Sunday, May 31, 2026

New report offers solutions for the disparity between how mutual funds and ETFs are taxed

US Tax code treats the two investments very differently

Brookings Institution

More than half of all American households own a mutual fund or an exchange-traded fund (ETF), according to a recent survey. Over the past several decades, ownership of these investment products has become common. In many ways, the two kinds of funds are very similar. Both combine money from many people to invest in a broad group of stocks, bonds, and other assets. This enables investors to spread risk across a portfolio of companies, reducing exposure to any single stock while increasing the chances of making a profit and growing savings.

However, there is a key difference between mutual funds and ETFs. Currently, the U.S. tax code treats the two investment products in very different ways, with the result that investors must pay significantly more taxes on mutual funds than on ETFs. In a new report, Brookings Institution scholar Elena Patel argues that this disparity is unfair, especially for middle- and lower-income investors, who are more likely to put their money into mutual funds rather than ETFs. She also examines strategies to adjust the tax code to level the playing field, making it more fair, straightforward, and efficient.

“Many investors don’t realize that this difference exists,” says Patel, who is co-director of the Brookings Tax Policy Center. “It’s created an uneven playing field for millions of Americans.” She says the current tax code penalizes mutual fund investors, collectively costing them billions of dollars a year in excess taxes. She collaborated on the report with Matthew C. Ringgenberg, a professor of finance at the University of Utah and an expert on mutual funds and ETFs.

The main difference in how these funds are taxed lies in what happens when shares in the fund are sold. When an investor withdraws money from a mutual fund, the fund manager may have to sell some of the underlying assets to generate cash to give to the investor. If the fund’s assets have increased in value since the investor first bought them, this sale triggers a capital gains tax not only for that investor, but for all investors—even those who haven’t sold their shares.

Patel and others argue that this is unfair, because it requires all investors to pay taxes, not only those who have sold their shares. The key issue, she says, is the timing. Both ETF and mutual fund investors will eventually have to pay taxes on their gains, but mutual fund investors must often pay earlier, often years earlier, which can significantly reduce their overall gains. The difference in timing enables ETF investments to outperform mutual fund investments—even when the two kinds of funds hold exactly the same stocks and bonds.

Millions of Americans have long relied on mutual funds as their primary vehicle for diversified investing, particularly for retirement. Ownership of ETFs didn’t become popular until the past two decades, but over that time their use has expanded significantly.

Millions of Americans now own ETFs, and many own both kinds of funds. The two kinds of funds often include the same stocks and bonds, which makes the difference in how they are taxed even more stark. This is even more true because ETF ownership rises sharply as income goes up. Mutual fund ownership, by contrast, is more evenly distributed across all income levels. As a result, the current tax structure for mutual funds and ETFs tends to deliver larger benefits to those with higher incomes.

Several recent legislative proposals have tried to reduce or eliminate this tax disparity. In 2021, Sen. Ron Wyden, D-Ore., introduced a proposal to bring ETF tax treatment in line with that of mutual funds. The proposal was released as a discussion draft but was never enacted. More recently, the bipartisan GROWTH Act has proposed moving in the opposite direction by essentially bringing mutual fund taxation much closer to the way ETFs are treated. Each approach has distinct implications for investors, for market efficiency, and for tax revenues. Some experts worry that taxing ETFs like mutual funds could exacerbate market volatility as well as market downturns. More broadly, eliminating the ETF exemption would mean that ETF shareholders would face the inequity of being taxed even if they don’t sell their shares.

The GROWTH Act would align the tax code so that capital gains are only taxed when individual investors sell their shares of either kind of investment fund. With this approach, funds would continue to pass through interest and dividend income, but an individual investor’s capital gains would continue to accrue until that investor exited their position.

This strategy would improve economic efficiency by allowing investor outcomes to reflect underlying risk and return, rather than the actions of other shareholders. Many European countries already use versions of this approach. One possible disadvantage of this approach, she notes, is that it will shift the timing of tax revenues. While total tax revenues over the lifetime of the investment could be higher due to higher compound returns inside the fund, this revenue would generally not be collected until the individual investor sells their shares. Furthermore, this approach has the potential to significantly reduce government tax revenues, because any profits would be exempted from capital gains taxes if the funds are held until the investor dies.

