A deal based on the Fiscal Commission would include higher taxes
There's a bit of talk about the Warner/Chambliss/Durbin/Crapo/Coburn/Conrad effort to make legislation out of the Fiscal Commission's final report. Jon Chait and Steve Benen are annoyed, however, to read in Jonathan Weissman's article that "the deficit commission's version of tax reform would net $180 billion in additional revenues over 10 years." Chait notes that $180 billion would mean there's "nearly ten times as much spending cuts ($1.7 trillion) as higher revenue ($180 billion.) ... It's so nuts I'm tempted to assume this story couldn't possibly be correct."
At least as far as the Fiscal Commission's report goes, Chait is right and the number is incorrect. "Weisman said that the Fiscal Commission got $180 billion in tax revenue relative to the baseline over ten years," one of the commission's staff members told me. "That's wrong. The tax reform piece brought in $180 billion in 2020 alone, and $785 billion over ten years." You can see that in the table atop this post, which comes from the report.
I guess it's possible that the senators themselves have decided to edit the Fiscal Commission's report so it includes $600 billion less in tax revenue, but no one I've spoken to in those offices seems to think that's happened. So I'll try to get a firmer statement on this in one direction or the other and report back. But for now, my understanding is that the idea is to make the Fiscal Commission's report into legislation, not radically change its mix of revenues and spending cuts, and so I'd assume they're still targeting $785 billion.
But one thing to note: The baseline the Fiscal Commission was using assumed the expiration of the high-income tax cuts. So the way to think of the tax increases they recommended was that first the Bush tax cuts for income over $250,000 would expire, and then you would reform the tax code and add $785 billion in revenues. In a world where none of the Bush tax cuts are allowed to expire, the $785 billion doesn't get revenues anywhere near where the Fiscal Commission's report said they should be.
Posted by: pjro | February 17, 2011 4:01 PM | Report abuse
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