tax reform and deficit reduction
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Tax Reform and Deficit Reduction. Professor Jon Forman University of Oklahoma Slides for a panel of the Comm. on Tax Policy and Simplification ABA Section of Taxation Washington, DC May 6, 2011. Overview. The Budget Outlook Short-term Long-term Taxes The Current Tax System - PowerPoint PPT PresentationTRANSCRIPT
Tax Reform and Deficit Reduction
Professor Jon FormanUniversity of Oklahoma
Slides for a panel of theComm. on Tax Policy and Simplification
ABA Section of TaxationWashington, DC
May 6, 2011
Overview The Budget Outlook
Short-term Long-term
Taxes The Current Tax System Recent Tax Reform Proposals
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Short-Term:Projected Budget Totals
Budget Totals, $billions 2011 2012-2021Receipts $2,228 $39,084Outlays $3,708 $46,055 Deficit $1,480 $ 6,971Budget Totals, % GDPReceipts 14.8% 19.9%Outlays 24.7% 23.5% Deficit 9.8% 3.6%Public Debt, % GDP 69.4% 75.3%
3Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf.
4Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf.
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6Congressional Budget Office, Four Observations about the Federal Budget (March 7, 2011), at 6 http://www.cbo.gov/ftpdocs/120xx/doc12087/CBO_Presentation_to_NABE_3-7-11.pdf.
7Congressional Budget Office, Four Observations about the Federal Budget (March 7, 2011), at 7 http://www.cbo.gov/ftpdocs/120xx/doc12087/CBO_Presentation_to_NABE_3-7-11.pdf.
8Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf.
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12Congressional Budget Office, Four Observations about the Federal Budget (March 7, 2011), at 8 http://www.cbo.gov/ftpdocs/120xx/doc12087/CBO_Presentation_to_NABE_3-7-11.pdf.
13U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2009).
14Congressional Budget Office, The Long-Term Budget Outlook (Revised August 2010), at 5, http://www.cbo.gov/ftpdocs/115xx/doc11579/06-30-LTBO.pdf.
Factors Explaining Future Federal Spending on Medicare, Medicaid, and Social Security (percentage of GDP)
Congressional Budget Office, The Long-Term Budget Outlook (June 2009), at 12 (Box 1-2).
Taxes Overview of the federal tax system Recent tax reform proposals
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17Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, at 71, www.jct.gov.
Proposed Budget ReceiptsReceipts, $billions 2011 2014Individual income taxes 998 1,671Corporation income taxes 279 398Payroll taxes 819 1,092Excise taxes 73 86Estate and gift taxes 11 14Custom duties and other receipts 47 75
Total receipts 2,228 3,442 GDP $15,034 $17,258 Receipts, % GDP 14.8% 19.9%
18Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf.
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Center on Budget and Policy Priorities, Top Ten Tax Charts (April 14, 2011), http://www.offthechartsblog.org/top-ten-tax-charts/.
20Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, www.jct.gov.Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System
(JCX-1-11), January 18, 2011, at 70, www.jct.gov.
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U.S. Payroll Tax Rates: Selected Years
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1940 1960 1980 2010
Year
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MedicareSocial Security
23Edward D. Kleinbard, Muddling Through the Budget Crisis (January 6, 2011); OECD Tax Database, http://www.oecd.org.
24Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, at 72, www.jct.gov.
25Congressional Budget Office, Trends in Federal Tax Revenues and Rates (December 2, 2010), at 10, http://finance.senate.gov/imo/media/doc/120210DEtest.pdf.
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Center on Budget and Policy Priorities, Top Ten Tax Charts (April 14, 2011), http://www.offthechartsblog.org/top-ten-tax-charts/.
27Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, at 66, www.jct.gov.
28
Center on Budget and Policy Priorities, Top Ten Tax Charts (April 14, 2011), http://www.offthechartsblog.org/top-ten-tax-charts/.