But overall, Patel says, this option could offer a clearer, more straightforward framework that advances equity, efficiency, and simplicity in the taxation of mutual funds and ETFs.

Method of Research

Data/statistical analysis

Subject of Research

People

Article Publication Date

21-May-2026

Innovative local collaboration can unlock stronger environmental protection in England, study shows

University of Exeter

The use of digital tools and better coordination between different organisations can help the UK significantly optimise its first line of defence against ecological degradation, new research shows.

Unified and local efforts can support a thriving environment and improve community well-being, University of Exeter experts have found.

They hope their blueprint – which proposes tech-driven, community-led action – can rescue local environmental enforcement from funding cuts and jurisdictional confusion.

The study says England’s existing local environmental compliance regimes have the potential to pioneer a powerful, community-led model for nature conservation. By overcoming systemic funding and jurisdictional challenges, regional authorities can successfully transition from reactive enforcement to a proactive culture of environmental stewardship.

Researchers from the Exeter Centre for Environmental Law, at the University of Exeter, and the Earth Law Center focused on Cornwall and the Isles of Scilly to analyse the role of eight public authorities. They found a profound and baseline commitment to environmental protection.

The positive impact of this research is already visible on the ground. Cornwall Council and the Local Nature Partnership have successfully launched a joint public awareness initiative named "Help Protect Our Wildlife and Environment".

The study, published in the Environmental Law Review, outlines an inspiring plan for regional environmental governance. While historic budget constraints and fragmented agency boundaries have occasionally duplicated efforts or created skills gaps, the researchers view these challenges as an opportunity for modernisation and systemic renewal.

Their toolkit encourages the dismantling of traditional regulatory barriers and the fostering of deep collaboration between regulators, businesses, and the public. This includes the revitalisation of Centralised Local Nature Partnership websites to serve as transparent, user-friendly hubs. By offering accessible regulatory databases and interactive jurisdictional maps, these platforms can transform sometimes confusing legal frameworks into clear, empowering guidance for local landowners and small businesses.

The study also advocates for the launch of Unified Reporting Portals, which would allow geotagging and photo uploads, alongside secure anonymous reporting options, to encourage civic participation by helping citizens to become partners in environmental monitoring.

Dr Tiago de Melo Cartaxo, from the University of Exeter Centre for Environmental Law, said: “The environmental challenges we face are complex, but they also offer a catalyst for local innovation. Environmental regulations truly come alive and make an impact when local communities are empowered to adhere to and shape them. By building robust data-driven adaptive frameworks, bridging institutional divides through joint case reviews, and properly investing in workforce development, we can create resilient ecosystems that thrive for generations. The proactive work commissioned by local authorities in Cornwall and the Isles of Scilly shows an estimable commitment to progressive governance, providing a blueprint that can be successfully mirrored right across the UK.”

Co-author Thomas Baycock, also from the University of Exeter, said: “While organisations are incredibly willing and open to sharing data, modern enforcement is often obscured by technological restrictions, uneven data standards, and severe capacity limits. Transitioning to centralised digital repositories and integrating smart sensor technologies will not only alleviate the administrative burden on overstretched staff but will also promote the deep public trust required for genuine collective action.”

The study encourages organisations to embrace a variety of methods of fundraising – such as corporate partnerships, revolving funds from reinvested penalties, and dedicated government grants – to build a highly skilled, fairly compensated, and deeply motivated environmental workforce.

Journal

Environmental Law Review

DOI

10.1177/14614529261447778

Method of Research

Case study

Subject of Research

People

Article Title

Testing the effectiveness of England's local environmental compliance regimes: The case of Cornwall and the Isles of Scilly

Article Publication Date

29-May-2026

Transition to electric vehicles in Brazil and Mexico driven by domestic politics and global pressures, study shows

University of Exeter

Transition to electric vehicles in Brazil and Mexico has been driven by domestic politics and global pressures, a new study says.

