American Taxpayer Research Articles

The politics of percentage: Informating justice in the US clean energy rush

Within days of taking office in January 2021, President Biden signed an executive order establishing the Justice40 initiative, which directed federal agencies to ensure that at least 40% of the benefits of federal investments flow to historically marginalized communities. This article traces how Justice40, as interpreted and enacted by government bureaucrats, academics, industry researchers, and activists, intervenes in the governance of the energy transition it seeks to put into motion. Drawing from ongoing critical participation in energy research and development arenas and taking inspiration from Kim Fortun’s notion of the “informating of environmentalism,” this article argues that Justice40 can be understood as an attempt to informate justice, rendering it into problems that can be understood, manipulated, and audited through information systems. Scrambling to manage their accountabilities to the executive branch, Congress, and the American taxpayers footing the bill for massive infrastructure investments, Department of Energy programs are rolling out intricate systems of quantification, whose objectives of commensurability obscure local conceptions and prioritizations of justice. While Justice40 articulates lofty goals of energy transition enhancing the wellbeing of people who have otherwise been harmed by or excluded from the country’s existing energy infrastructure, its everyday practice has the ironic effect of undermining both epistemic and procedural justice.

Dollars and megabits: A comparative analysis of Telecom and Healthcare Connect Fund

Two federal programs in the United States subsidize internet access for rural healthcare providers, namely, Healthcare Connect Fund (HCF) and the Telecom Program. HCF uses a subsidy mechanism that strongly incentivizes healthcare providers to shop for faster or cheaper internet. Telecom does not incentivize shopping. Theoretically, this predicts that HCF must achieve faster or cheaper internet than Telecom. I empirically test this question and find that Telecom subsidy recipients pay 132-179% more than HCF subsidy recipients on similar internet plans. Evidence point to Telecom's poor incentive design as the root cause. Eliminating this price gap would save American taxpayers $143 million annually. The findings highlight the power of program design, showcase the unintended consequences of misaligned incentives, and encourage policymakers to thoroughly examine program features, the impact on consumer behavior, and the effect on competition and market outcomes.

Эволюция приоритизации военной помощи США при администрациях Трампа и Байдена

Aid policy is one of the important foreign policy tools in the US struggle for global leadership. The US federal government spends about $60–70 billion annually on this area of public policy. Most of these truly large-scale financial resources are spent on economic assistance, but a lot is dedicated to military assistance too. This article, using the institutionalism methodology, examines how the US military assistance depends on the international situation, the internal political environment in the United States itself, as well as on the significance of a particular recipient country in the logic of American national interests. The author focuses on the rules of prioritizing this type of assistance and a possible evolution of the existing practice. A particular emphasis is on the study of American military assistance to Ukraine in the period 2022–2023. The author analyzes the dynamics of its provision depending on the goals of the United States, the international military situation, as well as the methods of providing such support, tools and programs for its implementation. It is shown how the United States administration is trying to manage this armed conflict in accordance with its own interests through the transfer of weapons and military equipment. It was investigated via what mechanisms military assistance is financed and, subsequently, how the delivery times of weapons and equipment depend on them, when exactly a part of military items is supplied from the US Army reserves. Also, the ways in which special initiatives and funds are used to accumulate finances to implement aid policy for a certain country were examined. In addition, the paper considers the situations when the United States of America provides military aid, which formally does not qualify as aid, since not being purchased with the money of American taxpayers, but at the same time it is still should formally considered as such.

