Fiscal Commission's Report a Work-in-Progress
Fiscal Times reported yesterday that the fiscal commission on the deficit’s co-chairmen “released their final proposal Wednesday morning (requires Adobe) after acknowledging they probably don’t have the votes to win the necessary super-majority backing for their nearly $4 trillion deficit-reduction plan that combines spending cuts, tax increases, and major entitlement changes.”
The National Taxpayers Union released a second press release today, entitled:
“Fiscal Commission’s Final Report, Like Its First Draft, Is a Work in Steady but Limited Progress”
Today’s remarks from the NTU supplement those made on November 11, 2010. In the press release, Pete Sepp presents seven findings, among them the one below. It makes the point that the commission “assumes that federal revenues should stabilize at 21% of Gross Domestic Product (GDP) when the historical average is closer to 18%, a point we made in our November 29, 2010 growls. The final two “supplemental” findings from the NTU were:
“Although the commission’s final outline gives more encouraging words to the need for a simpler, economically-efficient tax system, like the Chairmen’s earlier draft it envisions nearly $1 trillion in net tax increases instead of aiming for a revenue-neutral overhaul. “The latest report acknowledges that its reform blueprint could yield higher revenues by spurring economic expansion,” Sepp observed. “Why not just allow this effect to help balance the books instead of forcing taxpayers to pluck even more from their already-thin wallets?”
“The Commission commendably foresees phasing out the Alternative Minimum Tax and creating a more logical “territorial” corporate tax system, but policymakers have yet to devise better mechanisms to ensure that tax rates will fall as the base is broadened (thereby avoiding discriminatory tax policy toward energy and other sectors). Ultimately, constitutional rules such as a Balanced Budget Amendment or a 2/3 “supermajority” vote requirement for tax increases will be necessary to protect taxpayers from long-term fiscal irresponsibility.
We’ll keep ACTA members apprised of additional analyses of the commission’s work by NTU. The website of the Fiscal Commission on Fiscal Responsibility and Reform here. There is no phone number listed, but the general inquiry e-mail address is commission + fc.eop.gov.