Note to the Rich: Don’t Spend All of Your Payroll Tax Cut Yet
After much anguish, Congress finally extended this year’s payroll tax cut for two more months. The final bill passed in nearly empty chambers a couple of days before Christmas. But this version...
View ArticleShould States Use Tax Breaks to Woo Seniors?
We’ve all seen the articles in Forbes, Kiplingers, or U.S. News trumpeting the best states to live in retirement. A key measure for them all: Low taxes. What you may not know is that states actively...
View ArticleTime to End Washington’s Trust Fund Gimmicks
Why do we bother with government trust funds? As the Senate’s just-passed highway bill proved yet again, Congress is turning these funds into little more than accounting shams. In theory, it makes...
View ArticleWill the 2010 Health Law Cut the Deficit or Add to It?
In a new study, Chuck Blahous, who is a public trustee for Medicare and Social Security, concludes that the 2010 health law will add at least $340 billion to the federal deficit from 2012-2021. This is...
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Payroll Taxes Cover About a Third of Medicare Costs
I get the impression that many Americans believe Medicare is financed like Social Security. They know that a portion of payroll taxes goes to Social Security and a portion goes to Medicare. So they...
View ArticleA Modest Proposal: Five Ways to Tax the 47 Percent
Let’s say you are truly offended that 47 percent of Americans don’t pay income tax. Just complaining won’t fix the problem. All those freeloaders are still out there, dodging their responsibilities as...
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Social Security & Medicare Lifetime Benefits
How much will you pay in Social Security and Medicare taxes over your lifetime? And how much can you expect to get back in benefits? It depends on whether you’re married, when you retire, and how much...
View ArticleCongress Can’t Avoid Tax Rate Hikes By Closing “Loopholes”
You can tell when Congress and the President have tough choices to make. That’s when they trot out the euphemisms—all aimed at making what they are about to do sound as benign as possible. Case in...
View ArticleHow to Control Entitlements: A Challenge Ike Did Not Face
Yesterday, I described President Eisenhower’s remarkable success in turning a large deficit in fiscal 1959 into a balanced budget in 1960. It was one of the biggest fiscal consolidations since World...
View ArticleWhat Adjusting the Price Index Would Mean for Taxpayers
President Obama and House Speaker John Boehner may be close to agreeing on a plan that, among other things, would revise the way government programs are adjusted for inflation. Most attention is...
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How Obama’s Inaugural Address Frames the Policy Debate for the Next Decade
“We must make the hard choices to reduce the cost of health care and the size of our deficit. But we reject the belief that America must choose between caring for the generation that built this...
View ArticleThe Risks of Dumbing Down Fiscal Goals
In one of the more dangerous fiscal developments of recent months, some on the left are defining successful deficit reduction as merely stabilizing the federal debt at about 70 percent of Gross...
View ArticleBowles-Simpson II: A New Plan to Avoid the Sequester
With 10 days to go until the dreaded sequester—the automatic across-the-board spending cuts that most lawmakers profess to hate—the Washington drama machine is starting to get in gear. Today, President...
View ArticleChanging Government’s Inflation Measure Would Raise Taxes as Much as it Would...
Changing the way government adjusts spending and taxes for inflation is one of those issues that continues to hang around the edges of the budget debate. Republicans and many economists argue for...
View ArticleDo We Need an Election to Fix the Deficit?
I spent this morning at one of those Washington institutions: the budget roundtable. Today’s (at the Aspen Institute) gave me a chance to pose a question in exchange for my muffin: Should Washington...
View ArticleFixing Social Security Isn’t Hard
Social Security has two obvious problems. While the system is not “broke,” as some insist, it will have only enough money to provide future retirees with about three-quarters of their promised...
View ArticleShould Congress Cut the Deficit By Changing the Way it Indexes Taxes for...
Should Congress use a new measure of inflation to index the tax code? It sounds awfully technical—and it is—but shifting to what most economists believe is a more accurate measure of inflation would...
View ArticleTen Things You Should Know About the Debt Limit Deal
Now that we’ve had a few days to absorb the debt limit agreement signed by President Obama on Aug. 2, it might be useful to review what it did– and did not–do. Here’s my Top Ten list. It avoided an...
View ArticleRick Perry’s Social Security Myth
Texas Governor Rick Perry is being rightly criticized for his loony claims about Social Security in last night’s GOP presidential debate. But what troubles me the most is this whopper: “It is a Ponzi...
View ArticleWhat the Great Budget Debate Is Really About
Want to know what the Great Budget Debate of 2011 is really about? Ask Congressional Budget Office director Doug Elmendorf (who was a Tax Policy Center associate before joining CBO). In testimony to...
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