We present new estimates of the budget outlook, incorporating the latest projections by the Congressional Budget Office (CBO). Even with the economy recovering fully by 2018, current policy will result in deficits close to $9 trillion (4.5 percent of GDP) over the next decade, with the debt-to-GDP
Senior Fellow Eugene Steuerle examines how the nation turned from a period of significant fiscal slack to one in which concern over deficits ruled federal policymaking for more than two decades, and why presidential candidates today feel so constrained from proposing major policy shifts despite
Senior Fellow Eugene Steuerle explores the issue of planning in governmental affairs, arguing that of late, the political debate is mainly over who will do the planning, not whether the planning itself is excessive.
A value added tax (VAT) with a broad base and a VAT that excludes food, housing, and medical care would both impose larger burdens as a share of income on low-income than on high-income taxpayers. A rebate aimed at low-income taxpayers would reduce their VAT burden more than exclusions of selected
Leonard Burman's testimony before the Senate Budget Committee on tax reform to encourage economic growth, reduce the federal deficit, and to promote fairness.
In this chapter, we propose a value-added tax (VAT) to contribute to the U.S. fiscal solution. A 5 percent broad-based VAT, paired with subsidies to offset the regressive impacts, could raise about 1 percent of GDP per year. International experience suggests that the VAT can raise substantial
If the United States undertakes actions to address the risks of climate change, the use of coal in the power sector will decline rapidly. Twenty-six US counties are classified as “coal-mining dependent,” meaning the coal industry is a major employer. In these areas, the industry is also an
The Tax Cuts and Jobs Act (TCJA) would reduce tax revenue by nearly $1.5 trillion over the 10-year budget window from FY2018 to FY2027. Analysis by the Tax Policy Center shows that the tax cuts would tilt heavily toward the highest fifth of the income distribution, largely the result of cuts to the
Urban Institute Senior Fellow, C. Eugene Steuerle, testifies before the U.S. House of Representatives Committee on the Budget, making recommendations on the Trustees Report on Social Security.
In the next few years, several factors will push tax issues to the forefront of policy discussions. First, under current law, almost all of the Bush Administration's tax cuts will expire at the end of 2010. A second factor is the rapid growth in the alternative minimum tax (AMT), which will
A good tax system raises the revenues needed to finance government spending in a manner that is as simple, equitable, stable, and conducive to economic growth as possible. But the challenge for the next President will be to make reform work not just in the abstract, but in the real world, where
State tax revenues showed continued growth in the first half of fiscal year 2020. State government tax revenues from major sources showed solid year-over-year growth at 6.6 percent in the fourth quarter of 2019. Preliminary data show strong growth in January and February before declines in March as
Mark Mazur, Director of the Urban-Brookings Tax Policy Center, testified before the Joint Economic Committee during a hearing entitled “Unleashing America’s Economic Potential.” In his testimony, Mazur presented a review of the principles of desirable tax policy, clear and less clear findings about
States vary in how much governments collect in revenue and spend on goods and services. To understand the sources of these differences, we examined what states could raise (revenue capacity) and would spend (expenditure need) if they followed national averages, taking into account their own
The tax cuts enacted in 2001 and 2003, known as the Bush tax cuts, are set to expire Dec. 31, and the fight over what to do is increasingly heated. Should the tax cuts expire, as some Democrats have said? Should they be extended, as most Republicans maintain? Or does the answer lie somewhere in
More than two years after the official end of the Great Recession, state governments still face significant budget deficits. The consensus solution to this problem is for states to save money during boom times (via budget stabilization or rainy day funds) and to draw on those savings during
Effective tax rates (ETRs) measure how much people pay in taxes as a percentage of their pretax incomes. That seems simple, but theres an important complication: there are different ways to measure how much someone pays in taxes and how much he collects in pretax income. Those choices matter a
Rosanne Altshuler, codirector of the Urban-Brookings Tax Policy Center, answers five questions about tax reform and her experience as chief economist on President Bush's 2005 tax reform panel. The panel's report, Altshuler said, should serve as a blueprint for President Obama's tax reform
NOTE: TPC updated its analysis of Donald Trump's tax plan on October 18, 2016. The revised analysis is available here . The estimates in this 2015 report should no longer be cited. Please use the updated estimates from the October 18 analysis. On July 12, 2017, TPC released implications of
“Sin taxes” are often viewed as budget saviors, though they play a rather small role in state budgets. Although states raise revenue from sin taxes, policymakers should be mindful of these taxes’ limitations. Absent policy changes (such as increased tax rates), long-term growth for sin tax revenue
This paper reviews why Social Security fails to lift more aged low-wage workers and people of color out of poverty. It examines the payroll tax and benefit formula and reviews literature about OASDI outcomes by race, gender, and earnings level. It describes how mortality, earnings, disability,
There are many items in the tax law that add significant complexity with little gain in some other area like equity or efficiency. Almost no one would introduce many provisions now in current law, if designing a Code from scratch. Once there, however, these complexities are hard to remove.
This paper reviews recent economic events and their impact on U.S. fiscal performance and prospects. We highlight the historic nature of the 2009 budget outcomes, the unsustainability of plausible ten-year budget projections, and the increasingly dire long-term fiscal problem. These conditions