Tax Revenue Adjustments to Baseline

Rather than assume a baseline that projects future revenues that would accrue under current tax law, the budget assumes a baseline that permanently indexes the alternative minimum tax (AMT) for inflation, extends the 2001 and 2003 income tax cuts beyond their scheduled sunset in 2011, permanently extends the estate tax with 2009 parameters, and makes permanent provisions reducing the marriage penalty for the earned income tax credit (EITC) and expanding refundability of the child tax credit (CTC).* Those assumptions reduce tax revenues by more than $3.8 trillion over the next decade. Given that baseline, proposals that would reinstate portions of pre-2001 tax law show up as revenue raisers, even though they would occur as a matter of course if Congress did not act to prevent them.

Index 2009 parameters of the AMT to inflation
Make 2009 estate tax permanent
Continue the 2001 and 2003 tax cuts

Footnote

* See earlier discussion of the proposals included in the administration's baseline regarding the EITC and the child tax credit.