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Top 10 Income Tax Expenditures, 2012 (Billions)
Health insurance exclusion $184Mortgage interest deduction 99401(k) plans 68Step-up of basis at death 61Exclusion of net imputed rental income 51Deductible nonbusiness state and local taxes other than on houses
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Employer plans 45Charitable contrib. (other than health & education) 43Capital gains (except agriculture, timber, iron, coal) 38Exclusion of interest on tax-exempt bonds 37
2012 Federal Budget, Analytical Perspectives, Chapter 17, Tax Expenditures, Table 17-3, http://www.whitehouse.gov/omb/budget/Analytical_Perspectives.
30Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021 (January 2011), http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf.
31Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009).
3220 Facts About U.S. Inequality that Everyone Should Know, http://stanford.edu/group/scspi/cgi-bin/facts.php.
Productivity and Real Income
Rising Poverty
33U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2009, (Current Population Report No. P60-238, September 2010), http://www.census.gov.
34Congressional Budget Office, Trends in Federal Tax Revenues and Rates (December 2, 2010), at 24, http://finance.senate.gov/imo/media/doc/120210DEtest.pdf.
Rising Inequality
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36Congressional Budget Office, Trends in Federal Tax Revenues and Rates (December 2, 2010), at 15, http://finance.senate.gov/imo/media/doc/120210DEtest.pdf.
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Shares of Total Business Returns and Net Income, 1980-2007
1980 1990 2000 2007S Corporations Returns 4% 8% 11% 12% Net Income 1% 8% 14% 14%Partnerships Returns 11% 8% 8% 10% Net Income 3% 3% 18% 23%Sole Proprietorships Returns 69% 74% 72% 72% Net Income 17% 26% 15% 10%C Corporations Returns 17% 11% 9% 6% Net Income 80% 62% 53% 53%
38Internal Revenue Service, Statistics of Income, www.irs.gov/taxstats.
Expired Tax Provisions 2010 First-time homebuyer credit Making work pay credit Build America Bonds Estate and gift tax regime for 2010
39Joint Committee on Taxation, List of Expiring Federal Tax Provisions, 2010-2020 (JCX-2-11), January 21, 2011, www.jct.gov.
Expiring Tax Provisions 2011 Tax credit for research and
experimentation expenses Increased AMT exemption amount Increase in expensing to
$500,000/$2,000,000 Above-the-line deduction for qualified
tuition and related expenses Temporary 2% payroll tax cut
40Joint Committee on Taxation, List of Expiring Federal Tax Provisions, 2010-2020 (JCX-2-11), January 21, 2011, www.jct.gov.
Expiring Tax Provisions 2012 Most 2001 and 2003 tax cuts
35% maximum rate 10% minimum rate $1,000 child tax credit 15% capital gain and dividend rates
Expanded earned income tax credit American opportunity tax credit Reduced estate and gift taxes
41Joint Committee on Taxation, List of Expiring Federal Tax Provisions, 2010-2020 (JCX-2-11), January 21, 2011, www.jct.gov.
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Center on Budget and Policy Priorities, Top Ten Tax Charts (April 14, 2011), http://www.offthechartsblog.org/top-ten-tax-charts/.
Recent Tax Reform Proposals President’s Economic Recovery Advisory
Board, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation (August 2010).
National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010).
Bipartisan Policy Center, Restoring America’s Future (November 2010). Co-Chairs: Pete Domenici & Alice Rivlin
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Recent Tax Reform Proposals Bipartisan Tax Fairness and
Simplification Act of 2011 (2011). Senators Ron Wyden and Dan Coats
Rep. Paul Ryan, The Roadmap Plan (2010).
National Taxpayer Advocate, 2010 Annual Report to Congress (December 31, 2010).
President Obama’s FY2012 Budget44
Recent Tax Reform Proposals President Obama, Framework for Shared
Prosperity and Shared Fiscal Responsibility (April 13, 2011).
See also: Choosing The Nation’s Fiscal Future
(National Research Council & National Academy of Public Administration 2010)
The Peterson-Pew Commission on Budget Reform, Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt (2009).
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Principles of Sound Tax Policy Simplicity Transparency Neutrality Stability No Retroactivity Broad Bases and Low Rates
46Tax Foundation, The Principles of Sound Tax Policy , http://www.taxfoundation.org/publications/show/25982.html.
