manufacturing—and today China owns more than (5) 60 percent of the global market. America cannot allow that to happen with EVs, which under any scenario will be an essential part of the next generation of global clean energy technology and auto manufacturing.

Electric Vehicles at scale will bring America remarkable, one of a kind benefits. For instance, EVs can dramatically reduce air pollution, which is among the leading causes of lung disease, lower life expectancy and asthma among Americans. Transitioning to EVs will also reduce America’s largest source of greenhouse gas emissions—transportation. EVs have less than half the GHG emissions of gasoline-powered cars, and are getting even cleaner every year (6). An average U.S. EV today has greenhouse gas emissions equivalent to a gasoline car getting 80 MPG (7). EVs will only get higher gasoline equivalent mileage over time.

At the same time, EVs will save U.S. consumers money because of much lower fuel and vehicle operating costs (8). The total cost of owning and operating an EV is already cheaper than oil-fueled cars (9). The U.S. average price per gallon of gasoline is $2.50 while it costs less than half that–$1.10 per eGallon–to charge an electric car, according to the U.S. Department of Energy (10).

Finally, widescale deployment of EVs will also help end America’s reliance on imported oil. Today, the US imports about 20 percent of its oil, including from non-Democratic petro-states like Saudi Arabia and Venezuela.

Gaining American global leadership in one of the world’s the fastest growing major manufacturing sectors will provide the United States a huge economic boost and create an export market for U.S. EVs around the world. Boosting the American EV industry will also bring ancillary benefits to the nation’s overall efforts for a clean-energy transition. For example, large scale EV deployment will enable the creation of a huge distributed network of electricity storage units—that is, car batteries themselves plugged into the electricity grid, especially at night. This network will allow greater electricity storage at scale that in turn will allow major electric grids around the country to integrate higher percentages of clean solar and wind energy. In essence, electrifying transport will therefore help reduce emissions from both the transport and electricity sectors, the two highest emitters in the U.S. economy.

 

THE SOLUTION: DRAMATICALLY EXPAND AND IMPROVE TAX CREDITS FOR CONSUMER PURCHASES OF ELECTRIC VEHICLES

There is no doubt America has the capacity to lead the EV revolution. America has unrivaled technical expertise, a skilled work force, and innovative entrepreneurs and investors (11). But current half-hearted U.S. tax policies on EVs are not coming anywhere near immediately seizing this massive opportunity as other countries threaten to pull so far ahead that we cannot catch up.

One powerful way to speed the revolution is through more robust tax incentives that can boost the pace of technological evolution of U.S. companies and adoption of EVs by the transportation sector as a whole.

For example, existing federal tax credits are not nearly enough to drive the change and scale of EVs that are needed to gain full benefits. The current federal tax credit system, while well intended, has so far been ineffective. It offers $7,500 for the purchase of any all-electric vehicle, but caps the credit at 200,000 vehicles per manufacture, with rapidly reduced credit amounts after that threshold. Several Members of Congress have proposed (12) extending the existing $7,500 credit with no cap per manufacturer, but do not propose changing the overall structure of the credit. These changes are highly unlikely to drive large rapid electrification of the US fleet.

What Congress should do instead is provide American consumers with much more generous tax credits for the purchase of more affordable EV models that Americans actually want and can afford, including minivans, SUVs, and light trucks.

In particular, Congress should provide a consumer tax credit that is the more generous for cheaper vehicles than for expensive ones, thereby encouraging the sale of more affordable electric vehicles. For instance, this credit could be structured on a graduated scale as follows: $7,500 for vehicles priced under $35,000; $5,000 for those under $50,000; $2,500 for those under $75,000; $1,500 under $100,000.

Opinion polls find that nearly three quarters of consumers say a tax credit would affect their decision to buy an EV, and 63 percent say a credit is an important measure to support EV adoption. However, the tax credit must be applicable to cars Americans want to buy to achieve volume and scale (13).

In addition to the graduated tax credit described above, Congress should also provide an extra consumer tax incentives for “trading-in” low mileage “gas guzzlers” for the purchase of an EV to quickly turn over fleet and eliminate the most inefficient, polluting vehicles. Moreover, Congress should provide manufacturer tax credits within each class of vehicle, including SUVs, minivans and light trucks, to drive rapid production and demand for popular models. Finally, to encourage rapid growth and large-scale production, the manufacturer tax credit should become greater for production over a certain high total threshold of vehicles produced.