Decisions have been made in both countries shaped by factors beyond emissions, costs or efficiency.

In Brazil, this has been the size of the domestic market for EVs and the domestic coalition around bio-ethanol. In Mexico, the change has been more volatile because of a greater reliance on foreign technology and the erosion of reliable access to US markets.

The research, by Renato H. de Gaspi from Johns Hopkins University and Pedro Perfeito da Silva, from the University of Exeter, says Brazil’s EV growth has been driven by commodities, putting the domestically owned primary sector in a privileged position. Domestic demand has provided the manufacturing industry with a large internal market, which also attracts the interest of foreign investors.

The Brazilian government has greater bargaining power with multinational automakers—who dominate production in both countries—than their Mexican counterparts.

In Mexico, by contrast, light vehicle production is overwhelmingly export‐oriented, with 87 per cent destined for foreign markets, constraining policy leverage.

Brazil’s greater flexibility toward foreign investors, combined with the influence of domestic business groups, has favoured decarbonization choices aligned with domestic market needs, such as the prioritization of biofuel‐compatible hybrid vehicles.

Dr Perfeito da Silva said: “Despite facing similar global pressures and structural constraints, the two countries have adopted distinct technological strategies even under administrations led by similar left‐wing parties. In Brazil, this reflects the alignment between long‐standing sectoral capabilities, rural‐urban political coalitions, and the structure of domestic demand. Mexico has followed a technological route shaped by the diffusion of global innovations while navigating a moment of neoprotectionism and mounting uncertainty around what was once a stable, predictable, albeit dependent export‐led model.

“Brazil has prioritized a hybrid‐ethanol strategy grounded in its longstanding ethanol infrastructure and flex‐fuel vehicle fleet. This strategy is a locally adapted response that reflects national constraints, such as the lack of public charging infrastructure.”

“Mexico, in contrast, has pursued a strategy shaped by outside forces. The country’s long‐standing export‐led growth model has been structured around integration with US and Canadian markets. Mexico moved rapidly to expand its capacity in BEV assembly and battery production. While recent governments have sought to increase local content and reduce technological dependency, their ability to do so remains constrained by the logic of dependent integration.”

The vulnerabilities of this strategy have become especially visible. Rising protectionist pressures, such as the threat of tariffs and the phase‐out of key provisions of the Inflation Reduction Act, have introduced a new layer of uncertainty into what was once a predictable and stable external environment. Policymakers have been forced to consider a more proactive role in industrial policymaking without having built the institutional or political foundations for it.

Journal

Politics and Governance

DOI

10.17645/pag.11240

Method of Research

Observational study

Subject of Research

People

Article Title

The Politics of Technological Choice in the EV Transition: Comparing Brazil and Mexico

Fast deliveries worsen conditions for e-commerce warehouse workers

Cornell University

ITHACA, N.Y. – Holding off on that late-night online order of a book, blender or blue jeans could ease the strain on a warehouse worker.

Consumers’ around-the-clock, often impulsive demand for cheap, rapidly delivered products creates harsher working conditions in e-commerce fulfillment centers than in traditional warehouses, according to Cornell University-led research that provides the first comprehensive assessment of e-commerce work in the U.S.

Between Amazon and Walmart, the nation’s two largest warehouse employers, surveys found jobs at Amazon fulfillment centers to be significantly worse – more intense and dangerous – likely driven by the e-commerce market leader’s emphasis on fast delivery.

The findings are cause for concern if Amazon’s practices become the norm, the researchers said – but also show alternative approaches are viable.

“E-commerce heightens the frenzy among retailers to satisfy customers with convenience, speed and cheap prices, offerings that all erode job quality for workers behind the scenes,” said Alexander Kowalski, assistant professor of human resource studies. “This is a problematic trend for a large and growing share of the labor market – but it doesn’t have to be this way.”

Kowalski is the first author of “At the Mercy of the Market: E-Commerce and Warehouse Work in the United States,” published in the ILR Review.

