Reforming Taxes and Raising Revenue: Part of the Fiscal Solution

June 3, 2011 - The nation’s fiscal problems create both challenges and opportunities for raising revenues and reforming taxation. In a new paper, Bill Gale and Ben Harris examine the fiscal problems and tax structure of the United States and conclude that we need both tax reform and higher revenues. They then discuss the rationale for and effects of three sets of tax changes:

• reform of income tax expenditures
• implementation of a value-added tax (VAT)
• creation of new or increased taxes on nonrenewable energy use

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UPDATED! Tempting Fate: The Federal Budget Outlook

June 2, 2011 - Bill Gale and Alan Auerbach find that the federal budget outlook has changed little over the past year. Deficits will exceed 6 percent of GDP at the end of the decade, even with strong economic growth, and the debt-GDP ratio will reach nearly 100 percent by 2021. Only significant changes in entitlement and health spending will improve the situation.

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