Solving Solar: How Past Policy Collides With Future Technology

This Comment discusses the importance of developing a solar waste management plan. Specifically, this Comment presents the argument that the United States should not create a large federal regulatory framework that includes expansive subsidies for solar panel recycling, but instead should invest in solar recycling technologies that offer solar recyclers the opportunity to profitably recycle junk panels. Ultimately, the federal government’s role should be limited to one of investment and support as states craft solar waste management systems that work for them.
 In support of this argument, this Comment explores the history and future of solar panel development, the current state of solar production and recycling, and the magnitude of the threat solar waste presents. Additionally, this Comment discusses how nations outside the United States are addressing the solar waste problem, the advent of new solar recycling technologies, how Congress may adapt the existing Resource Conservation and Recovery Act to include solar panels and encourage recycling of junk panels, the success story of lead-acid battery recycling, and what the solar recycling network of the future may look like.
 Ultimately, this Comment concludes that given recent advancements in recycling technology, with proper planning, encouragement, and investment from both state and federal governments, the private sector will be incentivized to recycle used solar panels without burdensome government intervention while sustaining a profitable business. Such a result will create a truly clean and renewable source of energy and relieve American taxpayers from bearing the cost of expensive solar recycling subsidy programs.

Tax reforms and elasticity of taxable income: estimation using the current population survey

ABSTRACT Changes in taxable income can capture many of the behavioural responses to changes in tax policies. In this paper, using the publicly available Current Population Survey (CPS) data and analysing two of the most recent tax reforms (Tax Cuts and Jobs Act of 2017 and the American Taxpayer Relief Act of 2012), we provide a new estimate for the elasticity of taxable income with respect to marginal tax rates. As is common in the literature, the paper conducts a panel data analysis and compares taxable income from before and after tax reforms to estimate the elasticity. Using an instrumental variable approach, we find an elasticity of 0.81, a value that is within the range of estimates found in previous studies.

Global neurology: It's time to take notice.

Global neurology: It's time to take notice.

While Poor and Lower Income Taxpayers Are Forced to Subsidize the Lifestyle of Well-To-Do Elites, Evidence in The Current Research Suggested No Reliable Data Have Ever Existed for Scientific Analysis That Suggested Pollution or Manmade Contribution to Climate Change: Presenting Eddison Walters Climate Change Research Deception and Misinformation Theory

There is no debate the climate on earth is changing but research conducted by Walters and Djokic (2022) presented evidence that established, studies that attribute pollution or manmade cause and effect in climate change research are based on junk science. The study presented evidence that suggested, scientific data analysis linking manmade causes or pollution to climate change does not exist. Walters and Djokic Quantitative Analysis Factor Distortion Theory expanded Eddison Walters Modern Economic Analysis Theory which was developed by Walters (2020A) and was expanded by Walters and Djokic (2022). Walters and Djokic Quantitative Analysis Factor Distortion Theory which was explained in Walters and Djokic (2022) resulted in proposed changes by the researchers to restore the reliability and creditability of data analysis in scientific research. The researchers called for the implementation of changes to American Psychological Association (APA) standards aimed at avoiding junk science such as research that incorrectly links pollution or manmade causes to climate change without scientific evidence based on scientific data analysis from being accepted into the body of literature as scientific research (Walters, 2020: Walters, 2021; Walters & Djokic, 2022). The foundation of Walters and Djokic Quantitative Analysis Factor Distortion Theory is grounded in the principle, of "all else being equal", which has been a long-established principle for the scientific analysis of data to ensure unknown factors do not distort the results of data analysis. The current study applied the principles of Walter and Djokic Quantitative Analysis Factor Distortion Theory for evaluating the creditability of directing taxpayer resources to green energy policies aimed and reversing climate change. The current study also considered what segment of the population benefits the most from green energy policies and what segment of the population shoulders the cost burden. The current study considered the opportunity cost of allocating taxpayer resources to implement green energy policy by considering challenges facing American taxpayers where the results of investments have quantifiable scientific measurements for successful implementation rather than committing resources to implement green energy policy with no quantifiable scientific measurements for successful implementation

Summaries of Papers In This Issue

Summaries of Papers In This Issue

Do high-income individuals respond to the change in the marginal tax rate? Evidence from Major League Baseball

ABSTRACT Income taxation affects individuals’ incentives to work, save, and take risks. These behavioural responses to taxation is key to evaluating efficiency cost of taxation. Especially, the response of rich individuals to taxation is important because of their impact on the tax revenue and on the economy. In this paper, I analyse the response of Major League Baseball players to the increase in the top tax rate due to the American Taxpayer Relief Act of 2012. Using difference-in-differences estimation applied to the players with different years of free agent contracts, I do not find any negative effect of the tax increase on the players’ performance.

