Month: February 2021

ILLINOIS HOUSE SPEAKER UNWILLING TO TAKE VOTERS’ ‘NO’ ON ‘FAIR TAX’ FOR AN ANSWER

Mary Pat Campbell

Link: https://www.illinoispolicy.org/illinois-house-speaker-unwilling-to-take-voters-no-on-fair-tax-for-an-answer/

Graphic:

Excerpt:

Pension costs are already eating away at Illinois government services. The ballooning costs caused a nearly one-third cut since 2000 in core services such as child protection, state police, mental health and college money for low-income students.

Pension contributions accounted for less than 4% of Illinois’ general funds budget from 1990 through 1997 but have grown to consume 28.5% of the budget. Still, the pension debt has mushroomed to $144.4 billion by the state’s estimates, which more realistically was at an all-time high of $261 billion at the end of fiscal year 2020 according to Moody’s Investors Service calculations using more realistic assumptions. In any case, public pension debt is eating a larger chunk of Illinois’ gross domestic product than anywhere else.

Author(s): Adam Schuster

Publication Date: 25 February 2021

Publication Site: Illinois Policy Institute

Covid Vaccine Websites Violate Disability Laws, Create Inequity for the Blind

Mary Pat Campbell
Covid Vaccine Websites Violate Disability Laws, Create Inequity for the Blind

Excerpt:

In at least seven states, blind residents said they were unable to register for the vaccine through their state or local governments without help. Phone alternatives, when available, have been beset with their own issues, such as long hold times and not being available at all hours like websites.

Even the federal Centers for Disease Control and Prevention’s Vaccine Administration Management System, which a small number of states and counties opted to use after its rocky rollout, has been inaccessible for blind users.

Those problems violate the Rehabilitation Act of 1973, which established the right to communications in an accessible format, multiple legal experts and disability advocates said. The federal Americans with Disabilities Act, a civil rights law that prohibits governments and private businesses from discriminating based on disability, further enshrined this protection in 1990.

Author(s): Lauren Weber and Hannah Recht

Publication Date: 25 February 2021

Publication Site: Kaiser Health News

GameStop Follies: The Long and the Short of It

Mary Pat Campbell

Link: https://marypatcampbell.substack.com/p/gamestop-follies-the-long-and-the

Excerpt:

Activist short-sellers are different in the types of actions they advocate. These are people who are shorting the stock, and are arguing the current market value for the shares is too high. They may claim something is stinky about the financial reporting of results, and that regulators should audit the books. They may point out that management is engaged in some value-destroying activity that shareholders were unaware of. The activist shorts aren’t trying to destroy value — they claim that the true economic value was already much lower than the stock price would indicate, and that’s because the information the market has about the company is just plain wrong.

They’re being activists not because of altruism, obviously, but that the faster the market prices adjust to what they think the true value is, the less they’re exposed to the risk of getting squeezed out of their short position before they can profit.

Author(s): Mary Pat Campbell

Publication Date: 25 February 2021

Publication Site: STUMP at Substack

Reliance on Social Insurance Tax Revenue in Europe

Mary Pat Campbell
Reliance on Social Insurance Tax Revenue in Europe

Graphic:

Excerpt:

A recent report on tax revenue sources shows that social insurance taxes—also referred to as social security contributions or payroll taxes—are an important revenue source for European governments. Social insurance taxes, as opposed to individual income taxes, are usually levied at a flat rate. The revenue is generally used to fund specific social programs, such as unemployment insurance, health insurance, and old age insurance.

In 2019 (the most recent data available), social insurance taxes were the second largest tax revenue source in European OECD countries, at an average of 29.5 percent of total tax revenue. Only consumption taxes were on average a larger source of tax revenue, at 32.4 percent.

Author(s): Elke Asen

Publication Date: 25 February 2021

Publication Site: Tax Foundation

Does Your State Have an Estate or Inheritance Tax?

Mary Pat Campbell
Does Your State Have an Estate or Inheritance Tax?

Graphic:

Excerpt:

In addition to the federal estate tax, with a top rate of 40 percent, some states levy an additional estate or inheritance tax. Twelve states and the District of Columbia impose estate taxes and six impose inheritance taxes. Maryland is the only state to impose both.