The tax credits described above can go a long way toward speeding the nation’s transition to EVs while boosting U.S. EV leadership. Nevertheless, these tax credits cannot be effective if offered alone. Rather, they must be offered in concert with a robust, comprehensive agenda to accelerate electric vehicle adoption.

Crucially, the federal government and the states will need to invest in public and private incentives for building out a network of electric charging stations through much needed infrastructure modernizing legislation. Congress should also require that the federal government purchase US-made EVs for most purposes (and other alternative vehicles like Compressed Natural Gas or Fuel Cells as needed for other uses like buses and heavy-duty trucks);

The federal government could also raise Corporate Average Fuel Economy (CAFÉ) standards for an added push toward EVs. And in order to gain the full reductions in air pollution and greenhouse gas emissions, Congress will need to make sure that the electricity sector relies on increasingly clean energy sources.

America cannot afford to lose the EV race, the most important manufacturing opportunity of our time. By creating a comprehensive program to jumpstart the production and purchase of the electric cars and trucks Americans want and can afford, Congress can help the nation take a dramatic, yet pragmatic, step forward toward growing the economy, cutting oil use and consumer costs, improving air quality and combatting climate change.

ENDNOTES

1) “Electric Vehicle Outlook 2018 | Bloomberg New Energy Finance.” Bloomberg NEF. https://about.bnef.com/electric-vehicle-outlook/.

2) Niu, Isabelle. “Your next Car Could Be Electric-and Chinese.” Quartz. November 15, 2018.

3) Kane, Mark. “US All-Electric Car Sales Charted: November 2018.” Inside EVs. December 30, 2018.

4) “Top-selling Electric Cars in the United States 2017 | Statistic.” Statista. https://www.statista.com/statistics/257966/best-selling-electric-cars-in-the-united-states/.

5) Beinhart, Larry. “Why China, and Not the US, Is the Leader in Solar Power.” Al Jazeera. August 22, 2018.
6) Nealer, Rachael, David Reichmuth, and Don Anair. “Cleaner cars from cradle to grave: How electric cars beat gasoline cars on lifetime global warming emissions.” Union of concerned scientists report (2015).

7) Reichmuth, David. “New Data Show Electric Vehicles Continue to Get Cleaner.” Union of Concerned Scientists (blog), March 8, 2018. https://blog.ucsusa.org/dave-reichmuth/new-data-show-electric-vehicles-continue-to-get-cleaner.

8) Richardson, Jake. “Electric Vehicles Reduce Toxic Air Pollution – Pollution That Hurts & Kills Humans.” CleanTechnica. May 12, 2018.

9) “Electric Vehicles Have Lowest Total Cost Of Ownership, Study Finds.” CleanTechnica. February 05, 2018.

10) “EGallon: Compare the Costs of Driving with Electricity.” Energy.gov. February 9, 2019. https://www.energy.gov/maps/egallon.

11) Kljaic, Vanja. “U.S. Electric Car Battery Production Is Lacking, Says Expert.” Inside EVs. October 7, 2018. https://insideevs.com/us-electric-battery-production-lack/.

12) U.S. Senate. Jeff Merkley. “MERKLEY, HEINRICH, CORTEZ MASTO INTRODUCE LEGISLATION TO EXTEND ELECTRIC VEHICLE TAX CREDIT FOR 10 YEARS.” News release, September 17, 2018. U.S. Senator Jeff Merkley of Oregon. https://www.merkley.senate.gov/news/press-releases/merkley-heinrich-cortez-masto-introduce-legislation-to-extend-electric-vehicle-tax-credit-for-10-years.

13) “EV Statistics of the Week: Range, Price and Battery Size of Currently Available (in the US) BEVs.” EVAdoption. January 21, 2018. https://evadoption.com/ev-statistics-of-the-week-range-price-and-battery-size-of-currently-available-in-the-us-bevs/.

Kane for Medium: “Trump’s trail of broken promises on health care”

Posted on by The Progressive Policy Institute

On the campaign trail, Donald Trump promised no cuts to Medicaid, that he would protect those with preexisting conditions, and that everyone would have insurance under his new health care plan.

He has broken every one of those promises over the last two years. What’s more, the White House campaign to sabotage the Affordable Care Act (ACA) sparked a voter backlash that cost Republicans dearly in last year’s midterm election.

The president apparently has learned nothing from that rebuff. Having failed to pass legislation to kill the ACA, the administration is now turning to judicial activism and the courts. The Department of Justice (DOJ) announced yesterday that it is endorsing a Texas court ruling striking down the entire ACA.