IRC §§ 7431 and 7433: Civil Remedies for Abusive Practices by the IRS

A government must have revenue to exist, and a government the size of the present-day United States government requires a staggering amount of revenue. As the revenue assessing and collecting branch of the government, the Internal Revenue Service performs the crucial function of ensuring the steady and continuous flow of revenue. To enable it to perform this function, Congress and the courts have granted the Service broad powers of investigation and seizure that are denied most other law enforcement agencies by statutory and constitutional safeguards, and have generally shielded the Service from accountability to the taxpayers involved or to any other authority.In 1976, however, Congress began enacting legislation intended to ensure the proper exercise by the Service of its extensive powers, and to prevent the misuse of the massive database that the Service has constructed on American taxpayers. Given the ever-expanding use of the tort system in the United States as a means of private law enforcement, it is not surprising that one of the tools chosen by Congress to police the Service was the taxpayer lawsuit for damages against the federal government. This Article will focus on two provisions, section 7431 (and its substantive base, section 6103) and section 7433, in which Congress established this method of accountability.

Культурна дипломатія Державного департаменту як інструмент зовнішньої політики США: "золотий вік" (1953 – 1961 роки)

The article is devoted to the consideration of the issue of the development of US cultural diplomacy in 1953-1961 as a tool for implementing foreign policy. In American historiography, it is customary to describe this period as the "golden age", since there was a significant breakthrough in the understanding of the importance of culture as one of the effective elements of the implementation of US foreign policy. The methodological basis of the article was the principle of historicism, a systematic approach, problem-chronological and descriptive methods. The purpose of the article is to analyze the main types of cultural diplomacy that the USA used to promote itself abroad in the context of the confrontation with the Soviet Union. The article emphasizes the problem of comparing the concepts of "cultural diplomacy" and "public diplomacy", which makes it difficult to understand their organizational histories. The author of the article starts from the position that "cultural diplomacy" is not separate from "public diplomacy" and is an integral part of it. It is emphasized that the development of the Cold War and the Soviet Union's representation of itself as a country with a great cultural heritage and potential posed the question of changing cultural policy before the US government. During the presidency of D. Eisenhower, dance tours, art exhibitions, cinematography, literature, musical performances, educational, scientific and cultural exchange programs were transformed from an element of exclusively American art into instruments of foreign policy. Not the last role in this transformation was played by the US State Department and, created later, the US Information Agency. Although at the same time, both institutions tried to avoid full responsibility for the results of cultural policy implementation. The basis for this attitude was the constant criticism of congressmen (among whom J. McCarthy played a significant and rather harmful role), as well as the focused attention of the American public on the appropriateness of using the money of American taxpayers. The article refutes the thesis that art in the United States was outside of politics and proves that culture has been in step with the US foreign policy course. Nevertheless, despite a number of obstacles and state control, the cultural diplomacy of D. Eisenhower's time appeared in other colors and really became its "golden period".

Book Reviews

Book Reviews

Investor Taxes and Option Prices

ABSTRACT We examine whether tax-sensitive investors play a significant role in options markets by examining whether option prices reflect investor taxes. Existing empirical option pricing literature ignores taxes. We exploit a unique setting where “index” options on the S&P 500 Index (SPX) and nearly identical “non-index” options on the exchange traded fund (ETF) tracking the S&P 500 Index (SPY) face different tax treatments. We find that higher investor taxes reduce option prices, indicating tax capitalization in options. We find consistent results when analyzing options around the investor tax changes enacted by the American Taxpayer Relief Act (ATRA) of 2012, and for options on stock indices other than the S&P 500 (e.g., Russell 2000). Altogether, our findings provide new evidence of an additional item—investor taxes—influencing option prices, suggesting that tax-sensitive investors play a non-trivial role in options markets and that taxes warrant consideration in broader options research. Data Availability: Data used in this study are available from public sources identified in the paper. JEL Classifications: H24; G12.