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More Principles of Sound Tax Policy Distribution matters
A just distribution of economic resources Intergenerational justice/ Deficits
Behavioral consequences matter Encourage work and savings Marriage penalties and bonuses Keep effective rates as low as possible Growth and a stronger dollar
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Tax Base Income Consumption Earnings Wealth
PERAB: Simplification Options Simplification for Families
Consolidate Family Credits and Simplify Eligibility Rules
Simplify and Consolidate Tax Incentives for Education
49PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation, http://www.whitehouse.gov/sites/default/files/microsites/PERAB_Tax_Reform_Report.pdf.
PERAB: Simplification Options Simplify Savings and Retirement
Incentives Consolidate Retirement Accounts Integrate IRA and 401(k)-type
Contribution Limits and Disallow Nondeductible Contributions
Consolidate Non-Retirement Savings Reduce Retirement Account Leakage Simplify Taxation of Social Security
50PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation, http://www.whitehouse.gov/sites/default/files/microsites/PERAB_Tax_Reform_Report.pdf.
PERAB: Simplification Options Simplify Taxation of Capital Gains
Harmonize Rules and Tax Rates for Long-Term Capital Gains
Simplify Capital Gains Tax Rate Structure Limit or Repeal Section 1031 Like-Kind
Exchanges Capital Gains on Principal Residences
51PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation, http://www.whitehouse.gov/sites/default/files/microsites/PERAB_Tax_Reform_Report.pdf.
PERAB: Simplification Options Simplify Tax Filing
The Simple Return Data Retrieval Raise the Standard Deduction and
Reduce the Benefit of Itemized Deductions
Simplification for Small Business The Alternative Minimum Tax
52PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation, http://www.whitehouse.gov/sites/default/files/microsites/PERAB_Tax_Reform_Report.pdf.
PERAB: Compliance Options Dedicate More Resources to
Enforcement and Enhance Enforcement Tools
Increase Information Reporting and Source Withholding
Clarify the Definition of a Contractor
53PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation, http://www.whitehouse.gov/sites/default/files/microsites/PERAB_Tax_Reform_Report.pdf.
PERAB: Corporate Tax Reform Reduce Marginal Corporate Rates Broaden the Corporate Tax Base Eliminate or Reduce Tax Expenditures
Eliminate the Domestic Production Deduction
Eliminate or Reduce Accelerated Depreciation
Eliminate Other Tax Expenditures
54PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation, http://www.whitehouse.gov/sites/default/files/microsites/PERAB_Tax_Reform_Report.pdf.
PERAB: International Corporate Tax Issues Option 1: Move to a Territorial System Option 2: Move to a Worldwide
System with a Lower Corporate Tax Rate
Option 3: Limit or End Deferral with the Current Corporate Tax Rate
Option 4: Retain the Current System but Lower the Corporate Tax Rate
55PERAB, The Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation, http://www.whitehouse.gov/sites/default/files/microsites/PERAB_Tax_Reform_Report.pdf.
President’s Fiscal Commission Co-chairs: Alan Simpson & Erskine Bowles Designed to raise 21% of GDP Individual tax rates of 12, 22, and 28% Eliminate the AMT Eliminate the phase-out of personal
exemptions & limits on itemized deductions Eliminate itemized deductions but retain
standard deduction & personal exemptions Tax capital gains & dividends as ordinary
income56The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December
2010), http://www.fiscalcommission.gov; Tax Policy Center, http://www.taxpolicycenter.org.
President’s Fiscal Commission Eliminate tax expenditures except:
child credit and earned income tax credit mortgage interest deduction—replace
with 12% credit; $500,000 mortgage cap cap and phase out the exclusion for
employer-sponsored health care charitable giving deduction—replace with
12% credit for contributions over 2% AGI
57The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010), http://www.fiscalcommission.gov.
President’s Fiscal Commission Eliminate tax expenditures except:
exclusion of interest on state and municipal bonds—tax interest only on newly-issued bonds
retirement savings—maintain basic preferences, but consolidate retirement accounts and cap annual tax-preferred contributions at lower of $20,000 or 20 percent of income; expand savers’ credit
defined benefit pensions58The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December
2010), http://www.fiscalcommission.gov.