 

Read the full piece on Medium by clicking here.

Kim for Medium: How “Moderates” are bolder than the left

Posted on by The Progressive Policy Institute

Freshman Rep. Alexandria Ocasio-Cortez recently drew big cheers at the South by Southwest conference in Austin, Texas, earlier this month when she dissed the views of political moderates as “misplaced.” “Moderate is not a stance. It’s just an attitude towards life of, like, ‘meh,’” she told a standing-room only crowd. “The ‘meh’ is worshipped now — for what?”

Ocasio-Cortez’s remarks reflect an old line of attack from the progressive left: that moderates are “mushy” — timid, if not cowardly; that they value incrementalism over true progress; and, worst of all, that they are guilty of “triangulation” — the unprincipled pandering to swing voters by pushing off both left and right.

 

Read the full piece on Medium by clicking here.

America’s Skills Gap: Why it’s Real, And Why it Matters

Posted on by The Progressive Policy Institute

A common view among the left is that the “skills gap” – a shortage of workers with the skills employers want – is a mirage.

A new PPI report decisively debunks this myth. As author Ryan Craig explains, the skills gap is real: employers are having trouble finding enough workers with digital skills and “soft skills.”

Craig attributes these shortages to two factors: “Education friction” – the failure of higher education institutions to turn out job-ready graduates — and “hiring friction” – digital screening practices that cause employers to overlook qualified workers.

Craig offers a fresh take on why skills gaps persist, the consequences for economic growth and what he calls “economic alienation” among workers feeling left behind in today’s economy.

Sen. Warren’s Tech-Bashing Populism Misses the Mark

Posted on by The Progressive Policy Institute

The last time we checked, the United States was locked in a high-stakes race with China to lead the world on digital innovation.  So we’re mystified by Sen. Elizabeth Warren’s call today to break up Google, Amazon and Facebook. These are not only America’s most creative companies, but they and other large tech platforms have pioneered a global digital revolution.

They’ve grown big because they’ve been successful. That doesn’t make them perfect and, like any private enterprise large or small, they need strong public oversight and regulation. But breaking them up, absent compelling evidence that they are systematically gouging consumers or stifling competition, would be an act of stupendous economic folly.

To be sure, business consolidation and concentrated market power are real concerns.  But as PPI economist Michael Mandel has demonstrated, such worries apply less to the dynamic and fiercely competitive digital ecosystem than to America’s older and more static physical industries.

Perhaps Sen. Warren is jockeying to enter a very crowded populist “lane” in the 2020 presidential nomination contest.  But if she believes that anti-tech populism is broadly popular with U.S. voters, she’s mistaken. In fact, as a recent PPI poll makes clear,  most Americans have a favorable view of the big tech companies, and oppose breaking them up.

Our poll found that 67 percent of likely voters view the tech companies positively, as shown in Figure 1, and 55 percent oppose breaking them up. While 60 percent of voters acknowledge they are concerned about tech companies’ handling of privacy and data protection, 71 percent of voters view tech companies as “a sign that the American economy is working.” In contrast, just 32 percent view Big Tech as “too powerful.”

Sen. Warren’s call to break up America’s tech leaders may go down well with her party’s “democratic socialist” faction. It will no doubt be applauded by European regulators, who have also drawn a bead on U.S. tech companies. But to most voters, they symbolize American ingenuity and entrepreneurial prowess. Are those qualities progressives really should oppose?

 

Gerwin for Medium: “Trump Thinks ‘Trade Isn’t Tricky'”

Posted on by The Progressive Policy Institute

When economic historians recount U.S. trade policy under Donald Trump, they’ll tell a cautionary tale. Like the current consensus that the Smoot-Hawley tariffs worsened the Great Depression and tanked global trade, future analysts will detail the negative economic effects of Trump’s go-it-alone trade policies. And historians will draw from a treasure trove of quotes from the “Tariff Man,” who famously said that “trade wars are good and easy to win.”

Perhaps no quote better captures the essence — and dysfunction — of Trump’s trade policies than his claim that “trade isn’t tricky.” Trump sees trade as a straightforward, black-and-white issue. As a result, he’s pursued simplistic — often blunt-force — solutions. Trump’s failure to appreciate the complexity of the interconnected global economy is perhaps the greatest source of the long-term damage that his policies are causing to America’s economy and global standing.

 

Read the full piece on Medium by clicking here.