The Committee for a Responsible Federal Budget takes great pains not to alienate either of the bipolar political viewpoints lest it seem to be playing favorites.
It's no surprise that they don't always succeed. This CRFB piece focuses on taxes. Since budget balance is their overriding goal, it favors tax increases. If you're a fiscal conservative, don't pout. When CRFB talks expenditures, big spenders squeal.
10. Record low federal revenues as a % of GDP, tax breaks were higher. Federal tax revenues ran just a smidgeon under 15% of GDP in 2010, the same as 2009.
MyGovSpending.com comment: The recession cut revenues, stimulus did, too.. Federal taxes historically have averaged 18% of GDP.
9. The first round of tax reform since Reagan is in gestation. Senators Wyden (D) and Coats (R) are working to simplify the tax code.
MyGovSpending.com comment: Arthur Laffer pointed out today in the Wall Street Journal that compliance adds 30% to the cost of taxes. In one accepts that, the $28,000 all-in taxes that an average family generating $70,000 of cash income is really a tax burden of $36,000. Ouch.
8. The 2010 tax deal gave everyone something and charged it on the national credit card.
MyGovSpending.com comment: The SWAG (slang for promotional freebies) came under the banner of stimulus. Ostensibly, these goodies will be withdrawn at the end of 2012.
7. Estate Taxes disappeared, then re-appeared.
MyGovSpending.com comment: The 2001 tax killed estate taxes. They were brought back at the end of 2010.
6. Value Added Taxes (VAT) get voted down.
MyGovSpending.com comment: VAT are a type of sales tax levied at every level of production through an economy. They are credited with quietly boosting the tax take of governments across the world. In the
the left complains that they do not ding the rich enough, and the right worries VAT revenues will be added to existing revenues. VAT off the table for the moment. US
5. Spending cuts are labeled tax increases.
MyGovSpending.com comment: Here is a lovely example of both semantic infiltration and the distance of
from its citizens. Washington
Fiscal folks have taken to renaming tax deductions and credits as tax expenditures. It applies to mortgage interest deductions, charitable contribution deductions, child tax credit, etc... The idea is that these items are spending through the tax code - that money not collected by politicians is equivalent to money spent. It seems reasonable.
Or is it. It reflects a power-centric viewpoint, that government has first claim on the money citizens earn. Pushed a bit further, the concept implies that any money people take home from their paycheck after taxes is a tax-expenditure - money the government has not collected. Therefore it is the rightful property of government.
Taxpayers are more likely to think of taxes as the expenditure, not the absence of taxes.
4. Non-Story of the Year. Politicians patch the AMT. MyGovSpending.com comment: The Alternative Minimum Tax is tax code running parallel to the Form 1040. It was originally designed for people who took advantage of too many tax breaks. Now it is snaring many decidedly non-rich taxpayers. Rather than fix it permanently, Congress duct-taped it for another year.
3. CUTGO cuts out the PAYGO.
MyGovSpending.com comment: This is the latest attempt Congress has made to appear to be fiscally prudent while leaving enough loopholes that it can act as it pleases.
2. "Make Work Pay" tax credit expires.
MyGovSpending.com comment: This $400 tax credit was designed to be explicitly stimulative and temporary. It turn out that it actually is temporary.
1. Simpson-Bowles "Zero Plan".
MyGovSpending.com comment: Obama's Fiscal Commissioners Erskin Bowles and Alan Simpson turbo-charged the tax debate by proposed to wipe out all tax breaks - even the best loved - then lowering tax rates. Overall, they targeted a revenue increase with larger spending reductions.
The Bowles-Simpson Commission put radical tax reform on the table for the first time in a generation. A huge step forward. Finally.