Hawaii and Washington State have the highest estate tax top rates in the nation at 20 percent. Eight states and the District of Columbia are next with a top rate of 16 percent. Massachusetts and Oregon have the lowest exemption levels at $1 million, and Connecticut has the highest exemption level at $7.1 million.

Of the six states with inheritance taxes, Nebraska has the highest top rate at 18 percent. Maryland imposes the lowest top rate at 10 percent. All six states exempt spouses, and some fully or partially exempt immediate relatives.

Author(s): Janelle Cammenga

Publication Date: 24 February 2021

Publication Site: Tax Foundation

Robinhood and Redditors: Who’s robbin’ who?

Mary Pat Campbell
Robinhood and Redditors: Who’s robbin’ who?

Excerpt:

Robinhood is a broker. It is a FINRA-regulated broker-dealer. It relies on a clearing house to clear its transactions. The clearing house it uses is the National Securities Clearing Corporation (NSCC), which is a subsidiary of the Depository Trust & Clearing Corporation (DTCC). Thus, Robinhood is a “member” of NSCC. The NSCC is a “designated financial market utility” as defined in the 2010 Dodd-Frank Act. Thus, it is “a financial market utility that the Council has designated as a systemically important.” (“The Council” is a regulatory body created by Dodd-Frank. Its ten voting members include the Treasury Secretary, the Fed chair, and the comptroller of the currency.) NSCC is a provider of “financial market infrastructure” (FMI). As such, it must publicly promulgate rules for the computation of the “Clearing Fund” every “member” must maintain with it. While the FMI is responsible for designing its own rules for determining the clearing fund, they are subject to approval or rejection by the regulatory authorities. In particular, the SEC may prohibit any changes NSCC wants to make in its formula for computing the clearing fund of each member. The Bank for International Settlements (BIS) has promulgated a set of “principles” that member states should adhere to in regulating payment and settlement systems. These include, “An FMI should maintain sufficient financial resources to cover its credit exposure to each participant fully with a high degree of confidence.” 

Thus, the regulatory authorities require clearing houses to require members to keep a risk-adjusted balance with them as a guard against credit risk. In the case of Robinhood, the short squeeze drove this formulaic value up sharply. Robinhood didn’t really have much of a choice about how to respond. It had to both pony up more money for the clearing fund and act to hold off (to the extent possible) further increases in it. Robinhood had to borrow a lot of money to maintain its clearing fund.

Author(s): Roger Koppl

Publication Date: 2 February 2021

Publication Site: EconLib

Red State Budgets Are Suffering The Most In This Recession

Mary Pat Campbell

Link: https://www.forbes.com/sites/lizfarmer/2021/02/18/red-state-budgets-are-suffering-the-most-in-this-recession/?utm_source=newsletter&utm_medium=email&utm_campaign=follow&cdlcid=5f3d53896be319c3c36cff29&sh=7f2620337b69

Graphic:

Excerpt:

Of those states suffering at least a 3% drop in revenue since the start of the pandemic in March 2020, two-thirds (eight in 12) are red states. Alaska, Florida, North Dakota and Texas are seeing some of the worst revenue losses of 9% or higher over the comparable period in 2019, according to the latest data from the Urban Institute.

Across the 47 states from which the institute has full data, total state tax revenues were down by $14 billion in the first ten months of the pandemic (between March and December 2020) compared to the same period a year earlier. That’s an average drop of 1.8% and is largely driven by declines in sales tax revenue.

Author(s): Liz Farmer

Publication Date: 18 February 2021

Publication Site: Forbes

Puerto Rico Bonds, MBIA Stock Jump on Restructuring Settlement

Mary Pat Campbell

Link: https://www.wsj.com/articles/puerto-rico-bonds-mbia-stocks-jump-on-restructuring-settlement-11614179542

Excerpt:

A settlement between creditors in Puerto Rico’s bankruptcy case lifted prices of the commonwealth’s municipal bonds and shares of insurance companies that guaranteed payments on the bonds.

