In the most recent U.S. data, investments and businesses constituted 82% of income for the top 0.01% of income earners, compared to just 7% for the bottom 80% of households. Because wages face heavier taxation than capital income, the tax share of income paid by the very highest-income households is often lower than for middle-class households. William Gale and Semra Vignaux describe four reforms that could redistribute the tax burden to the wealthiest Americans.
While the actual cost of college for students has declined in recent years, lower- and middle-income students still often must pay more than they can afford. This creates a “funding gap” between what students can afford to pay and what it costs universities to educate them. Philip Levine argues that increased federal funding is the best way to fill that gap, although added regulation and improved price transparency will be necessary.
Pharmacy benefit managers (PBMs)—entities that administer prescription drug insurance benefits—are currently attracting considerable critical attention from policymakers, with new bills released from several committees. Matthew Fiedler, Loren Adler, and Richard Frank explain that while some PBM reforms currently being considered are worthwhile, achieving large reductions in prescription drug costs will require approaches that look beyond PBMs.
