Statement on President's Tax Plan
For Immediate Release
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, has made the following statement on the President's tax plan, released today:
The tax code is in desperate need of reform to simplify it, make it fairer, and grow the economy. We strongly support responsible efforts to overhaul our tax system.
At the same time, we have to recognize the simple facts that tax cuts are not the same as reforms, nor do tax cuts pay for themselves.
Actual reform is going to require identifying specific tax expenditures to eliminate or reform. And the bigger the tax rate cut, the bigger the tax expenditure reductions will need to be. Relying on overly rosy economic assumptions to offset the revenue loss from tax reductions will not only lead to disappointing results, it will undermine the potential growth benefits from reforming the tax code. (Read our piece on this here). What we need is a plan to restructure the tax code in a way that would help—not harm—the nation's untenable fiscal situation.
We share the President’s desire to enact pro-growth tax reform and encourage him to work with Congress to reduce rates and deficits. We are encouraged the White House is talking about eliminating some tax breaks; now the tough choices have to be made on how to broaden the base and pay for tax reform.
Unfortunately, it seems the Administration is using economic growth like magic beans – the cheap solution to all our problems. But there is no golden goose at the top of the tax cut beanstalk, just mountains of debt.
Here is some real math: Debt is twice its historical average; higher as a share of the economy than any time outside of the World War II era; and growing faster than the economy with no end in sight.
Instead of banking on fantasy growth rates to offset debt-financed tax cuts, we should be pursuing sustainable economic growth to lift incomes and reduce budget deficits.
###
For more information contact Patrick Newton, Press Secretary, at newton@crfb.org.