President’s Fiscal Commission Eliminate corporate tax expenditures
& reduce corporate tax rate to 28% Territorial tax system for active
foreign-source income Increase Social Security taxable wage
base to 90% of wages, by 2050 Increase the gasoline excise tax on
gasoline by 15¢ per gallon59The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December
2010), http://www.fiscalcommission.gov.
Bipartisan Policy Center Co-Chairs: Pete Domenici & Alice
Rivlin one-year payroll tax holiday in 2011
to help stimulate economic recovery individual tax rates: 15% on the 1st
$50,000 of taxable income ($100,000 for married couples, 27% on excess
eliminate the AMT60Bipartisan Policy Center, Restoring America’s Future (November 2010),
http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20REPORT%2011.16.10.pdf.
Bipartisan Policy Center Eliminate tax expenditures:
exclusion from tax of the inside buildup of life insurance and deferred annuities
credits and deductions for higher education expenses
credit for child & dependent care exclusion from income of benefits under
Section 125 cafeteria plans foreign earned income exclusion
61Bipartisan Policy Center, Restoring America’s Future (November 2010), http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20REPORT%2011.16.10.pdf.
Bipartisan Policy Center Exempt the first $1,000 of net long-
term gains from taxation (indexed for inflation) tax any additional long-term gains and
all qualified dividends as ordinary income include in income unrealized capital
gains at death Cap and phase out the exclusion for
employer-sponsored health care62Bipartisan Policy Center, Restoring America’s Future (November 2010),
http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20REPORT%2011.16.10.pdf.
Bipartisan Policy Center Eliminate deduction for state and
local taxes Replace charitable contributions and
mortgage interest deductions with 15% refundable credits
Retain medical deduction
63Bipartisan Policy Center, Restoring America’s Future (November 2010), http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20REPORT%2011.16.10.pdf.
Bipartisan Policy Center Replace the standard deduction,
personal exemptions, head of household filing status, the child tax credit, and the earned income tax credit with two refundable credits: $1,600 for each dependent child an earnings credit equal to 21.3 percent
of the first $20,300 of earnings
64Bipartisan Policy Center, Restoring America’s Future (November 2010), http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20REPORT%2011.16.10.pdf.
Bipartisan Policy Center Tax all Social Security benefits,
eliminate the elderly credit & provide 2 new credits: 7.5% of Social Security benefits 15% of the current standard deduction
for individuals age 65 or older Increase Social Security taxable wage
base to 90% of wages
65Bipartisan Policy Center, Restoring America’s Future (November 2010), http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20REPORT%2011.16.10.pdf.
Bipartisan Policy Center Impose a 6.5% broad-based
consumption tax Impose an excise tax 1¢/ounce on
sugar-sweetened beverages Raise the excise tax on alcoholic
beverages to 25¢/ounce Estate tax: $3.5 million exemption
and 45% maximum tax rate66Bipartisan Policy Center, Restoring America’s Future (November 2010),
http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20REPORT%2011.16.10.pdf.
Bipartisan Policy Center Corporate taxes
reduce the corporate rate to 27% eliminate many tax expenditures:
domestic production deduction research and experimentation credit accelerated depreciation for rental housing
retain deferral of income for controlled foreign corporations
67Bipartisan Policy Center, Restoring America’s Future (November 2010), http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20REPORT%2011.16.10.pdf.
Wyden-Coats Tax Act Like the Tax Reform Act of 1986 Individuals
top tax rate of 35% standard deduction of $15,000 ($30,000
for couples) repeal AMT 35% exclusion for capital gains and
qualified dividends eliminate lots of tax breaks
68Senator Ron Wyden, The Bipartisan Tax Fairness and Simplification Act of 2011 (2011), http://wyden.senate.gov/issues/legislation/details/?id=fb5b603a-ed94-48a8-8ff1-c220c1052b3f.
Wyden-Coats Tax Act Corporate & business
replaces the graduated corporate rate structure with a flat rate of 24%
eliminates many business tax breaks allow unlimited expensing of equipment
and inventories for small businesses
69Senator Ron Wyden, The Bipartisan Tax Fairness and Simplification Act of 2011 (2011), http://wyden.senate.gov/issues/legislation/details/?id=fb5b603a-ed94-48a8-8ff1-c220c1052b3f.
