Chart of the Day
| Fri Aug. 28, 2009 10:49 AM PDT
OK, it's not really a chart. It's a table. But it comes from CBPP and it takes a closer look at the recent headlines screaming that deficit projections have risen from $7 trillion to $9 trillion. Long story short, it's not true.
Here's why. The lower number is from the CBO and relies on its "baseline" budget calculation. This is an estimate of what would happen if current law remains unchanged forever, and as such it bears little resemblance to reality. In reality, the Bush tax cuts aren't going to disappear in 2011, Medicare reimbursements aren't going to be suddenly slashed, and the Alternative Minimum Tax won't be left alone to gobble up ever more income. As usual, the law will be changed to take care of all these things, just like it is every year.
So if you take a look at what the deficit would be under current real-life policies, and compare it to estimates under Obama's proposed policies, what do you get? As the table below shows, the real-life deficit isn't $7 trillion, it's more like $11 trillion. And the Obama deficit isn't $9 trillion, it's about $10.5 trillion once adjustments are made so that it can be compared to CBO estimates on an apples-to-apples basis. So the bottom line is simple: properly accounted for, the deficit actually goes down when you compare Obama's budget proposals to current policy, not up.
All the grisly details are here. Warning: not for the faint of heart.
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Comments
Bush tax cuts, 2011
Submitted by catclub (not verified) on Fri Aug. 28, 2009 11:15 AM PDT.
I thought the whole point of electing a democratic congress was to have
a group that would NOT extend the Idiotic Bush tax cuts when they are due to
expire.
Another interesting
Submitted by Anonymous (not verified) on Fri Aug. 28, 2009 12:40 PM PDT.
Another interesting chart:
"Banks 'Too Big to Fail' Have Grown Even Bigger
Behemoths Born of the Bailout Reduce Consumer Choice, Tempt Corporate Moral Hazard
Percentage Growth of Combined Assets
"
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/27/AR200908...
Congratulations Kevin, you should be proud of yourself, you took a big problem and made it bigger.
Indeed, what catclub
Submitted by John Casey (not verified) on Fri Aug. 28, 2009 7:50 PM PDT.
Indeed, what catclub said.
Why won't the Bush tax cuts be allowed to expire? Saves a significant chunk (2.2 billion) and would reduce the 10 year deficit by 20-25%.
Isn't this one of Obama's campaign promises? He said he would retain so much of the tax cut package as applied to those under $250,00/couple, but otherwise it would go away.
Before we raise taxes
Submitted by Got Change on Sat Aug. 29, 2009 3:23 AM PDT.
Before we raise taxes another dime on anyone how about fixing the tax code so that tax cheats like Charlie Rangel, Geitner, Daschle. Ron Kirk, Solis pay their fair share? The tax code is so perverted that these guys get away with cheating for years- only to be found out when they are scrutinized by the public eye. To just raise taxes even more only encourages people- the very people we want to pay their fair share- to cheat even more.
The entire country should be outraged that the very man who has been calling for raising taxes on the wealthy and who is chairman of the most powerful committee in Congress, Ways and Means, turns out to be one of the biggest cheats of them all.
God I wish the Republicans had their act together.
This makes sense to me...
Submitted by Pauline May (not verified) on Sat Aug. 29, 2009 7:40 AM PDT.
"To just raise taxes even more only encourages people- the very people we want to pay their fair share- to cheat even more."
I have a CPA friend who uses this argument too, and no doubt he knows about tax cheats and the various modes of avoiding tax payment.
However, if one were to use this rationale to, say, justify the loosening of penalties for obvious criminal activity, where would we be as a nation?
Like saying, "Let's lower the tax rate to encourage tax cheats to behave." Yeah, right...
Pauline
If tax cheats is your
Submitted by John Casey (not verified) on Sat Aug. 29, 2009 1:39 PM PDT.
If tax cheats is your concern, there is, for once, an easy solution. It takes two steps:
1. Substantially increase the IRS enforcement budget, and use it to train and deploy a substantial number of additional officers.
2. Re-direct the IRS's enforcement efforts towards corporations and high-income individuals, and away from low income cheats (keep some effort on keeping the EITC clean). This is the Willie Sutton rule: go where the money is.
Would it shock to learn that under W, the IRS did the opposite of these recommendations?
Didn't think so.
So you have a leaking pipe
Submitted by Got Change on Sun Aug. 30, 2009 7:41 AM PDT.
So you have a leaking pipe in your basement and every time you turn the kitchen faucet on water spills on the floor. So your solution is to put some more buckets underneath the pipe. Some of the other chuckleheads who comment here want to just turn the facet up to get more into the sink apparently not caring that the basement floor will floor sooner.
Come on guys, the tax system in this country is broken. It's six million words of corruption. Higher tax rate just result in less compliance. I mean here are five outstanding Democrats- the very ones who are responsible for high taxes- and they are the biggest cheats. If they aren't complying imagine what the little guy is doing? Where’s the outrage?
We need a simplified tax code. I like the plan Steve Forbes proposes: the first $65,000.00 of income for everyone is tax free, the rest is taxed at 22%. No deductions except for charities. This would unleash an economic tsunami of unbelievable proportions as the underground economy moves above ground.
Gotta love that Republican logic
Submitted by Trippp on Sat Aug. 29, 2009 6:08 PM PDT.
So rich people will only obey the laws if they are not too inconvenient? That starts to sound like a monarchy pre-Magna Carta. Those with resources are allowed to obey fewer laws, and the more resources they have the fewer laws they must obey. Are we lucky that rich people bother to obey any laws at all?
I see - the point is to get rich so you can be above the law. Unfortunately all those spots are already taken so too bad, so sad for the rest of us. Shoulda been born rich.
Tripp
Shoulda become rich on your
Submitted by Got Change on Sun Aug. 30, 2009 7:42 AM PDT.
Shoulda become rich on your own, it's more satisfying.
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