Our recent paper on the fiscal cliff details the short-term or longer-term economic problems that the country will face if lawmakers either allow everything in the fiscal cliff to occur as scheduled or if they decide to extend it all. This blog will look farther into the potential short-term impacts, attempting to quantify what the cliff's 2013 effects would do to the economy.
With the "Buffett Rule" set to get a vote in the Senate next week, we felt it was a good time to take a more in-depth look at the proposed policy -- at both its budget and tax impact.
Following up on a project they did last year, the White House has released its 2011 Federal Taxpayer Receipt. This tool allows you to put in how much you paid in Social Security, Medicare, and income taxes last year and see how much of your tax dollars went to various areas of the budget. You can see how much of your money pays for defense, health care, income security, veterans benefits, international affairs, and, yes, also interest on the debt.
Bloom and Gloom – Washington’s famous Cherry Blossoms bloomed just ahead of the festival in their honor, and most promptly disappeared due to stormy weather in DC. Now, we can look forward to five weeks of celebrations with the namesakes mostly absent. A similar situation is playing out with the federal budget. There have been weeks of hearings, which will culminate this week as the House votes on the FY 2013 budget resolution. Yet, it is clear that there will be no budget coming out of Congress, again.
As the House Republican budget resolution has come out and alternatives will be sure to follow, CRFB is rolling out a blog series looking at all the budget resolutions that come up and taking a closer look at the one that's out there now. In this blog, we will look at Chairman Paul Ryan's (R-WI) tax reform plan.
In what was surprising news to many when, yesterday, freshman Rep. Rick Crawford (R-AR) announced that he would introduce legislation that would apply a tax to those with annual incomes exceeding $1 million. The concept has held pretty much exclusively Democratic support, until now that is. Crawford touted the move as a necessary compromise for a path towards reducing the county’s deficits and sky-rocketing debt.
An aide described it as analogous to other bipartisan efforts to reaching a deal, stating:
The Citizens for Tax Justice (CTJ) just released a new report detailing their own estimates of a number of options for raising revenue through eliminating or reducing tax preferences or enacting new taxes. The CTJ argued that many of these tax expenditures were inefficient and revenues could be spent elsewhere in recovery measures or to reduce the federal deficit. They proposed a wide scope of policies, ranging from changes with large revenue impacts to small-change loophole-closers.
As they explain:
The Tax Reform Act of 1986 is often hailed as a major bipartisan achievement, a reform that simplified the tax code and lowered marginal tax rates. Of course, more holes were opened up, more tax brackets were added, and significant complexity was introduced to the tax code thereafter.