? Johnston: States Bet on Gambling to Raise Revenues | Main | Common Control and the Delineation of the Taxable Entity ?
April 2, 2012
Galle: Federalism and Unemployment Insurance Financing
Brian D. Galle (Boston College), Myopia, Fiscal Federalism, and Unemployment Insurance: Time to Reform UI Financing:
As commentators and Congress have recognized, the U.S. system of financing its unemployment insurance program is seriously dysfunctional. Extant reform proposals, however, do not fully diagnose the causes of current failures. In particular, other commentators neglect the role of fiscal myopia in state officials? failures to save for future UI needs. For instance, reformers mostly propose offering rewards or penalties that will take effect only far in the future. These incentives have only small effects on myopic officials.
I show here with a simple model of time-inconsistent preferences that alternative mechanisms (detailed herein) that would offer immediate incentives would be considerably more cost-effective. This result also implies that the chance to forgive current state debts to the federal government represents an irreplaceable opportunity to leverage ex ante incentives; Congress should not forgive these debts without demanding significant state progress towards future stability.
April 2, 2012 in Scholarship, Tax | Permalink
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c4eab53ef0167648905f0970b
Listed below are links to weblogs that reference Galle: Federalism and Unemployment Insurance Financing:
Comments
Post a comment
naacp glen campbell jerusalem artichoke bud shootout aretha franklin stevie wonder new orleans weather
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.