Brookings Institution – Page 3

Two Different Worlds…

Some of you reading this post may remember an old love song–I believe it was sung by Nat King Cole–in which he rejected warnings by an unidentified “they,” to the effect that he and his love came from “two different worlds.” At the end of the song, he promises that their two different worlds will be one.

I’d say their chances were better than those of contemporary Republicans and Democrats.

Over the past few years, a steady stream of research has documented the growth of America’s partisan polarization. Today’s Republicans and Democrats would be more upset if their children married someone of the other party than if they married someone of another race or religion. Facebook and Twitter conversations are filled with expressions of incomprehension (WTF!) of positions taken by the other party.

Now, the Brookings Institution has come up with another indicator that Rs and Ds really do live in “two different worlds.” The researchers were exploring one of the thorniest issues raised by “school choice”–whether, as many of us worry– parents opting for privatized schools see education as a consumer good rather than a public good, thus privileging the inculcation of personal skills over democratic ones.

In holding schools more directly accountable to parents, school choice reforms reduce the influence of the democratic structures and processes that govern traditional public schools. For example, being more responsive to parents generally means being less responsive to school boards. This can have important implications if parents’ desires for their own children’s schools differ from the broader public’s desires for its education system. For instance, schools may look different under school choice reforms if—as is often argued—parents are preoccupied with getting their own children ahead, wanting schools to prepare their children for college and career success at the expense of serving more collective interests for social, political, civic, and economic health.

Questions about how parents’ and the public’s desires for schools differ are among the richest questions surrounding school choice reforms. They are also among the least explored empirically. We recently released a study looking at what parents and the public want from schools. Instead of finding the parents-public distinction we expected, we found a Democrat-Republican contrast we had not considered.

The results were very different from the researchers’ expectations. Parents and the broader public prioritized the same goals–a balance between the personal and the public.

Given these similarities, we wondered who—if anyone—is particularly drawn to “private success.” Did any subgroup of respondents want schools to prioritize students’ private interests over more collective, societal interests?

We ran a logistic regression model to examine which, if any, respondent background characteristics were associated with choosing “private success” as the most important goal. We included all of the usual respondent characteristics in the model: gender, race, ethnicity, educational attainment, age, political affiliation, and parent status. Only one was a significant predictor: Republican respondents were much more likely than Democratic respondents to want schools to prioritize “private success.”

It’s a shame there are no earlier studies that might serve as benchmarks, allowing us to see whether and how these and other attitudes prevalent in today’s GOP differ from those of previous Republicans.

In any event, the pressing question we face now is how to make those “two different worlds” into one–or at the very least, make them overlap.

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Explaining Why “It Depends”

These days, commenting on public policy and the political environment is a mostly depressing slog through various bigotries, misunderstandings, inadequate communications—in a nutshell (and boy, sometimes it is a “nut” shell!), a hot mess.

When I look for an explanation, a common thread that might shed some light on the place we find ourselves, I keep coming back to the unsettled, fragmented and frequently unreliable sources from which Americans get our information, and the seeming loss of what we used to call the journalism of verification.

Obviously, the information landscape is not wholly responsible for all of our various crises of governance, but it sure is implicated in much of it.

The Brookings Institution recently issued a report on the importance of what it called “explanatory journalism.” After noting the wealth of information now available online, and the fact that the internet has enabled unprecedented access to millions of people who didn’t previously have such access.

The digital revolution has laid waste to the 20^th century business models of news reporting and publication but even in these early days of the digital revolution, citizens seeking information about politicians, public policy, and government performance have resources never before imagined.

But that, of course, raises the pertinent question:

But how many such model citizens take advantage of these resources to exercise the popular sovereignty and democratic accountability at the core of our democracy? Most citizens are inadvertent consumers of news about politics and government, limited mostly to local television news dominated by crime, traffic and weather, with mere snippets of news related to public affairs, along with emails from family and friends forwarding materials that sound plausible but often are the opposite. Their lives are filled with responsibilities and interests that draw their attention away from election campaigns and policy battles. What little they know and learn about politics is often laden with misinformation and provides little basis for coming to public judgment beyond group identities, tribal loyalties and fleeting impressions of candidates and officeholders.

What citizens know ultimately depends upon the credibility of the information sources they access. If my students are any indication, most of us lack skill in evaluating such credibility–and the opinions of assorted “crazy uncles” and radio shock jocks suggest that a substantial number of Americans are uninterested in information that contradicts their preferred world views.

The results aren’t pretty. These paragraphs from the report say it better than I could:

American democracy has come under severe strains in recent years. We’ve seen a precipitous decline of trust in its central political institutions, the radicalization of one of its two major political parties, a vehement oppositional politics in Congress that has turned divided party government into a graveyard for nominations, while turning legislative initiatives and congressional oversight into little more than a weapon of partisan warfare. All of this has been capped off with the emergence of a frontrunner for the Republican presidential nomination uniquely miscast for the office whose election would constitute a threat to American democracy and make a mockery of the U.S. leadership position in the world.

The roots of America’s dysfunctional politics are deep and complex. For our purposes here, it is sufficient to say that the media has done little to help the public understand what is amiss. An aggressively partisan talk radio, cable news, web and social media community has fueled a tribal politics that traffics in lies and conspiracies. The mainstream media has handcuffed itself out of fear of charges of partisan bias into antiseptic balanced treatment of both sides in spite of their obvious asymmetries. This pattern of false equivalence has served to reinforce a generalized, inchoate public distemper, one that is vulnerable to radical and anti-democratic appeals.

The question is: what can we do about it?

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The Complicated Perquisites of the 1%

It’s amazing what you can learn from research. Recently, the Brookings Institution took note of the oft-made assertion that the corporate tax rate in the U.S. (at 35%) is too high. The usual response is to point out that 35% may be the statutory rate, but many of our largest and most profitable corporations take advantage of tax breaks that substantially reduce–or even eliminate–federal taxes.

This report, however, looked at a different issue.

Corporations used to be the dominant form in which business was done. Partnerships and other “pass through” entities–so named because the income “passes through” and is taxed as the partners’– were far fewer. In 1980, only 20.7% of all business income was earned by pass-through entities; in 2011, the share had grown to 54.2%.

So a band of number-crunching economists at the U.S. Treasury and some academic partners, with access to far more data than outside researchers can see, set out to answer two simple questions: Who is getting all this partnership income? And what tax rate do they pay? They offered their answer Thursday in a paper presented at a National Bureau of Economic Research conference in Washington.

The findings are significant. And troubling.

*Pass-through business income is even more concentrated among the richest Americans than traditional corporate profits. “Overall, 69% of pass-through income earned by individuals accrues to the top-1%. Corporate income is similarly concentrated, but other business income (typically considered very concentrated) is substantially less concentrated.

* The average federal income tax rate paid by individuals who report pass-through business income was 19% in 2011. In part, that’s because so much of that income is considered capital gains or dividends, which are taxed at preferential rates.

* Across all business entities except for sole proprietorships, the average tax rate of U.S. business income in 2011 was 24.3%, they estimate. That’s lower than is often assumed in debates over corporate tax reform.

* “The migration of business activity out of the C-corporate sector and into the pass-through sector has likely substantially reduced U.S. tax revenue,” the economists conclude. If pass-through activity had remained at the (low) level of the 1980s, then the average tax rate on total U.S. business income in 2011 would have been approximately 28% rather than 24%, and tax revenue would have been at least $100 billion higher.

Who was it who used to say “A billion here, a billion there–pretty soon, you’re talking real money”?

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