Posts Tagged ‘CBO’

Individual Income Taxes May Soon Generate Half of All Federal Tax Revenue

Over the next decade, the individual income tax will be the fastest growing source of federal revenue, according to new estimates by the Congressional Budget Office. In fact, the individual income tax will pretty much be the only revenue source likely to increase significantly over the next decade.  As a result, it will generate more […]

Where Are Tax Rates Headed?

Effective tax rates have been rising since 2009 and will continue to rise for a few more years before they flatten out, according to Tax Policy Center projections. My TaxVox post earlier this week showed how average federal tax rates have changed over the past three decades. But that was based on a 30-year history […]

Can Expiring Tax Provisions Save the Budget Talks?

There is lots of buzz around Washington about whether a laundry list of expiring tax provisions could be the key to a modest budget agreement. Sadly, it is hard to see how.   The theory goes like this: Democrats might agree to some cuts in programs such as Medicare if Republicans swallow some new revenues. […]

The U.S.May Not Default on Friday But Washington Is Still Playing A Dangerous Game

What’s going to happen on October 18 if Congress doesn’t vote to increase the debt limit? Probably nothing. Make no mistake, Washington is still wading in exceedingly treacherous waters as the President and Congress wrestle over a deal to avoid–at least for now—a breach of the nation’s borrowing authority. The government risks financial calamity if […]

TPC Takes a New Look at Incomes

The Tax Policy Center has changed the way it calculates income. The new definition, which TPC calls “expanded cash income” or ECI, will raise measured income for most taxpayers. ECI includes sources of income TPC previously excluded such as employer contributions to retirement plans and health insurance, income earned by retirement accounts, and food stamp […]

Are Low Interest Rates Masking Future Deficits?

Thanks to artificially low interest rates, the United States has been able to finance deficits exceeding $1 trillion every year from 2009 through 2012 at very low cost. Throughout the period, the ratio of interest to the GDP has remained almost stable and is not expected to start rising until 2015. Some argue that this […]

Who Benefits from Tax Preferences? You Do.

The Congressional Budget Office report on the distribution of tax expenditures is getting lots of buzz, nearly all of it positive. This is a gratifying and somewhat surprising outcome. The paper confirms many of the findings of my Tax Policy Center colleagues who have done similar analyses in recent years. The basic story is pretty […]

Immigration, Dynamic Scoring, and CBO

Immigration policy poses an unusual challenge for the Congressional Budget Office and the Joint Committee on Taxation. If Congress allows more people into the United States, our population, labor force, and economy will all get bigger. But CBO and JCT usually hold employment, gross domestic product (GDP), and other macroeconomic variables constant when making their […]

Changing Government’s Inflation Measure Would Raise Taxes as Much as it Would Cut Spending

Changing the way government adjusts spending and taxes for inflation is one of those issues that continues to hang around the edges of the budget debate. Republicans and many economists argue for shifting to a more accurate inflation measure, called the chained Consumer Price Index (CPI). President Obama would support a version as part of a […]

Bowles-Simpson II: A New Plan to Avoid the Sequester

With 10 days to go until the dreaded sequester—the automatic across-the-board spending cuts that most lawmakers profess to hate—the Washington drama machine is starting to get in gear. Today, President Obama stood in front a group of uniformed first responders and warned darkly of layoffs if the spending cuts kick in. At the same time, […]