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Somnabulist
Location: corner of No and Where
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Quote:
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Originally Posted by NCB
How so? OR do you mean less punitive?
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No, I'm pretty sure he meant less progressive:
From the nonpartisan Tax Policy Center :
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A special difficulty in evaluating the tax legislation enacted over the past few years is the presence of several prominent ‘‘loose ends.’’ First, the 2001, 2002, and 2003 tax cuts are scheduled to expire by the end of 2010, but virtually no one expects those expirations to be fully implemented. Second, even before the tax cuts were enacted, the number of taxpayers facing the alternative minimum tax was projected to rise markedly over time. The tax cuts, however, have substantially exacerbated the problem, helping to create a situation that is widely regarded as unsustainable. Finally, neither the enacted legislation nor the administration itself describes which specific future tax increases or spending cuts will pay for the tax cuts, even though those tax increases or spending reductions are the only way to finance the tax cuts over the long term. While those ‘‘loose ends’’ may appear to be technical distractions, their resolution is central to any conclusions about the effects of tax policy in the Bush administration. For the most part, our analysis focuses on scenarios in which (a) the provisions of the 2001 and 2003 tax cuts, but not the 2002 tax cuts, are made permanent; and (b) the AMT is adjusted so that the number of taxpayers facing the AMT in any future year is the same as it would have been in that year had the Bush tax cuts never been enacted. We also examine the effects of alternative methods of financing the tax cuts.
We find that, by any reasonable measure, making the tax cuts permanent would be unaffordable. Likewise, by any reasonable measure, the tax cuts are regressive. When the requisite spending cuts or other tax increases needed to pay for the tax cuts are included, the net effect will be to transfer resources away from low-income households and toward high-income households. The result will make most households worse off, even if the tax cuts generate economic growth (which itself becomes increasingly less likely the longer the tax cuts are not offset by other policy changes, as discussed further below).
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This report was authored by experts William G. Gale
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Bill Gale is a Senior Fellow and holds the Arjay and Frances Miller Chair in Federal Economic Policy in the Economic Studies Program at the Brookings Institution. He is deputy director of the Economic Studies Program and co-director of the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. His areas of expertise include tax policy, budget and fiscal policy, and public and private saving behavior and pensions, and intergenerational transfers of wealth. Before joining Brookings, Gale was an assistant professor in the Department of Economics at the University of California at Los Angeles, and a senior staff economist for the Council of Economic Advisers. He has also served as a consultant to the General Accounting Office and the World Bank.
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and Peter Orszag
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Peter Orszag is a Director of Competition Policy Associates, Inc. In addition to his position at COMPASS, Dr. Orszag is the Joseph A. Pechman Senior Fellow in Economic Studies at the Brookings Institution and Co-Director of the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. He previously served as Special Assistant to the President for Economic Policy at the White House, as Senior Economist and Senior Adviser on the President’s Council of Economic Advisers, and as an economic adviser to the Russian Government. His areas of expertise include fiscal and tax policy, Social Security, pensions, higher education, macroeconomics, and homeland security. Dr. Orszag graduated summa cum laude in economics from Princeton University, and obtained a M.Sc. and a Ph.D. in economics from the London School of Economics, which he attended as a Marshall Scholar. He is co-editor, with Jeffrey Frankel, of American Economic Policy in the 1990s (MIT Press: 2002), coauthor of Protecting the American Homeland: A Preliminary Analysis (Brookings Institution Press: 2002), and coauthor of Saving Social Security: A Balanced Approach (Brookings Institution Press: 2004).
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