We present a framework for the analysis of tax and benefit policy in countries with significant informality. Our framework allows us to jointly analyse the effects of various taxes and benefits on incentives for firms and workers to be informal and evade taxation. We find that payroll taxes and targeted minimum income guarantees targeted to households without formal employment are particularly harmful to labour formality and participation in the modern sector labour force. Conversely, Bismarkian benefits targeted to formal sector workers and basic benefits targeted to low income households represent the least distortionary way to redistribute. Attempts to use holes in the VAT to “protect” the poor are generally ineffective and open the avenues for rent seeking. We also find that a uniform value added tax and a corporate income tax represent the least distortionary way to raise revenues. The information generated from a simple VAT can be used, given the appropriately designed tax administration, to enhance the probability of detection of informal activities. Distributional issues are best handled by social policy measures and the personal income tax. Indeed, given the gainers and losers from tax reforms, social policies and intergovernmental transfers will be needed to ensure the political acceptance of the reforms. The precise mix of taxation and social policy will vary given different country characteristics and institutional

Chris Gilson looks at the best in political blogging from the Beltway and across the States. Countdown to shutdown This week began with the threat of a government shutdown over the budget looming large. On Saturday, the budget battle gives Via Meadia opportunity to look at the relative power of the House of Representatives compared to that of the White House, saying that, at least theoretically, it is closer to public opinion and therefore should be more powerful. As budget negotiations continued through the weekend, Wonkblog looked at the Republican demand for a repeal of Obamacare’s medical device tax, writing that despite the claims of the medical industry that the tax is killing jobs, the Democrats were not likely to budge on it.

On the 5th of November, Virginia goes to the polls to elect a new governor. Victory now seems almost certain for the Democratic candidate Terry McAuliffe, who holds a significant polling lead over his Republican rival, Ken Cuccinelli. Samuel Blyth argues that this likely election outcome, in what had previously been a state with Republican leanings, illustrates the importance of the demographic changes currently underway in America that are likely to leave the Republican party increasingly out of touch with mainstream voters. A heavy defeat for Cuccinelli may be enough of a wakeup call for the GOP for it to begin a move back towards the political centre.

Chris Gilson looks at the best in political blogging from the Beltway and across the States. The rollout of Affordable Care After the end of the government shutdown last week, attention turned towards the rollout of health insurance exchanges as part of the Affordable Care Act (Obamacare). As the week begins, Via Meadia says that the main concern is whether or not enough young adults will sign up for insurance, something that is very important for the sustainability of the system. Meanwhile, The Foundry says that Obamacare is a threat to marriage, as it provides less support to married couples than those who are cohabiting.

Transportation is a vital sector of the U.S. economy based on consumers’, firms’, and government’s enormous expenditures in money and time and on its effect on virtually all other sectors in the economy. Clifford Winston assesses the performance of the transportation system and considers how it could be improved by analyzing whether the United States has the optimal mix of public and private provision. The empirical evidence indicates that our hugely important transportation system has been compromised by various government policies and the significant welfare costs motivate either vastly improving public provision or expanding the role of the private sector.

Chris Gilson looks at the best in political blogging from the Beltway and across the States. Government shutdown and the debt ceiling This week, the U.S. government shutdown continued along with the continuing threat that the country might reach, and exceed, its debt limit on the 17th. On Saturday, The Hill’s Congress blog says that the shutdown has opened up a larger debate about the role and size of the government, and may have provided a ‘roadmap’ for identifying taxpayer funded programs and services that Washington could potentially live without. On the other side of the debate, Crooks & Liars has five charts that show why the US does not have a debt crisis. Meanwhile, Doug Ross has five reasons why the GOP will win the shutdown. On Sunday, Outside the Beltway reports that negotiations in the Senate to open the government and raise the debt ceiling had stalled because of the Democrats’ new focus on the 2011 sequestration cuts.

Chris Gilson looks at the best in political blogging from the Beltway and across the States. Affordable Care The controversy over President Obama’s previous claim that people would be able to keep their health insurance under the terms of the Affordable Care Act (which turned out to be false) continued this week. After last week’s apology by the President for his earlier (now seemingly broken) promise, The Foundry looks at the three more apologies he may soon be making on Obamacare. Wonkblog blames former President Bill Clinton for Obama’s broken promise, writing that Clinton’s failed reforms of the 1990s would have taken away most people’s insurance plans, and that the current administration tried to claim the complete opposite about the current healthcare plan as a result. Meanwhile, Hit & Run looks at how bad the problems with Obamacare’s rollout might get, especially if the exchanges continue to malfunction. Their answer? A whole lot worse. Red State says that Obamacare is drawing con-men ‘like flies’, as some try and capitalise on the failing Healthcare.gov site by offering their own fraudulent alternatives. Roll Call is more cautious, arguing that, given many start-up companies often experience technical issues...

