Taxes

Is the Gang of Six Debt Plan a Tax Increase?

|

The debt ceiling is on fire?

The short answer is: probably, but it depends on how you measure it. Via Reason columnist Veronique de Rugy, former Congressional Budget Office director Donald Marron does a nice job of explaining several common ways of measuring whether or not the plan will result in a net tax increase. CBO and the Joint Committee on Taxation are required to measure legislation against an unchanged current law—as if Congress simply went home and never passed new laws, overrode scheduled cuts, or extended old provisions, it's a tax cut. That's how the plan's supporters can get away with saying that it will lower taxes by $1.5 trillion. But as The Wall Street Journal's David Wessel explains in another look at the plan's tax-cut claims, current law is a dubious measure because "no one expects current law to prevail." And compared with current policy, a more realistic assessment of how Congress is likely to let current legislation play out, the results are quite different. According to Marron, by that standard, the Gang of Six plan, if executed as written, would represent about a $2 trillion tax increase. 

NEXT: Utah's Liquor Laws: Still Crazy, but Less So (I Think)

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Tax increase, not a commitment to cut spending, but just to think really hard about it, etc.

    This is a joke.

    1. Dude, I’m just ready for the default to occur. I have to go out and acquire plenty of weapons, but I think I’m prepared to fight off the zombie horde.

      1. It’s the school teachers and old people I fear. [headshot]

    2. A suspect has been arrested in connection with the shooting of a young man from southwest Philadelphia on SEPTA’s Broad Street line Saturday afternoon.

      Late yesterday, police arrested a 17 year-old from North Philadelphia; they’re not releasing his name because he’s a juvenile.

      Nothing else happened.

      http://philadelphia.cbslocal.c…..d-robbery/

      1. How curious: Philadelphia has, by far, the most restrictive gun control of any jurisdiction in Pennsylvania.

  2. I’m curious to know what the specific revenue raising provisions are.

    If they are limited to eliminating deductions, credits, and loopholes, then we should be considering it a good thing.

    If they can actually come up with structural changes to entitlements as well, I will be astonished, but happy.

    1. why do you think eliminating deductions, credits and so-called loopholes is a good thing?

      1. Wider base, lower marginal rates. Less payoffs via the tax code.

      2. Recall the credit card interest deduction and the distortions that caused? When it was eliminated the mortgage interest deduction became a means for some to keep that fix flowing into their veins. No more bargaining with the devil and thanking him for the tiny scraps of the pie he pushes our way instead of someone else. That only props up the insane and highly stupid system of taxation we currently employ.

        1. BTW, I do benefit from it because I own rental units. That is precisely why I want it eliminated. It is a subsidy that I minimize to the extent I am in compliance with the law, but try explaining that motivation to an accountant you have never worked with before. He rolls his eyes thinking I’m nuts.

        2. Clarify, I have benefited in the past. Bank no longer has a claim.

      3. The tax code should not give anyone a market advantage by taxing some people disproportionately more than others.

        Our complex tax code has become a tool of government intervention and manipulation of the economy.

      4. I coudln’t agree more about tax reform, and we definitely need tax reform, but the answer to “how should be balance the budget” isn’t to give them more money by increasing taxes, which it means when you say “eliminate deduction and credits and loopholes”

        BTW “loopholes” is just a word for a deduction you don’t like.

        1. Um… non-drunk version.

          I agree about tax reform, and that the tax code is a big tool for the congress to play favorites and give away favors, and we definitely need tax reform, but the answer to “how should they balance the budget” isn’t to give them more money by increasing taxes, which is exactly that it means when you say “eliminate deduction and credits and loopholes”

          BTW “loopholes” is just a word for a deduction you don’t like.

    2. Structural changes to entitlements are not not necessary.

      If our country would just let go of this childish notion that the raising taxes on the rich to the levels they have been throughout most of the last century is anathema to a free society, we would have enough revenue. Remember in the last century when the rich starved because of suffocating tax rates? Me neither.

      If tax rates for the rich are off the table, then by definition you are not serious about tackling our debt.