Research about the workers who enable e-commerce has highlighted reasons such jobs may be more challenging: They involve more varied inventory, more intensive labor, less predictable demand and more frequent returns. In response, workers including material movers, pickers, packers and clerks earn low wages and may face unpredictable schedules, monotonous tasks, limited opportunities for breaks, digital surveillance and discipline imposed by algorithms.

The team surveyed about 400 hourly employees representative of the U.S. population of warehouse workers. Some supported e-commerce fulfillment centers primarily reacting to consumer orders, called business-to-consumer (B2C) warehouses; others worked in distribution and sorting centers serving brick-and-mortar stores or manufacturers, called business-to-business (B2B) warehouses.

The results confirmed a “B2C Effect”: Warehouse jobs were challenging on average, but worse at B2C – largely e-commerce – sites. Those workers experienced more pressure to move quickly and avoid taking breaks, greater exposure to unsafe situations and significantly worse overall well-being – a measure of anxiety, burnout and stress – but were not paid more.

“The warehouse segment dedicated to e-commerce offers lower-quality jobs across the board,” Kowalski said. “The results suggest that more time-sensitive pressures related to speedy delivery make for especially low-quality jobs in e-commerce.”

To investigate if those issues were consistent across retailers, the researchers next surveyed warehouse employees at Amazon (1,450 respondents) and Walmart (450 respondents), which respectively accounted for 38% and 6% of U.S. online shopping in 2023.

The results showed Amazon’s fulfillment centers housed the least desirable warehousing jobs. Respondents working in those facilities were more likely to report higher intensity, less opportunity, lower wages, greater unfairness and more challenges concerning safety, well-being and injuries. Walmart’s baseline job was not high-quality but varied little by warehouse type, whereas Amazon’s e-commerce jobs – the majority of its warehouse workforce – were significantly worse than comparable Walmart jobs, the researchers said. The findings suggest Walmart’s emphasis on low prices imposes less burden on e-commerce warehouse workers than Amazon’s focus on delivery speed.

“E-commerce creates downward pressure on work conditions,” Kowalski said, “and Amazon dials it up even more.”

The contrast between e-commerce’s biggest players, however, implies that Amazon’s lower job quality is not inevitable, but flows from its strategic priorities. Improving job quality will require worker movements, regulatory policies, consumer awareness and businesses seeing value in doing things differently, the researchers said.

For additional information, see this Cornell Chronicle story.

Cornell University has dedicated television and audio studios available for media interviews.

-30-

Journal

ILR Review

DOI

10.1177/00197939261444716

Method of Research

Data/statistical analysis

Article Title

At the Mercy of the Market? E-Commerce, Warehouse Work, and Job Quality in the United States

Article Publication Date

29-May-2026

Rwenzori Mountains’ first major fire in 12,000 years marked new era for climate

Penn State researcher who contributed to findings says effects of blaze continue to threaten rare pristine alpine environment

Penn State

Students return from collecting a core sample in a lake in Uganda's Rwenzori Mountains. — image:

Doctoral student Caleb Norville of Penn State and Meredith Parish of George Mason University return from collecting a core sample in a lake in Uganda's Rwenzori Mountains.
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Credit: Courtesy Penn State

UNIVERSITY PARK, Pa. — For the past several years, Penn State geoscientist Sarah Ivory and her students have been among a team of scientists scaling the East African Rwenzori Mountains, collecting sediment core samples from lakes formed at the end of the last ice age as glaciers began receding in the region some 12,000 years ago.

Among those cores was a surprising revelation: A 2012 wildfire that ravaged 16 square miles of the forest and alpine landscapes at more than 13,000 feet above sea level was unprecedented in at least the last 12,000 years. The researchers also found evidence in fossilized pollen that the fire significantly shifted the region’s ecology. Led by Andrea Mason, a doctoral candidate at Brown University, the team recently published these findings in the journal Nature.

The blaze in the alpine moorland surprised forest experts who assumed the climate was too cold and too wet for fires to start and to spread, Ivory said.

