Tag Archives: tax revenues

The Sequester

Yesterday, our lawmakers allowed us the privilege of $85 billion worth of spending cuts. Republicans promise that this will help put the United States back on solid fiscal footing. I don’t see it that way. The sequester looks to me like a lot of pain without much, if any, gain.

what is driving the deficit

From CBPP:

The recession battered the budget, driving down tax revenues and swelling outlays for unemployment insurance, food stamps, and other safety net programs.[3] We calculate that changes in the economic outlook since the summer of 2008 account for over $400 billion of the deficit in both 2009 and 2010 and smaller amounts in later years. We estimate that the downturn has pushed up deficits by $2.5 trillion (including the associated interest costs) over the 2009-2018 period.

More from CBPP:

We have slightly revised our estimates of the automatic budget cuts — known as sequestration — scheduled to begin March 1 under the “fiscal cliff” deal reached at the start of the year. The table below lays out what will happen if sequestration, required by the 2011 Budget Control Act, takes effect as scheduled.

The fiscal cliff deal lowered the 2013 sequestration by $24 billion, from $109.3 billion to $85.3 billion. This shrinks the percentage cuts in full-year funding for most programs subject to the automatic cuts. However, the fiscal cliff deal did not affect the Medicare cut, which remains capped at 2 percent.

We need jobs. We don’t need an economic slow down which is exactly what it going to happen. Continue reading The Sequester

Fiscal Cliff: Déjà Vu

While we are thinking about the Fiscal Cliff we need to think about fixing our country.

 

From Robert Reich:

So the bidding has begun.

According to the Wall Street Journal (which got the information from GOP leaders), the President’s opening bid to Republicans is:

— $1.6 trillion in additional tax revenues over the next decade, from limiting tax deductions on the wealthy and raising tax rates on incomes over $250,000 (although those rates don’t have to rise as high as the top marginal rates under Bill Clinton)

— $50 billion in added economic stimulus next year

— A one-year postponement of pending spending cuts in defense and domestic programs

— $400 billion in savings over the decade from Medicare and other entitlement programs (the same number contained in the President’s 2013 budget proposal, submitted before the election).

— Authority to raise the debt limit without congressional approval. Continue reading Fiscal Cliff: Déjà Vu

Tax cuts and tax revenue

I think that it is pretty amazing that conservatives are still pushing the craziness that is the idea that tax cuts create more tax revenue. It is amazing that many Americans have jumped on this train. It is exactly like my telling you that you can eat all of the ice cream that you want and not gain any weight. It is that crazy.

Let’s look at this slowly. If I cut taxes, that will reflectively increase tax revenue? So in theory if you keep cutting taxes to zero that would maximize tax revenue? Really? That doesn’t make any sense.

Let’s look at the Bureau for Economic Analysis’ data. Conservatives hold up Reagan as the great tax cutter. So let’s look at tax revenues from his great tax cut.

Wow. It looks as if revenues decreased after Reagan’s great tax cut and never returned to their previous level. I’m just saying… this idea that you can cut taxes and increase revenue may happen at some time in the future, somewhere in the universe. It just hasn’t happened in the US during the last 40 years.