      1. I’m sorry, we’re not serious about tackling the debt if we don’t support raising taxes on people who already pay more than their fair share? It’s not serious to think that cutting federal funding for all of the things that the feds do that aren’t specifically authorized by the constitution would more than correct the problem? How about if I suggest that we could cut our defense budget by about a third on top of that?

        Yeah, I can see how I couldn’t possibly be considered part of a discussion on this, since I don’t automatically default to; let’s see how we can use this scary situation to increase the size and power of the federal government. Sorry, I don’t even know why I posted.

        1. I didn’t hear libertarians complaining about the size of the deficit and the bloated military spending when Bush was president.

          It wasn’t until the threat of taxing the rich as a way to reduce the debt that suddenly libertarians called for these sorts of cuts.

          Again, you are too late to the table. Let the adults work out a compromise that isn’t a giveaway to the rich.

          1. Apparently you have selective hearing. I didn’t even frequent this site or other libertarian blogs then, and I heard plenty of complaining about the deficit during the Bush years on conservative sites. Especially during the tarp 1 discussions. It’s kinda been an ongoing complaint for a very long time.

            1. A few conservative blogs and editorials here and there noting Bush’s excessive spending is not the same as the all out conservative assault on Obama via protests and incessant complaining on talk radio and Fox News. Spending money didn’t become a worse proposition just because Obama came to office.

              1. Spending money didn’t become a worse proposition just because Obama came to office

                No, it became a worse problem because Obama is spending a shitload more than even Bush did, moron.

                1. Obama is spending more money in order to clean up the mess Bush left behind. Spending money on reviving an economy is perhaps worth more than fighting unnecessary wars.

                  1. My expenses are too high, and income to low. I know, spend more, that’ll fix it!!!

                    Oh, and I’ll agree with you on the unnecessary wars. In fact lets get rid of both, spending on unnecessary wars, and unnecessary government programs. Then we could lower taxes, cause we wouldn’t need so much, and the pressure relief on the economy would fix that too.

                    1. Obama’s “cure” hasn’t done fuck-all to fix anything, Tony.

                      You leftists are just salivating at the thought of jacking up tax rates, thereby sating the blood-thirst you instill in the gullible wealth-envy-hungry crowd.

                      We could be ten trillion in the black ink, and you fuckers would STILL call for taxing the rich.

          2. Oh grow up Tony.

            Conservatives didn’t complain as much about Bush’s spending for the EXACT SAME REASONS that liberals aren’t complaining about Guantanamo or wiretapping as much now.

            Stupid and hypocritical both, but move the fuck on. Saying that the other side’s hyposcrisy justifies your own is retarded.

            1. Good calls, Hazel and califronian.

          3. “I didn’t hear libertarians complaining about the size of the deficit and the bloated military spending when Bush was president.”

            It’s like you dont’ know how to read. In fact, the explains most of your confusion about most things.

  3. Slate dot com laid out how no positive action from congress to balance the budget is required. All congress has to do is let spending increases and tax cuts expire on schedule. Then we have a balanced budget on auto-pilot.

    http://www.slate.com/id/2291054/

    Sweet.

    Unless, of course, you’re going “full Joker” and just want everything to burn.

    1. That “plan” depends on ObamaCare actually saving money. Which it wont.

      1. …and the economy growing despite the higher taxes (not happening now), and doctors accepting the lower payments, and the middle class accepting a hard buggering from an unadjusted AMT, etc…

      2. Honestly, how can Obamacare be allowed to stand with the fiscal situation being what it is? Aside from its unconstitutionality, we obviously can’t afford it.

        1. Right, we can’t afford a bill that lowers costs. I would find this childish libertarian fear of a bill that they haven’t read charming if it weren’t so sad and downright dangerous.

          But don’t worry, perhaps you will get your way, the bill will be overturned and the country will suffer a fiscal train wreck.

          And then maybe, we will realize that perhaps taking the profit out of health care is the best may to maximize quality and single payer will be instituted. I won’t hold out hope in a country where Fox News informs the majority of the people, though.