Robert Skidelsky is Emeritus Professor of Political Economy at the UK’s University of Warwick and the biographer of John Maynard Keynes. His new book, co-authored with his son Edward Skidelsky and entitled How Much is Enough?: Money and the Good Life, brought him to the LSE for a public lecture. In this interview, he discusses economic insatiability and ‘the good life’ with Joel Suss, editor of our sister blog, British Politics and Policy at LSE.

The gender integration of the U.S. Armed Forces has been an ongoing process since the establishment of the All-Volunteer Force in 1973. In light of the removal of the ban on women in direct-combat positions, Saskia Stachowitsch examines the changing media depictions of military women, arguing that these representations vary with the military’s need for female soldiers, as well as geopolitical conditions.

Chris Gilson looks at the best in political blogging from the Beltway. Our state blog round up will follow tomorrow afternoon. Roll-out of Affordable Care The controversy over President Obama’s flagship health reform the Affordable Care Act (also known as Obamacare) continued this week. On Saturday, The Foundry takes a close look at how Obamacare affects all Americans, saying that not only will it raise healthcare costs for many, but it will also burden future taxpayers with greater spending on insurance exchanges and Medicaid. American Thinker points out that the ‘yes we can’ generation of young people that supported Obama are unlikely to say ‘yes we will’ to Obamacare’s higher premiums.

Chris Gilson looks at the best in political blogging from the Beltway and across the States. Affordable Care and Healthcare.gov difficulties The big story for much of the past week has been the on-going difficulties with the Obama administration’s website designed to help people sign up for healthcare insurance as part of the Affordable Care Act. On Saturday, Paul Krugman looks at why Obamacare is so complicated, saying that the system is essentially trying to simulate the results of a single-payer system, but must do so whilst keeping private companies in the mix. On Sunday, Doug Ross lists 25 of the best quotes explaining the Obamacare website’s ‘glitches’ from across the media and politicians. Crooks & Liars says that media are doing what they do best – making people panic with scare stories about Obamacare.

With only two major political parties in the country, both the Republican and Democratic Party face the challenge of unifying ideologically diverse constituencies around a single presidential candidate. Using social network analysis, Andrew Dowdle and Song Yang inspect the behavior of individual donors during primary and national elections to examine cohesiveness within the two parties. Their work shows that the Democratic Party tends to be more unified compared to the Republican Party, even in years when it lost the overall election.

USApp Managing Editor, Chris Gilson, looks at the best in political blogging from the Beltway. Our round-up of state blogs will follow on Saturday afternoon. Affordable Care As Thanksgiving week began, the administration’s difficulties with the rollout of Affordable Care (Obamacare) still loomed large in blog commentaries. On Saturday, Wonkblog takes a close look at how all the U.S. states stack up in terms of Obamacare enrolment. They find some huge disparities; for instance, while California (which has a state exchange) has signed up over 80,000 people, Oregon’s figure is zero. The New Yorker takes an in-depth look at President Obama’s travails over the healthcare reform’s roll-out, saying that this time, his brand alone isn’t enough to preserve his legislative achievement of Affordable Care – he will have to fight state to state.

The recent government shutdown and political gridlock that has gripped Washington DC has led to many calls for Republicans and Democrats to move beyond politics. David Brian Robertson looks back to The Federalist, which he argues offer us lessons in how to break that gridlock. He writes that The Federalist shows us that we need to embrace politics because it is the force that drives government through negotiation and compromise.

American political theorist Benjamin Barber has proposed a greater role for mayors in global governance, reflecting the many ways in which cities are dealing with global issues. Alex Marsh examines the proposal and considers how the form of legitimacy enjoyed by elected mayors differs in important ways from that of national governments. How should a world characterised by increasingly complex interdependence be governed? If most of the major challenges we face have no respect for the artificial borders marking out nation states, how can we identify and deliver effective solutions?

USApp Managing Editor, Chris Gilson, looks at the best in political blogging from the Beltway. Our round-up of state blogs will follow on Saturday afternoon.

Voter turnout is a perennial concern for political scientists and politicians alike. Even with extensive campaigns to “get out the vote,” turnout for most elections lingers around half of the eligible population. Aaron C. Weinschenk examines the idea that the propensity to vote is influenced by deeply rooted personality traits that cultivate a sense of civic duty. He finds that a number of the “Big Five” personality traits, Conscientiousness, Extraversion, Agreeableness, and Openness, are positively correlated with a perceived duty to vote.

USApp Managing Editor, Chris Gilson, looks at the best in political blogging from the Beltway. Our round-up of state blogs will follow on Saturday afternoon.

USApp Managing Editor, Chris Gilson, looks at the best in political blogging from the Beltway. Our round-up of state blogs will follow on Saturday afternoon.

The years after 2001’s September 11 terrorist attacks have seen revived interest in the fictional superhero genre, most noticeably in film. Annika Hagley and Michael Harrison take a close look at one of the most popular and successful iterations of this genre, Marvel Comics’ Avengers’ series. They write that each character in the multi-billion dollar film franchise represents a distinct identity or behavior with which the United States has been struggling to reconcile itself, while collectively the film series represents the reactions of a nation to a direct, domestic attack.