Rep. Ryan’s Roadmap Designed to raise 19% of GDP Pay income taxes through existing
law, or Through a highly simplified code with
virtually no tax breaks 10% on the first $50,000 ($100,000 for
couples), 25% on the rest $39,000 standard deduction & personal
exemptions for a family of 470Paul Ryan, The Roadmap Plan (2010), http://www.roadmap.republicans.budget.house.gov.
Rep. Ryan’s Roadmap eliminate the AMT eliminate taxes on interest, capital gains,
and dividends Eliminate the estate tax Replace the corporate income tax with
a border-adjustable business consumption tax of 8.5%
See also House Committee on Budget, The Path to Prosperity (2011)
71Paul Ryan, The Roadmap Plan (2010), http://www.roadmap.republicans.budget.house.gov.
National Taxpayer Advocate Repeal the AMT Consolidate the family tax provisions Improve other provisions relating to
taxation of the family unit Consolidate education savings
incentives Consolidate retirement savings
incentives72National Taxpayer Advocate, 2010 Annual Report to Congress (December 31, 2010),
http://www.taxpayeradvocate.irs.gov/Media-Resources/Annual-Report-To-Congress-Full-Report.
National Taxpayer Advocate Simplify worker classification
determinations Eliminate (or reduce incentives for
lawmakers to enact tax sunsets Eliminate (or simplify) phase outs Streamline the penalty regime
73National Taxpayer Advocate, 2010 Annual Report to Congress (December 31, 2010), http://www.taxpayeradvocate.irs.gov/Media-Resources/Annual-Report-To-Congress-Full-Report.
President Obama: Reform Corporate & Individual Tax “I’m asking Democrats and Republicans to
simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit. It can be done.”
“In fact, the best thing we could do for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.”
74Text of President Barack Obama’s State of the Union Address , http://www.politico.com/news/stories/0111/48181.html.
President Obama’s 2012 Budget Extend the Earned Income Credit Expand the Dependent Care Credit Extend American Opportunity Credit Tax Dividends and Net Long-Term
Capital Gains at a 20-Percent Rate for Upper-Income Taxpayers
Reduce the Value of Certain Tax Expenditures for Upper-Income
75U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (February 2011), http://www.treasury.gov/.
Enhance and Make Permanent the Research and Experimentation (R&E) Tax Credit
Reform & Extend Build America Bonds Reform Treatment of Financial
Institutions and Products Reinstate Superfund Taxes Reform U.S. International Tax System
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President Obama’s 2012 Budget
U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (February 2011), http://www.treasury.gov/.
President Obama’s 2012 Budget Eliminate Oil and Gas Preferences Eliminate Coal Preferences Expand Information Reporting Improve Compliance by Businesses
Require Greater Electronic Filing Worker Classification
Strengthen Tax Administration Expand Penalties
77U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (February 2011), http://www.treasury.gov/.
President Obama’s Framework for Shared Prosperity and Shared Fiscal Responsibility
78The White House, http://www.whitehouse.gov/winning-the-future/fiscal-framework.
President Obama’s Framework: another 12-year estimate: $5.3T Restore high-bracket tax rates to Clinton-era
levels: $1T Cut tax-expenditure spending through the tax
code: $1T Cut health care spending: $0.5T Cut other mandatory spending by: $0.4T Cut security spending: $0.4T Cut non-security discretionary spending: $0.8T Those reductions will carry with them a
reduction in net interest of: $1.2T79Brad DeLong,
http://delong.typepad.com/sdj/2011/04/the-obama-deficit-reduction-framework.html.
President Obama’s Framework: Tax Reform $3 of spending cuts and interest
savings for every $1 from tax reform that contributes to deficit reduction
comprehensive tax reform to produce a system which is fairer, has fewer loopholes, less complexity, and is not rigged in favor of those with lawyers and accountants to game it.
80The White House, Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility (April 13, 2011), www.whitehouse.gov.
President Obama’s Framework: Tax Reform Would not extend the Bush tax cuts for
the wealthiest Americans Builds on the Fiscal Commission’s goal
of reducing tax expenditures to both lower rates and lower the deficit
Corporate tax eliminate loopholes reduce distortions lower the corporate tax rate
81The White House, Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility (April 13, 2011), www.whitehouse.gov.
