A flat tax? Fair for who?

The idea of replacing a graduated income tax structure – where the highest rates apply to the highest incomes – with a “flat tax” has gained momentum in some states, with Georgia and Iowa scheduled to adopt a flat rate in coming years. Supporters of a flat tax argue that it’s fair to charge every taxpayer the same rate. But a new report by Eli Byerly-Duke and Carl Davis of the Institute on Taxation and Economic Policy explains how flat taxes often mean higher taxes for middle-income households and a tax cut for those at the very top. 

Flat taxes usually bring lower tax bills for high-income households and, because of that, they produce less revenue than graduated taxes during times of rising inequality. For most families, however, there is nothing inherently “low tax” about flat taxes. In fact, flat taxes often actually result in higher overall taxes than other tax structures. ITEP’s most recent comprehensive study of state and local tax codes found that the middle 20 percent of individuals and families in states with flat rate taxes paid on average 2.9 percent of what they earn in income taxes. In states with graduated-rate taxes, by contrast, that figure is just 2.3 percent.

BESE caves on early learning standards
Members of the state Board of Elementary and Secondary Education caved to conservative pressure on Tuesday and will now review previously approved early learning standards for the third time. The opposition stems from fears, unsupported by facts, that the new standards’ emphasis on social and emotional learning—a framework for helping children manage their emotions and maintain positive relationships with others—might expose young Louisianans to information about the state’s history of systemic racism. The Advocate’s Will Sentell reports: 

(The standards) outline how young children should develop, including literacy, and cognitive and physical growth. Libbie Sonnier, executive director of the Louisiana Policy Institute for Children, led the panel’s work. But Sonnier said Tuesday it makes sense for the group to revisit the issue and scrutinize concerns raised by the nearly 600 residents who commented. She said doing so may bring up topics “that may not have come up through the year-long review process and the dozen or so public meetings held over the past two years.”

Black maternal mortality health crisis
Pregnant Black women in America are dying at a higher rate than their white counterparts because of substandard care and racial bias. In 2020, the maternal mortality rate for Black women was 55.3 deaths per 100,000 live births compared to just 19.1 deaths per 100,000 live births for white women. But there’s an effort to combat this deadly trend via funding from last year’s $1.7 trillion Inflation Reduction Act. The New York Times’ Erica L. Green reports on a St. Louis non-profit that is offering benefits to Black mothers that were previously only associated with wealthy white mothers. 

By providing the doulas, who offer nonmedical support to mothers before, during and after delivery, the program is extending a benefit largely associated with white and affluent women to predominantly Black, low-income mothers in St. Louis who would not otherwise know about it or be able to afford it. Unlike certified nurse midwives who deliver babies, doulas offer guidance on pain or complications ahead of delivery and help clients navigate hospitals and doctors — exactly the problems that Kelly experienced. Continuous guidance from a doula has been cited as one of the most effective interventions in easing pregnancy.

New model for rural hospitals
While rural hospitals provide access to life-saving medical care to people in small towns across the country, people in these areas are in jeopardy of losing this crucial access as their hospitals struggle to stay open because of financial woes. A sweeping government funding bill passed last December included a new payment model to help rural hospitals survive, but it came with a caveat:  It required these hospitals to give up their inpatient services. The Washington Post’s McKenzie Beard and Rachel Roubein report: 

Historically, Medicare has required hospitals to furnish inpatient services to keep their hospital status and the reimbursements that go along with it. The new model is designed to preserve some access to care in communities where rural hospitals wouldn’t otherwise be able to survive by converting them into a new type of stand-alone emergency room and outpatient service center. “This is an attempt to be more than a primary care clinic but less than an inpatient facility,” said George Pink, deputy director of the North Carolina Rural Health Research Program. The model “has been urged by the rural health community for a long time, but without these specific details.”

Footnote: Most rural hospital closures have happened in states that did not expand Medicaid. Louisiana has not seen any rural hospitals close since the health insurance program was expanded to cover low-income adults in 2016. 

Number of the Day
28% – Percentage of Americans making less than $50,000 per year whose expenses outweighed their income in December, compared to 21% last year. While built-up savings helped keep consumer spending up despite increased inflation, these savings are now depleted for many and paychecks haven’t kept up with inflation. (Source: Axios)