The progressivity of Simpson-Bowles cont'd
A number of the fiscal commission's staffers have been in touch to argue that the "current law baseline" that the Tax Policy Center is judging their proposal against isn't very useful. That's a world in which the Bush tax cuts expire. Compared with a world in which the Bush tax cuts are extended -- which they rightly argue is the world we're probably facing -- they say the commission's first tax option is distributionally neutral, or even slightly progressive.
But it's worth taking a step back on this: What it means, essentially, is that President Obama's fiscal commission is offering tax-reform options that are substantially less progressive than the rates we saw under Bill Clinton and quite near to the distributional preferences of George W. Bush. And that's after they threw in a cap on the maximum amount of revenue the federal government can raise. Change we can believe in, I guess.
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