Within the cores, researchers looked at the remnants of charcoal to piece together the fire history of the area since the lakes originated. The cores show no fire activity for about 10,000 years. A slight increase in fire activity about 2,000 years ago — coinciding with an increase in human activity in the region — was recorded in a lower elevation lake. In 2012, the amount of charcoal in the cores shot up more than 100 times, aligning with the timing of the blaze at the border of Uganda and the Democratic Republic of Congo, at higher elevation. Researchers also assessed historic pollen records to determine there were dramatic shifts in the region’s ecology over the past 2,000 years as fire increased.

“The fact that this one fire in 2012 is the only fire that’s happened on this mountain for the entire existence of the lake is mind blowing,” Ivory said. “It’s like the image of a plastic bag in the Mariana Trench. We shouldn’t see human influence in an area that’s this remote, but it’s there.”

The team trekked the mountainside over a period of nearly two weeks, collecting sediment cores from two lakes: Lake Mahoma at about 9,000 feet and Lake Kopello in the alpine zone around 13,000 feet. Lake runoff and wind concentrated indicators into the soft underwater beds captured in the cores that tell us about past plants and climates on the mountain like pollen grains, leaf waxes, fossil bacteria and other biomarkers.

One goal of the project, Ivory said, was to help understand rapid changes to the low-lying village more than 10,000 feet below the Ugandan peaks. The Rwenzori Mountains National Park, a UNESCO World Heritage Site in Uganda, is home to the last remaining glacier that numbered in the dozens roughly 100 years ago. In that time, the region has lost more than 90% of its glacial ice.

In the village of Kilembe, deadly floods, landslides and mudslides have ravaged infrastructure, homes, farmland and livestock in recent years. In her research at large in Africa and parts of the Middle East, Ivory is assessing how warming since the last ice age has and continues to affect ecosystems. She and her students have been assisting with reforestation and forest mapping to combat the effects of climate change in the area.

The fire in the alpine region is another sign of change, Ivory said. Kilembe experienced massive flooding the year following the fire — which burned 18% of the catchment above the village. The unpredictability of the river that runs through the village continues to plague the community, Ivory said, with continued flooding that permanently knocked out power years ago.

“Whenever it rains, everything is disrupted,” Ivory said. “Flooding destroyed bridges and forced boulders into the river, making it difficult to rebuild what was there. It’s really transformed a community just downstream from the 2012 fire.”

Another key finding, Ivory said, was told through the pollen records analyzed at Penn State. The pollen revealed massive changes associated with early human fires as well as more recent fires driven by human-induced climate change to the ecology of the Rwenzori Mountains, one of the most unique and biodiverse mountainous regions on the planet. Much like isolated areas such as the Galapagos Islands offer a glimpse of evolutionary changes, this remote area of Uganda is a hot spot for ecological research and discovery, Ivory said.

The Rwenzori Mountains belong to a network of Afroalpine “sky islands,” isolated, high-altitude environments that support unique plant and animal life found nowhere else on Earth. Comparable systems, such as Mount Kilimanjaro and Mount Kenya, have also seen recent wildfire activity, suggesting that rising temperatures may be altering ecosystems that were once naturally safeguarded by extreme alpine conditions.

Pollen records showed extensive changes in plant life, beginning around 2,000 years ago. This period coincides with an increase in human intervention and agricultural practices. At lower elevation, pollen associated with rainforest trees declined after the period when fires were detected, while pollen associated with bamboo and other grasses increased.

Since 2012, Ivory said, the slow growing mountainside trees have remained damaged and the forest is at risk of ecosystem transformation, especially if fires continue to persist.

“The Rwenzori Mountains have one of the most diverse and pristine expressions of this type of vegetation,” Ivory said. “Similar areas have a lot more disturbance and a lot more fire. Until recently, this was a holdout; it was one of the best examples of this special ecosystem and now that’s under threat.”

In addition to Ivory and Mason, co-authors include Meredith Kelly, Dartmouth College; Bob Nakileza, Makerere University; Eleanor Pereboom and James Russell, Brown University; and Richard Vachula, Auburn University.

