FEBRUARY 2, 2012

Yes, Welfare is for Poor People

The Department of Public Welfare announced its plan to impose an asset test for food stamp recipients. The proposal would limit food stamps to most households with under $5,500 in assets, or $9,000 in assets for anyone over age 60 or with a disability (see below for clarification of "assets").  Elizabeth and Jay wrote on the merits of asset testing last week.

In a Capitolwire (subscription) piece, Rep. Mike Sturla lashes out at the administration's policy saying,

"We're going to take the concept of the safety net and flip it and tell people they have to impoverish themselves before they get the benefits."

Just to make sure I wasn't misunderstanding the outspoken representative, I Googled the definition of impoverish and came up with "To reduce to poverty; make poor."

Indeed! Welfare programs like food stamps were designed to help poor people, and the administration's policy will work to ensure it serves only poor people.

Here is another important bit of information in the Capitolwire piece, namely, what isn't counted as "assets" under the standard:

• Homes and surrounding land and buildings which are not separated by property that is owned by others;
• A home temporarily unoccupied because of employment, training, casualty, illness or natural disaster if the household intends to return;
• A second home if it is up for sale;
• A lot on which a household which currently does not own a home intends to build a permanent home;
• Personal effects and burial plots (clothing, jewelry, gift cards);
• Household goods;
• Life insurance and pension plans;
• Income producing property and equipment;
• One vehicle per household, vehicles under $4,550 in value and any vehicles used to generate income;
• Government payments;
• Inaccessible resources (e.g. frozen bank accounts);
• Installment contracts;
• Resources previously prorated as income;
• Non-liquid resources with liens;
• Disaster and emergency assistance payments;
• Certain government resources such as tax refunds, federal child tax credits, earned income tax credit, WIC, and education assistance;
• Indian funds and lands;
• German reparation payments;
• Education savings accounts;
• Family savings accounts; and,
• Seed accounts.

posted by NATHAN BENEFIELD | 02:25 PM | 0 comment

JANUARY 31, 2012

Corporate Welfare Not Needed to Get a Cracker

The Pittsburgh Tribune-Review reports that Pennsylvania lawmakers are pushing a special tax deal to attract a "cracker" plant to the state. The proposed Shell cracker—which breaks down natural gas into ethylene, used in plastics—has been much talked about, with the Keystone State reportedly a finalist with Ohio and West Virginia. The plant would create thousands of jobs, at least by internal estimates.

The proposal would expand Keystone Opportunity Zones, exempting certain businesses from taxes (primarily targeted to the cracker). What's wrong with a KOZ? Well for one thing, tax breaks for a few require higher taxes, spending being equal, on all other businesses. Further, a Legislative Budget and Finance Committee report finds that the KOZ program has little accountability, and the promised jobs often failed to materialize. Most importantly, tax breaks and corporate welfare don't actually generate economic growth, they simply shift resources.

Rather than expanding corporate welfare, here is what lawmakers need to do to make Pennsylvania more attractive:

• Enact a natural gas policy that removes the political uncertainty stemming from the Frack Attack, and provides predictability for the gas industry.
  
• Improve Pennsylvania's business climate for all businesses. Indeed, lawmakers should take the lesson from the Keystone Opportunity Zones—that businesses are attracted to lower taxes—and apply it statewide.

posted by NATHAN BENEFIELD | 01:31 PM | 0 comment