Archive for the ‘Budget’ Category

Tax Extenders and Tax Reform

On Tuesday, I testified before the Senate Finance Committee at a hearing titled “Extenders and Tax Reform: Seeking Long-Term Solutions.” I was already depressed about the state of our tax system before I started preparing. As I drafted my testimony, I became distraught. Our tax system is a mess and unless we send a clear [...]

Why Higher Taxes Will Have to be Part of the Medium- and Long-Term Fiscal Solution

If we are going to reduce the medium- and long-deficit, new tax revenues must be part of the solution. And those taxes must be progressive and as conducive to economic growth as possible. Historical revenue levels will not be sufficient to fund the federal government in the future. We will need to control the ballooning [...]

A Federal Umbrella for State Rainy Days?

As state legislatures return for what promises to be yet another difficult budget year, they ought to be starting to refill their rainy day funds–those accounts that set aside money for future hard times. That’s a tough decision. After all, for the past three years, states have been raising taxes and cutting spending just to [...]

A Two-Month Payroll Tax Cut is Dumb, So Is How Congress Got There

House Republicans are right about one thing at least: Extending this year’s payroll tax cut for two months is ridiculous. The trouble is they are largely to blame for the very policy they are criticizing. Congress got itself in this mess because a few dozen self-styled tea partiers have refused since last summer to helo build a [...]

Time to End the Budget Brinksmanship in Congress

Sometime today, Congress will pass a bill to keep the government funded through September 2012. It will not reflect a careful and balanced assessment of the nation’s needs and priorities and how well government programs are meeting those needs. It will reflect the fact that government would shut down at midnight if legislators don’t act [...]

It’s Time Stop Squabbling about the Bush Tax Cuts

As long as politicians keep squabbling about what to do about the Bush era tax cuts, we are doomed. There will be no serious deficit reduction. There will be no tax reform. There will be nothing but the same old partisan arguments. Don’t believe me? Just listen to the chatter coming out of the failed deficit [...]

Five Reasons Why the Deficit Super Committee Failed

To the surprise of few, Congress’ super committee is on the brink of failure–unable to agree on $1.2 trillion in budget savings as required by last summer’s debt limit deal. But the panel was doomed from the start. Here are five reasons why: The parties could not bridge their theological differences. Mainstream Democrats believe government should play an important role in the [...]

A 20 Percent Tax Rate Cut Would Blow a Huge Hole in the Budget

In the back-and-forth over deficit reduction on Capitol Hill, Republicans have floated the idea of cutting individual tax rates by 20 percent across the board. There is much more to their plan: Crucially, they’d also trim tax subsidies. However, they don’t say how, so my colleagues at the Tax Policy Center looked only at what [...]

The Deficit Super Committee: Still Not Serious

Is the Congress’ deficit super committee making progress? That depends on your definition of progress, I suppose.   The good news is that Republicans are increasingly uttering the “t” word, suggesting they might be willing to include some tax increases in a deficit reduction plan. The other good news is that Democrats reportedly are getting more [...]

What the GOP Candidates’ Tax Plans Leave Out

The economy needs fixing, all agree. So naturally, every Republican presidential candidate has a plan for changing the federal tax system. Herman Cain has his 9-9-9 plan (or 9-0-9 if you’re low-income) and Rick Perry touts a 20 percent flat tax. Newt Gingrich would move to a consumption tax while Ron Paul would kiss the income [...]