Economic Policy

Exploration of the intersection of policy and economic trends, public finance, and economic development

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IGPA Experts use cutting edge social science research methods to analyze public policy. Our independent evidence and analysis is non-partisan, data-driven, and based in the best academic scholarship available.
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Alternatives to Cook County's 7 percent cap on assessment increases

Authors

  • Daniel P. McMillen

Following large run-ups in residential property values, a recent Illinois law allowed Cook County to cap increases in homeowners’ property tax assessments. The cap expires soon and is up for renewal. One consequence of an assessment cap is a shift in tax burdens from some taxpayers to others. We examine the cap and a number of alternative policies that might achieve the benefits sought by its proponents with fewer negative side effects.


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The effect of demographic change on state and local government budgets

Authors

The impact of an aging society on fiscal institutions has garnered consider-able attention of late, mostly in connection to the federal Social Security program. In the budget year of 2005, federal government spending on Social Security, which provides old-age, survivors and disability insurance, accounted for 4.2 percent of total GDP. If nothing is done to cut the cost of the program, by 2050 it will consume 6.4 percent of GDP.


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Does environmental protection hurt low-income families?

Authors

  • Daniel H. Karney

Policies for environmental protection impact the lives of all U.S. citizens by regulating pollution, imposing costs, and influencing economic decisions. Common examples range from municipal trash disposal to federally mandated Corporate Average Fuel Economy (CAFE) standards for automobile fuel efficiency. Other notable environmental policies include the Environmental Protection Agency’s Acid Rain Program to reduce sulfur dioxide (SO2) emissions from domestic power plants and the much discussed but not yet enacted idea of a program to reduce greenhouse gas (GHG) emissions.


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Minimum wages and employment In Illinois

Authors

Whether minimum-wage policies are more or less effective than other policies to support families’ incomes has been the subject of debate for several decades. Advantages of the minimum wage are its philosophical appeal and its relative simplicity of implementation. In addition, there is no explicit and readily available accounting of the cost of the minimum wage. For instance, politicians do not have to raise revenue to fund it.


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Questions for policymakers and citizens about proposals for greening the economy

Authors

  • Andrew P. Morriss

In an effort to solve two problems at once, governments at all levels have been looking to “green investment” proposals, intended simultaneously to produce economic growth and reduce environmental problems.


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Why is property tax so unpopular?

Authors

  • Nathan Anderson
  • Daniel McMillen

For local governments the property tax has long been a reliable source of significant levels of revenue. Yet, perhaps more than any other tax, the property tax has also long been the source of widespread discontent. In a recent paper, Anderson and Pape (2010) argue that uncertainty and confusion are the main sources of this antagonism toward the property tax. Uncertainty arises in part because property taxes generally rise as property values increase, making it possible for a household’s taxes to rise significantly even as its income holds steady or even falls.


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Green taxes

Authors

  • Daniel H. Karney

In general, green taxes are taxes either directly on pollution emissions or on goods whose use causes pollution. In the revenue-raising context, the basic argument for green taxes can be summarized by the adage: “tax waste, not work.” Taxes on labor income discourage workers from engaging in productive activities, and thus hurt society. Taxing waste, by contrast, discourages harmful pollution, and thus benefits society. In addition, the revenue raised from these green taxes can help mitigate the state’s fiscal crisis.


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Don't bank on it

Authors

  • Cedric Herring
  • Loren Henderson

In today's difficult economic climate, small businesses are experiencing many challenges in securing credit to fund their operations. Most lenders are conservative in granting business loans. Yet minority and women business owners may face additional hurdles. Herring and Henderson's research, discussed in Policy Forum, found that despite protections against unlawful discrimination under the Equal Credit Opportunity Act, women and minority applicants are more likely than other applicants to be denied loans or receive less favorable terms due to their race and/or gender.


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Robert Resek served as University Vice President for Academic Affairs from 1988 to 1995 where he was chief budget officer, and senior academic officer for the University. Resek focused his research as a professor on technical progress, investment behavior, the demand for money, risk analysis and regional economics. This research was funded by the National Science Foundation, the Social Science Research Council, the US State Department, the Illinois Chamber of Commerce and the Illinois Board of Higher Education. In 1977 he became director of the Bureau of Economic and Business Research of the University where he published a quarterly Illinois Economic Review, an annual economic outlook and a statistical abstract of Illinois. As an advisor to Governor Jim Thompson, he organized a conference and book, The Midwest Economy: Issues and Policy. During his tenure, the bureau significantly expanded its role in analyzing the state economy including the development of significant forecasting capability for the state economy and state revenue.   He was active in the Association of University Business and Economic Research where he served as director, vice president, and president.

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Expertise:

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Julian Reif’s primary area of interest is health care economics, with a current research focus on the value of health and the effectiveness of social insurance programs. One of his recent papers argues that the societal value of medical technology is significantly larger than has previously been recognized, especially with respect to medical treatments for severe diseases. The paper also shows that medical treatments act as a form of insurance. Consequently, medical innovation policy can have a large impact on reducing health risks. Another recent paper finds that Medicare Part D, a prescription drug program for the elderly established by the Medicare Modernization Act of 2003, successfully reduced mortality following its implementation. He also studies energy and environmental policy, such as the gasoline tax, air pollution, and carbon emissions. His recent work in that area includes estimating the effect of air pollution on mortality, medical utilization, and healthcare costs. He finds that the reduction in air pollution over the past twenty years reduced elderly mortality, generating significant social benefits.