The Effects of Tax Reform on the Medical Deduction

Since its inception in 1942, the deduction for qualified medical expenses has offered a type of federally funded insurance to taxpayers who itemize. By allowing the deduction of out-of-pocket medical spending that exceeds a threshold, the deduction is similar to a high-deductible health plan, under which the federal government subsidizes subsequent spending at one’s marginal tax rate.

Election Season is Great Time to Debate Net Neutrality in America

The midterm elections are six months away, and candidates are looking for innovative ways to define their campaigns. With an unemployment rate below 4 percent and recent upward revisions to the 2018 economic outlook, Republicans are preparing to campaign on a strong economy and the tax cuts enacted last December that improved US competitiveness and boosted voters’ after-tax incomes.

SCOTUS Should Balance Main Street and Online

For more than 50 years, the Supreme Court has prevented states from requiring out-of-state sellers to collect sales tax unless the seller has a physical presence, such as a local store or warehouse, in the state in which the sale occurs. Although the out-of-state sellers’ customers are supposed to remit tax on such sales, very few of them do so. As online retail sales continue to grow, states’ annual revenue loss has been estimated to be as much as $33.9 billion in 2018.

If Entitlement Reform is Too Hard, Lawmakers Can Take Baby Steps

The Washington Post reports that the U.S. deficit is headed to $1 trillion this year, the highest level since 2012. Republicans were furious about the large deficits under President Obama while he sought little to no spending constraint, but recently their focus has been elsewhere. How can we steer the fiscal outlook back toward sanity? As I see it, there are two options.

The Partisan Divide Over the Carbon Tax is all Smoke

Republican lawmakers who oppose a carbon tax are usually motivated by a belief that their constituents will get a raw deal. But standard political commentary on carbon taxation focuses on the higher costs for goods such as gasoline and electricity. Looking at who wins and who loses from a revenue-neutral carbon tax — one that also cuts existing taxes on work — yields a very different answer.

New State-Level Estimates of the Economic Burden of the Opioid Epidemic

No one disputes that opioid abuse has caused an epidemic in our country, one that costs tens of billions, if not hundreds of billions, of dollars per year. Less well known, but of vital importance to policymakers, is how these costs are distributed. Opioid abuse rates and deaths vary considerably from state to state, as do the costs associated with this epidemic. But researchers have generally focused on the economic impact of the crisis in the aggregate, at the US level. In a new analysis, I estimate the cost at the state level and find substantial variation across the country. Here, I offer a preview of my findings, which will be released in full next month.