Redesigning the Affordable Healthcare Program in the Context of Economic Market

Repealing and replacing the Affordable Healthcare Act 2010 (Obamacare) was one of the most controversial issues during and after the U.S. 2016 presidential campaign. The importance of the issue bears on searching for the generally acceptable healthcare program to the American taxpayers. Before the passage of the Act, the United States was the only advanced nation that did not provide affordable healthcare insurance for its citizens. The recognition of the uninsured millions’ healthcare plight, the rising cancellations and premiums of the private insurance policies, and the high healthcare costs led to the Act’s passage.

Bars Behind Bars: Digital Technology in the Prison System

With little opportunity to engage with technology while behind bars, returning citizens are finding themselves on the far side of the digital divide and increasingly vulnerable to recidivism. Investing in a well-run digital literacy program for our prison system is an innovative solution to a persistent problem and a rare win-win situation for inmates, prison officials, and American taxpayers. We begin by discussing how inmate tablet distribution programs mutually benefit both inmates and prison officials. We then explore prison profiteering by technology companies as a potential obstacle to the successful administration of technology programs, discussing the emergence of virtual monopolies in the prison technology space, their history of controversial pricing practices, and how these practices are perpetuated through prison tablet programs. We then present novel insights into how competitive bidding can be used as a public policy instrument to regulate competition, specifically in the context of prison technology. We argue that a traditional bidding framework is insufficient to act as a policy instrument and propose an alternative incentive-based framework toward this end. We conclude by outlining several practical recommendations that prison officials should consider when administering digital literacy programs in their facilities.

Public research funding and pharmaceutical prices: do Americans pay twice for drugs?

In the debate over prescription drug pricing, some pharmaceutical industry critics claim that U.S. taxpayers pay twice for costly therapies, because publicly supported research is a major contributor to drug discovery and American taxpayers are inadequately rewarded for their research investment due to high drug prices. In fact, the empirical evidence supporting these claims is weak, and the pay twice argument distracts from important efforts to ensure that impactful new drugs continue to be developed and made widely available to patients who need them.

Trump’s surprise rebate executive order would affect pharmacists and patients if enacted

Trump’s surprise rebate executive order would affect pharmacists and patients if enacted

Happy 45th Anniversary to the Earned Income Tax Credit. Thoughts on One of the Most Expensive Costing Credits in the U.S. Tax Law

The earned income tax credit (“EITC”) or what was known as the “work bonus plan” was originally enacted as part of the Tax Reduction Act of 1975 (Pub. L. 94- 12). At the time, the law was intended to be enacted on a temporary basis to assist low income families with children. However, over its 45-year history, this credit has evolved and been amended numerous times by different presidential and congressional administrations in efforts to improve it. This article will explore the legislative history of this credit, the original intent, and whether the law has had positive or negative implications for American taxpayers.

A Two-Tiered Charitable Contribution Credit for All American Taxpayers

Abstract This policy memo proposes and simulates the effects of a two-tier, nonrefundable tax credit for charitable contributions. A two-rate credit would expand access to tax incentives for charitable contributions to most Americans and increase charitable giving significantly, with substantial cost savings compared to alternative policy changes.

Public research funding and pharmaceutical prices: do Americans pay twice for drugs?

In the debate over prescription drug pricing, some pharmaceutical industry critics claim that U.S. taxpayers pay twice for costly therapies, because publicly supported research is a major contributor to drug discovery and American taxpayers are inadequately rewarded for their research investment due to high drug prices. In fact, the empirical evidence supporting these claims is weak, and the pay twice argument distracts from important efforts to ensure that impactful new drugs continue to be developed and made widely available to patients who need them.