Consumption Tax Options Progressive Personal Consumption
Tax Subtraction method Value Added
Tax Treasury Department proposal for
Business Activity Tax (BAT) Credit-method (European) VAT National retail sales tax (RST)
82Charles E. McClure, Jr., Why the United States Needs a Value Added Tax (2009), http://www.taxadmin.org/Fta/meet/09am/papers/McClure.pdf.
Earlier Tax Reform Proposals President’s Advisory Panel on Tax
Reform, Final Report (2005), http://govinfo.library.unt.edu/taxreformpanel.
U.S. Treasury Department, The President's Tax Proposals to the Congress for Fairness, Growth, and Simplicity (1985).
84
Earlier Tax Reform Proposals U.S. Treasury Department, Tax
Reform for Fairness, Simplicity, and Economic Growth: The Treasury Department Report to the President (3 volumes, 1984).
David Bradford and the U.S. Treasury Tax Policy Staff, Blueprints for Tax Reform (Arlington, VA: Tax Analysts. 2nd ed. 1984).
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Conclusion President needs 60 votes in the
Senate and cooperation in the House The whole tax system is in play
And will be in play for years Lobbyists will be tripping over each other
Change is almost always incremental
Sources The President’s Economic Recovery Advisory Board, The
Report on Tax Reform Options: Simplification, Compliance, and Corporate Taxation (August 2010), http://www.whitehouse.gov.
The National Commission on Fiscal Responsibility and Reform, The Moment of Truth (December 2010), http://www.fiscalcommission.gov.
The Bipartisan Policy Center Debt Reduction Task Force, Restoring America’s Future: Reviving the Economy, Cutting Spending and Debt, and Creating a Simple, Pro-Growth Tax System (November 2010), http://bipartisanpolicy.org.
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Sources Senators Ron Wyden & Dan Coats, Bipartisan Tax
Fairness and Simplification Act of 2011 (2011), http://wyden.senate.gov/issues/legislation/details/?id=fb5b603a-ed94-48a8-8ff1-c220c1052b3f.
Representative Paul Ryan, The Roadmap Plan (2010), http://www.roadmap.republicans.budget.house.gov.
House Committee on Budget, The Path to Prosperity: Restoring America’s Promise (2011), http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf.
Joint Committee on Taxation, Present Law and Historical Overview of the Federal Tax System (JCX-1-11), January 18, 2011, www.jct.gov.
88
Sources National Taxpayer Advocate, 2010 Annual Report to
Congress (December 31, 2010), http://www.taxpayeradvocate.irs.gov/Media-Resources/Annual-Report-To-Congress-Full-Report.
Office of Management and Budget, 2012 Federal Budget, http://www.whitehouse.gov/omb/budget.
The White House, Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility (April 13, 2011), www.whitehouse.gov.
Joint Committee on Taxation, List of Expiring Federal Tax Provisions, 2010-2020 (JCX-2-11), January 21, 2011, www.jct.gov.
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Sources The Tax Policy Center, Deficit Reduction Proposals,
http://www.taxpolicycenter.org/taxtopics/Deficit-Reduction-Proposals.cfm.
Joshua Rosenberg, The U.S. Fiscal Trajectory: Causes and Consequences (January 21, 2011), http://www.abanet.org/tax/MID11/papers/Rosenberg-slidesABA-Boca-Rosenberg.pdf.
90U.S. Department of the Treasury, General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (February 2011), http://www.treasury.gov/.
About the Author Jonathan Barry Forman (“Jon”) is the Alfred P.
Murrah Professor of Law at the University of Oklahoma College of Law and the author of Making America Work (Washington, DC: Urban Institute Press, 2006).
Jon was the Professor in Residence at the Internal Revenue Service Office of Chief Counsel, Washington, DC, for the 2009-2010 academic year.
Jon can be reached at [email protected], 405-325-4779, www.law.ou.edu/faculty/forman.shtml.
These slides are available at http://jay.law.ou.edu/faculty/jforman/Speeches/2011ABA-TAX-forman.ppt.
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