Tax breaks would be tough to cut, congressional research says
By Lori Montgomery,
WashPost
Updated: Friday, March 23, 11:38 AM
The vast majority of tax breaks in the U.S. tax code would be hard to cut because they promote important social goals or are “hugely popular” with voters, according to a new congressional analysis that casts doubt on Republican promises to substantially lower tax rates without adding to budget deficits.
The report, released this week by the nonpartisan Congressional Research Service, comes as both parties are pitching the idea that overhauling the tax code to throw out “special-interest” credits and deductions could raise more than $1 trillion a year in fresh revenue. Republicans want to use the cash to lower tax rates, while Democrats argue that a portion should be reserved for reining in record budget deficits.
Just this week, House Budget Committee Chairman Paul Ryan (R-Wis.) unveiled a 2013 budget blueprint that would lower the top income tax rate paid by the wealthiest households from 35 percent to 25 percent by wiping out “tax shelters” and “lobbyists’ loopholes.”
Such a sharp reduction in rates is theoretically possible, the CRS report says. Indeed, if Congress threw out every tax break that benefits U.S. households, federal tax collections could surge by more than $1 trillion a year. If all that money were returned to taxpayers in the form of lower rates, there would be more than enough cash to meet the GOP rate target without driving budget deficits higher.
(More here.)
WashPost
Updated: Friday, March 23, 11:38 AM
The vast majority of tax breaks in the U.S. tax code would be hard to cut because they promote important social goals or are “hugely popular” with voters, according to a new congressional analysis that casts doubt on Republican promises to substantially lower tax rates without adding to budget deficits.
The report, released this week by the nonpartisan Congressional Research Service, comes as both parties are pitching the idea that overhauling the tax code to throw out “special-interest” credits and deductions could raise more than $1 trillion a year in fresh revenue. Republicans want to use the cash to lower tax rates, while Democrats argue that a portion should be reserved for reining in record budget deficits.
Just this week, House Budget Committee Chairman Paul Ryan (R-Wis.) unveiled a 2013 budget blueprint that would lower the top income tax rate paid by the wealthiest households from 35 percent to 25 percent by wiping out “tax shelters” and “lobbyists’ loopholes.”
Such a sharp reduction in rates is theoretically possible, the CRS report says. Indeed, if Congress threw out every tax break that benefits U.S. households, federal tax collections could surge by more than $1 trillion a year. If all that money were returned to taxpayers in the form of lower rates, there would be more than enough cash to meet the GOP rate target without driving budget deficits higher.
(More here.)
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