Skip to comments.Simpson-Bowles Plan Is a $5 Trillion Net Tax Hike in First Full Decade
Posted on 09/19/2012 12:11:19 PM PDT by 92nina
Simpson-Bowles targets permanently higher taxes. According to the Simpson-Bowles co-chair report, the revenue target of their proposal is to cap revenue at or below 21 percent of GDP.
The Simspon-Bowles revenue target is much higher than the historical average. Using historical data either from CBO or OMB, its clear that the historical tax revenue burden is closer to 18.5 percent of GDP.
Simspon-Bowles is a $5 trillion net tax hike relative to historical tax levels. If Simpson-Bowles revenue target was in place for the whole next decade, it would raise $5 trillion more in tax revenue than if historical revenue levels were in place
But we're not currently collecting the historical tax revenue level. Due to the worst economic recovery since World War II, tax revenues are under-performing their historical average. According to CBO, federal tax revenues in 2012 will come in at just 15.7 percent of GDP. The gap between this figure and the historical average is $450 billion. This bridge can reasonably be added to the $5 trillion tax hike total of the Simpson-Bowles plan relative to the historical average.
The Ryan budget keeps taxes at their historical levels while reforming the tax code. This stands in stark contrast to the House GOP budget, which keeps revenues in their historical band of 18-19 percent of GDP. It also calls for fundamental tax reform, with a top rate no higher than 25% and territoriality.
Read more: http://atr.org/simpson-bowles-plan-trillion-net-tax-a7194#ixzz26wbmqKK8
I just want them to stop spending and use our constitution..25% from fed and 25% from state , 25% from local..then Sales tax..leaves no income.
Socialism sure is expensive.
The goal of Socialism. Slavery.
I know that there must be a very very good reason and no doubt I am just repeating what has been said before however, why aren’t spending cuts ever in the equation to cut the “dafficit”?
Ryan’s budget also leaves us with a $400B deficit at the end of his plan in 2022 or 2024. There is no “balancing” of the budget in Ryan’s plan.
All Ryan does is pull the throttles back a few hundred RPM from a full power crash into terrain in the future.
Simpson-Bowles does contain spending cuts and reduction in future programs.
The “problems” with S-B is that it touches some very sensitive areas for both parties:
- for the GOP, there are defense cuts. The GOP has bought a seat on the train to Stupidville with the idea that there “...shall be no defense budget cuts, ever....”
- for the DNC, there are major increases in required contribution to federal pensions by federal employees, changes in Social Security (raising the first collection age), changes in Medicare, etc.
- for both parties, there’s some enforcement mechanisms which take power away from committee chairmen in Congress...
so of course, Congress wants nothing to do with this proposal.
That is why we are in the mess we are in.
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