Congress: Please pass the Dream Act, and comprehensive immigration reform.
Tonight, Fox News will undoubtedly be highlighting the report by the CBO and the JCT that the passage of the Dream Act â€œwould increase budget deficits by $25.9 billion over the 2018-2027 period, boosting on-budget deficits by $30.6 billion and decreasing off-budget deficits by $4.7 billion over that period.â€ At least in part, the calculations are clearly incorrect because the report does not take into account the provisions of the new tax bill.
Hereâ€™s the pertinent portion of the report that deals directly with the tax effects (pages 15-16 of the pdf):
Higher revenues, according to JCTâ€™s estimates, would largely stem from increased reporting of employment income by people who would legally be allowed to work under the legislation. That increase in reported wages would cause increases in receipts, mostly in the form of Social Security taxes, which are categorized as off-budget. In addition, CBO and JCT estimate that an increase in the number of people paying penalties associated with not having health insurance would increase revenues by $0.7 billion over the 2018-2027 period.
Those increases in revenues would be mostly offset for two reasons. First, increased reporting of employment income would result in increases in tax deductions by businesses for labor compensation, including those businessesâ€™ contributions to payroll taxes. As a result, corporations would report lower taxable profits and pay less in income taxes. Noncorporate businesses, such as partnerships and sole proprietorships, also would report lower taxable income, which would decrease individual income taxes paid by the partners and owners. The decrease in income tax receipts would total $3.8 billion over 10 years. Second, CBO and JCT estimate that there would be a $1.2 billion decrease in revenues over the 2018-2027 period associated with increases in the nonrefundable portion of the premium assistance tax credit provided through the health insurance marketplaces established under the Affordable Care Act.
The new tax bill would increase the bottom line cost because it does away with the heath insurance penalties (an increase of $0.7 billion), but decrease the bottom line cost because, by lowering the tax rates on businesses, the tax decreases the $3.8 billion that the CBO/JCT estimates will be lost if the Dream Act is past due to increased business tax deductions.
Going one step further, the CBO/JCT estimates that the Dream Act will cost the federal government $11.8 billion in subsidies for health insurance purchased through the marketplaces. (Pages 10-11 of the pdf.) Of course, this assumption is incorrect, since it does not factor in the reduction of the subsidies anticipated as a result of the tax bill.
Finally, the report anticipates that passage of the Dream Act â€œwould increase outlays for the . . . child tax credits, which are refundable, by $5.5 billion over the 2018-2027 period.”Â (Page 12 of the pdf.) Of course, this is now incorrect since the tax act first increases the amount of the child tax credit, but then lowers the threshold when it phases out.
I will update this posting when I can get better numbers from the CBO on the tax bill. Suffice it to say, however, the headline numbers on the CBO/JCT report on the Dream Act are simply wrong.
What statisticians call Type 1 errors (incorrectly rejecting the null hypothesis) and Type 2 errors (incorrectly accepting the null hypothesis) initially arose from signal detection theory: is that blip on the radar screen a signal or just noise? The two errors were known to us engineers (my former life) as either a false alarm or a missed detection.
But these are not the only statistical errors that can occur. Andrew Gelman proposed two additional statistical errors,Â Type S (confidently stating that a value is positive when it is negative, or vice versa) and Type M (confidently stating that a value is small in magnitude when it is large, or vice versa). They have less to do with the actual statistics than with interpretation of those statistics.
In furtherance of Gelman’s extension of statistical errors,Â I’d like to propose a new one, the Type K error. This is in recognition of the attempt by Kris Kobach (Kansas Secretary of State and vice chair of a federal voter fraud commission) to deny the vote to (at least) Â tens of thousands of US citizens in order to prevent the two or three improper votes (out of millions cast) from occurring. [My numbers may be off, but you get my meaning.]
There have been other manifestations of this “error” in recent days. A report detailing the economic consequences of admitting refugees did not include the overwhelming financial benefitsÂ they provide over the long haul. In other words, the Type K error might be defined as “the deliberate and wrongful act associated with a statistical evaluation of the effect of only one side of a policy.”
Let’s make sure that those who pick our fruits and vegetables, and who cook and serve our food, do not get health benefits.
Oh, I forgot: we won’t have to worry about thisÂ when the wall gets built.
I received this post from a friend:
This morning I received an email from the National Academies Press (see the URL, below) containing both the script of President Trumpâ€™s recent Joint Address to Congress and â€” interspersed at relevant locations â€” copies of various NRC reports from the National Academies containing information, data and recommendations about the many scientific, engineering and medical issues facing our country (and the world).
My friend Jeremy Paretsky – whose sermon on the knowledge of God was posted here some time ago – is now the Sub-Prior (administrator) of a small Dominican Order house in New York. Â A man who works for him – a legal permanent resident of the United States, the father of two natural-born U.S. citizens – just had a deeply troubling experience with Donald Trump’s “unshackled” ICE. He was stopped for no reason other than his appearance, treated rudely, manhandled, held for interrogation for 90 minutes, and finally released without any apology or explanation other than that the stop was “routine”: which implies that it could be repeated at any time.
In the movies of my childhood, the cold-faced men demanding “Your papers, please” had German or Russian accents. Â I preferred it that way.
This event makes me think that whatever the shackles were, they need to be put back in place. Â Fr. Paretsky’s letter to Sen. Gillibrand follows. Â I can provide his contact information to any journalist or lawyer who would like to follow up.
The good news is that Sen. Gillibrand has offered to help. The bad news is that the victim of this outrage – I repeat, a legal permanent resident of this country, who has been accused of no wrongdoing of any kind – is too afraid to allow his name to be used. Â In the United States of America.
Footnote Do you routinely carry documents proving that you’re a U.S. citizen? Neither do I.
Protest march, sponsored by the Jewish Voices for Peace and the Muslim Education Center. Morton Grove, Illinois.
The President’s team had months to prepare this signature immigration initiative. And they produced…an amateurish, politically self-immolating effort that humiliated the country, provoked international retaliation, and failed to withstand theÂ obvious federal court challenge on its very first day.
Given the despicable nature of this effort, I’m happy it has become a political fiasco. It also makes me wonder how the Trump administration will executeÂ the basic functions of government. This astonishing failure reflects our new President’s contempt for the basic craft of government.