          1. Will it still lower costs after the Medicare cuts get eliminated?

            What sort of person are you, if you’re willing to pull the plug on granny? People will die if those cuts are made!

            1. Taking the profit motive out of health care will lower costs. Medicare and Medicaid are costly because they are paying rates set by the drug companies.

              1. Why stop at health care? Let’s take the profit motive out of everything. Then EVERYTHING will go down in price. Can’t wait.

              2. Taking the profit motive out of health care will lower costs.

                Do you really think government-contracted medical supliers will have no profit motive?

                Does it work that way in the defense industry? You know how cost-plus bidding works, right?

                The profit motives and greed of the consumers and insurance companies normally push back against the hospitals and medical suppliers, but we’ve eliminated that factor through government regulation.

                What we ought to be doing is setting the profit motive loose completely. That would do a much better job of reducing costs than trying to make humans stop responding to financial incentives.

    2. That assumes Congress let’s docs take the scheduled 20%+ hit in Medicare payment in January.

  4. So let me see if I get this straight. Ending tax deductions for private jets and oil companies = raising taxes. Ending tax deductions for mortgages, earned income, children, etc (i.e. stuff that non-rich people use) = not raising taxes.

    Can your hypocrisy be any more blatant?

    1. How about cutting spending? I know that’s a way-out there radical type idea. I mean, how in the fuck can the federal government possibly operate on a measly 2,000,000,000,000 dollars a year?

    2. What deductions are there for private jets and oil companies?

      1. The 2008 stimulus bill allowed corporations to write-off the expense of jets based on an accelerated depreciation schedule. Pretty sexy huh?

        I forgot the oil one – it’s equally meaningless for an industry that pays many billions in taxes each year.

        1. Pretty amazing that Obama has been out there railing against something that he pushed and signed into law and no Republicans voted for. And some people doubt his abilities to walk on water.

      2. Corporate jets = teh bad

        Corporate dump trucks = teh good.

        1. Before his retirement, My old man flew on a corporate jet all the time. It was the fastest way to get to the various far-flung stores of the retail chain he worked for. It certainly beat driving and/or commercial airlines with their set time tables.

    3. As far as they’re concerned it all belongs to them anyway.
      Whatever they allow us to keep is a gift.

  5. I better replenish my supply of *shocked* faces for the exciting conclusion of these **cough** negotiations.

    1. +1
      Exactly

  6. Is the Gang of Six Debt Plan a Tax Increase?

    IT’S A COOOOOOK BOOOOOOK!!!

  7. CBO and the Joint Committee on Taxation are required to measure legislation against an unchanged current law?as if Congress simply went home and never passed new laws, overrode scheduled cuts, or extended old provisions, it’s a tax cut. That’s how the plan’s supporters can get away with saying that it will lower taxes by $1.5 trillion.

    Now you’re getting it! Not raising taxes = tax cuts. Anything not a tax = lost revenue.

  8. It’s not a tax increase, it’s a revenue enhancement! There is a big difference!

    1. The scary term is “tax expenditures”. Pure fucking Orwellian.

  9. Why don’t the feds just declare all property everywhere as state assets, prohibit private transactions, and create a cult of personality for Barack “Cunt-in-Chief” Obama? It worked for North Korea.

    Who needs taxes?

  10. OMG, I had totally forgot about the Bloodhound Gang. I’m going to Youtube right now!

  11. The Feds took in 2.16 Trillion Dollars in just taxes last year (one dollar bills laid end to end to the moon and back 200 times!). These idiots can’t run a country on that kind of cash? No wonder they’re politicians rather than business people.

    1. Their intentions are in the right place, and that’s what really matters.

      1. That’s what people actually believe!

  12. Never have so few taken from so many for so long…

    1. That’s never have so few taken so much from so many for so long, in exchange for so little.

  13. The Bloodhound Gang’s Bad Touch video is the greatest MV of all time (I don’t care what Kanye says).

    Watch, and tell me you don’t agree:

    http://www.youtube.com/watch?v=xat1GVnl8-k

    1. The lyrics were great, but what about the midgets?

    1. Meh, that was just a photo collage.

Please to post comments

Comments are closed.