Traders have driven up prices of the island’s benchmark $3.5 billion general obligation bond due 2035 by 3.3% to around 78 cents on the dollar after the Tuesday deal removed one of the last logjams in Puerto Rico’s nearly four-year journey through bankruptcy court. Roughly $400 million face amount of the bond changed hands Tuesday and Wednesday, making it one of the most actively traded securities in the municipal-bond market, according to data from Electronic Municipal Market Access.

Shares of the insurers that guaranteed payments on billions of dollars of Puerto Rico’s defaulted bonds also rose as the settlement removed some uncertainty about the amount of claims they would need to pay. MBIA Inc.’s stock has jumped around 13% this week, while Ambac Financial Group Inc.’s shares have gained about 7.2%.

Author(s): Matt Wirz

Publication Date: 24 February 2021

Publication Site: Wall Street Journal

The Economist’s tracker for covid-19 excess deaths

Mary Pat Campbell

Link: https://github.com/TheEconomist/covid-19-excess-deaths-tracker

Excerpt:

This repository contains the data behind The Economist’s tracker for covid-19 excess deaths and the code that we have used to clean, analyse and present the numbers.

….

Our tracker uses data from a number of statistical bureaus, government departments and academic projects. For many of the countries, we have imported total_deaths from the Human Mortality Database, which collates detailed weekly breakdowns from official sources around the world. For other countries, you can find a full list of sources and links in a file called list_of_sources.csv, as well as spreadsheets in the /source-data/ folder.

For most countries, we have imported national figures on official covid deaths from a time series maintained by Johns Hopkins University and Our World In Data. For some countries, we have provided a regional breakdown of mortality. In these cases, we have imported regional covid_deaths from a variety of sources, including a Latin American time series maintained by Data Science Research Peru.

Date accessed: 25 February 2021

Publication Site: github

Biden’s retirement idea getting the cold shoulder

Mary Pat Campbell

Link: https://www.pionline.com/defined-contribution/bidens-retirement-idea-getting-cold-shoulder

Excerpt:

Equalized tax advantage proposal being met with skepticism by industry

Alicia Munnell doesn’t think the shift would help because workers typically don’t look at tax incentives.

Trade groups representing plan sponsors have snubbed a proposal floated by President Joe Biden to give individuals across all pay grades equal tax advantages for their retirement savings.

Author(s): MARGARIDA CORREIA

Publication Date: 22 February 2021

Publication Site: Pensions & Investments

The good and bad in Biden’s giant relief bill

Mary Pat Campbell

Link: https://finance.yahoo.com/news/the-good-and-bad-in-bidens-giant-relief-bill-210546323.html

Excerpt:

Aid to states and cities. Cost: $350 billion. This money would offset lost tax revenue and help mayors and governors “mitigate the fiscal effects stemming from the public health emergency,” according to draft legislation. it’s clearly related to the pandemic, so it counts as relief, but it might also be more than states and cities need, since government revenue has held up better than expected during the last 12 months. 

….

Pension relief. Cost: $74 billion. This money would address longstanding problems at roughly 1,400 underfunded pensions covering 10 million workers and retirees, most of them belonging to unions. A government agency called the PBGC is supposed to backstop pensions that run short of money, but it, too, is drastically underfunded and poised to collapse in coming years. The money in the House bill would bail out the riskiest pensions, but it’s controversial because it’s not paired with needed reforms—and it’s not specifically related to problems caused by the pandemic. This could be one provision that doesn’t survive the Senate.

Author(s): Rick Newman

Publication Date: 22 February 2021

Publication Site: Yahoo Finance

The march of the coronavirus across America

Mary Pat Campbell

Link: https://www.economist.com/graphic-detail/tracking-coronavirus-across-america

Graphic:

Excerpt:

However, herd immunity will take months to achieve, and the sheer scale of infections in America dictates that covid-19 will not be under control for some time. In order to see where the pandemic is currently most severe across the nation, we have created an interactive map of covid-19 cases and deaths. It divides America into 500 areas. For each of these it shows cases and deaths per 100,000 people, so that infection and death rates in, say, New York City and its surrounds (population 40m) can be compared with those in Ironwood, Michigan (population 27,000).

Publication Date: 23 February 2021

Publication Site: The Economist