While the payroll tax rates for Hospital Insurance and OASDI have increased since 1966, the HI rate has risen faster. The HI rate is now almost one-quarter of the OASDI rate. Orszag concludes that removing the current $87,000 cap on taxable payroll under OASDI would raise a substantial share of...
Analyses of the private pension system typically focus on such issues as how to improve overage or encourage saving or prevent tax abuse or generate retirement income more equitably. Those issues are important, but the thesis of this paper is that more attention needs to be paid to the structure...
[Boston Globe] Like Massachusetts, state governments across the nation are facing budget deficits of historic proportions. Next year, they will face combined projected shortfalls of between $70 billion and $85 billionor about 15 percent of all the money they spend out of their general...
This paper examines long-term fiscal discipline and economic performance, with two main results. First, declines in budget surpluses (increases in deficits) reduce national saving and therefore reduce future national income, regardless of their effect on interest rates. Second, increases in...
The Bush Administration's budget includes a chapter entitled "The Real Fiscal Danger," which highlights the projected imbalances in Social Security and Medicare. Ironically, the budget does not include any specific steps to eliminate or even reduce those imbalances. It does, however, propose...
A recent Congressional Budget Office report presented many estimates, both positive and negative, for the effect of the presidents proposed tax cut on the economy. In issuing this report, CBO indirectly called into question many of the more nave statements made about the ability of Congress to "...
[United Press International] Would most Americans be in favor of raising payroll taxes on the middle class to finance huge income tax cuts for the rich? Unquestionably, no. Yet, that is exactly what President Bush is now proposing. He argues for cutting tax rates on high-income families,...
In the face of a stagnant economy, a war, a rapidly deteriorating short-term fiscal outlook, and a substantial long-term fiscal problem, the Bush Administration has proposed massive, regressive, permanent tax cuts that it acknowledges are unsustainable. This paper shows that under realistic...
Dynamic score-keeping -- the recording of budget feedback effects as people react to government actions such as tax cuts -- is a hot topic again, fueled in part by the recent release of a Congressional Budget Office study of the revenue effects of the president's tax proposals. The topic is also...
State tax revenues were $32 billion lower in 2002 than in 2001, the first year over year revenue decline in recent history.1 Since then, budget conditions have deteriorated further, with an aggregate budget gap of $49 billion in 2003, according to the National Conference of State Legislators....
Taxable Payroll and Payroll Tax Rates
While the payroll tax rates for Hospital Insurance and OASDI have increased since 1966, the HI rate has risen faster. The HI rate is now almost one-quarter of the OASDI rate. Orszag concludes that removing the current $87,000 cap on taxable payroll under OASDI would raise a substantial share of...
Reality Testing for Pension Reform
Analyses of the private pension system typically focus on such issues as how to improve overage or encourage saving or prevent tax abuse or generate retirement income more equitably. Those issues are important, but the thesis of this paper is that more attention needs to be paid to the structure...
Biting the Budget Bullet
[Boston Globe] Like Massachusetts, state governments across the nation are facing budget deficits of historic proportions. Next year, they will face combined projected shortfalls of between $70 billion and $85 billionor about 15 percent of all the money they spend out of their general...
The Economic Effects of Long-Term Fiscal Discipline
This paper examines long-term fiscal discipline and economic performance, with two main results. First, declines in budget surpluses (increases in deficits) reduce national saving and therefore reduce future national income, regardless of their effect on interest rates. Second, increases in...
The Real Fiscal Danger
The Bush Administration's budget includes a chapter entitled "The Real Fiscal Danger," which highlights the projected imbalances in Social Security and Medicare. Ironically, the budget does not include any specific steps to eliminate or even reduce those imbalances. It does, however, propose...
Making the Right Case for Dynamic Analysis
A recent Congressional Budget Office report presented many estimates, both positive and negative, for the effect of the presidents proposed tax cut on the economy. In issuing this report, CBO indirectly called into question many of the more nave statements made about the ability of Congress to "...
Higher Payroll Taxes? Why?
[United Press International] Would most Americans be in favor of raising payroll taxes on the middle class to finance huge income tax cuts for the rich? Unquestionably, no. Yet, that is exactly what President Bush is now proposing. He argues for cutting tax rates on high-income families,...
Faith-Based Budgeting
In the face of a stagnant economy, a war, a rapidly deteriorating short-term fiscal outlook, and a substantial long-term fiscal problem, the Bush Administration has proposed massive, regressive, permanent tax cuts that it acknowledges are unsustainable. This paper shows that under realistic...
Score-Keeping and Spending
Dynamic score-keeping -- the recording of budget feedback effects as people react to government actions such as tax cuts -- is a hot topic again, fueled in part by the recent release of a Congressional Budget Office study of the revenue effects of the president's tax proposals. The topic is also...
State Tax Reaction Differs From Early 1990s Downturn
State tax revenues were $32 billion lower in 2002 than in 2001, the first year over year revenue decline in recent history.1 Since then, budget conditions have deteriorated further, with an aggregate budget gap of $49 billion in 2003, according to the National Conference of State Legislators....