If you’re discussing tax policy with someone who asserts that his or her point is “just common sense,” this could indicate one of two things: Either no deep thought is required—as the person would have you believe. Or no deep thought has been applied. The “common sense” notion that capital income taxes hinder growth seems [...]

The Congressional Budget Office released its latest Budget and Economic Outlook earlier this week.  As always, the Outlook provides insight into the fiscal status of the federal government. My three overarching reactions are: First, because American Taxpayer Relief Act of 2012 (ATRA) instituted tax changes that had been widely expected, the official (“current law”) baseline is now much [...]

The budget proposal House Budget Committee Chairman  Paul Ryan (R-WI) released last week  is, essentially, an effort to have low- and middle-class households bear the entire burden of closing the fiscal gap and bear the costs of financing an additional tax cut for high income households.  The Tax Policy Center (which I co-direct) analyzed the [...]

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 [...]

With congressional deficit reduction efforts largely collapsed, the question remains: What are we going to do about the nation’s long-term budget mess? Since any realistic deficit reduction plan will require significant new revenues, is a Value-Added Tax a sensible way for government to raise those extra dollars? In an effort to find out, the Pew [...]

In the final hours before Friday’s historic downgrade, Standard & Poors gave Treasury an advance copy of its report. Amazingly, that report contained a $2 trillion error in its calculations of U.S. deficits and debt over the next decade. Here are four things you should know about it. 1. Treasury hoped that S&P would change its decision [...]

On Friday night, Standard and Poors announced that it was downgrading U.S. long-term sovereign debt from AAA to AA+, the first such downgrade in U.S. history. Here are five things you should know about the downgrade — four important, one trivia. 1. S&P downgraded U.S. debt not only because of the deteriorating fiscal outlook, but also [...]

Here’s a quick multiple choice quiz about the Gang of Six’s new budget proposal. Over the next ten years, would the proposal: a. Cut taxes by $1.5 trillion b. Increase taxes by $2.0 trillion c. Increase taxes by $1.2 trillion d. All of the above. If you answered (d), you have a fine future as [...]

My latest column at the Christian Science Monitor: America’s leaders need to get to yes on a budget deal – one that marries substantial deficit cuts with a much-needed increase in the debt limit. But that’s not enough. Rather than merely increasing the debt limit, we should eliminate it. I realize that sounds strange. With [...]

There has been a lot of talk in Washington recently about “job-killing tax increases.” Raising taxes, the argument goes, would lead businesses to hire fewer workers and stifle our already weak economic recovery. But I haven’t heard anyone talking about “job-killing spending cuts.” In macroeconomic terms, tax increases and spending cuts have qualitatively the same [...]