Journal

Nature

DOI

10.1038/s41586-026-10511-w

Method of Research

Observational study

Subject of Research

Not applicable

Article Title

Twenty-first century emergence of alpine fire in Central African mountains

Meredith Parrish and Edson Kule, of Rwenzori Trekking Services, subsample a sediment core from a glacial lake in Uganda.

This view from Bamwanjara Pass with view of Margarita Peak and its glacier in the distance is part of an isolated, high-altitude environments that support unique plant and animal life found nowhere else on Earth.

Credit

Courtesy of Penn State

A new frontier for marine robot communication: UF scientists develop BlueME

University of Florida

From the shallow shores of Lake Wahlberg to the salty depths of the ocean, University of Florida researchers are dropping robots in the water and training them to communicate more efficiently in murky conditions.

Their goal is to underwater robots share information over longer distances within compact, energy-efficient equipment — a capability that could improve everything from naval operations to environmental monitoring and offshore infrastructure inspections.

The project, led by Md Jahidul Islam, Ph.D., and Adam Khalifa, Ph.D., assistant professors in UFs Department of Electrical and Computer Engineering, combines UF expertise in marine robotics, wireless systems and magnetoelectric device design.

The team's recent paper, “BlueME: Robust Underwater Robot-to-Robot Communication Using Compact Magnetoelectric Antennas,” was published through the IEEE Journal of Oceanic Engineering, or JOE, with co-authors Mehron Talebi and Sultan Mahmud.

At the center of the project is BlueME, a compact magnetoelectric antenna system designed specifically for underwater communication. Unlike conventional approaches that can require large antennas or significant power, BlueME operates with its own natural resonance frequency to efficiently transmit and receive very low and low-frequency (VLF/LF) electromagnetic signals underwater.

“Efficiency is super critical,” Islam said. “Our design benchmark was to keep power consumption very low, ideally lower than a standard stereo camera system, while maintaining robust communication performance. Our compact, energy-efficient BlueME system achieves that balance, operating around 10 watts of power at maximum capacity.”

Islam has made a name for himself with robotics research, much of it with underwater robots. Khalifa’s research explores minimally invasive, wireless medical microdevices that can be injected rather than surgical implanted.

“I’ve spent years designing miniature wireless implants and studying efficient power transfer in highly conductive environments,” Khalifa said. “At one point, it clicked that many of the same physical challenges inside the human body also exist underwater. Our body is effectively made of lightly salted water. That realization opened the door to thinking about ocean communication in a completely different way.”

That cross-disciplinary connection quickly revealed broader opportunities for autonomous marine systems.

“Underwater multi-robot coordination remains extremely difficult because communication bandwidth and range are so limited,” Islam said. “Today, many underwater robots can only exchange sparse status signals or rely on surfacing periodically to transmit mission data. That significantly limits real-time autonomy and coordination.”

BlueME is designed to help close that gap. In ocean experiments, the system demonstrated communication ranges exceeding 700 meters while operating with a compact, energy-efficient architecture.

“Imagine the robot pings you back every 10 minutes on how the mission is going, and the operator can make real-time decisions and maybe adapt the mission,” Islam said.

The team believes this represents one of the first practical demonstrations of compact magnetoelectric antennas for underwater robotic communication. They have filed a provisional patent and are pursuing additional support to refine the technology and expand testing with autonomous underwater vehicles.

“What makes this especially exciting is the long-term potential,” Khalifa said. “We demonstrated these results with very limited initial resources. With dedicated development and larger-scale deployment, the possibilities become much broader.”

Islam sees the technology as part of a larger transformation in ocean robotics.

“We are still in the early stages. But advances in compact underwater communication could fundamentally change how autonomous marine systems collaborate and operate in complex ocean environments," he said. “We are talking about the very early days of a very powerful product.”

Proposed BlueME system includes a novel ME antenna design.

Credit

Md Jahidul Islam, Ph.D., and Adam Khalifa, Ph.D./UF

Journal

IEEE Journal of Oceanic Engineering

DOI

10.1109/JOE.2026.3675822

Article Title

BlueME: Robust Underwater Robot-to-Robot Communication Using Compact Magnetoelectric Antennas