New York Times columnist David Brooks ridicules the Affordable Care Act provision tightening businesses’ reporting requirements to the IRS on payments for goods and services: “If you’re a freelancer and you buy a laptop from an Apple store, you have to file a 1099.” Brooks sees that as an “expensive interference in business life.”
BEYOND THE NUMBERS
A new report from the non-partisan Congressional Research Service (CRS) explains that permanently extending all of President Bush’s tax cuts would be extraordinarily expensive — CRS estimates the cost at $5 trillion over the next decade alone. The report recognizes that Congress, in deciding the future of the tax cuts, will need to consider the current weak economy as well as our unsustainable long-term budget path. But, it concludes, letting the Bush tax cuts aimed at the nation’s wealthiest 2 percent of households expire on schedule at the end of December makes sense from both perspectives. Here are the key quotes:
FactCheck.org has a useful analysis debunking the misleading and downright false statements about taxes in a chain email that’s been circulating the country. The email’s most egregious claim — that taxpayers will owe taxes on the value of their job-based health coverage starting next year — is simply untrue, FactCheck explains.
The most curious aspect of the feverish debate over tax cuts is that President Obama cut taxes for more than 90 percent of working Americans, yet more than 90 percent of Americans have no idea this happened.
Describing the social and economic costs of growing income inequality, economist Robert Frank explained in yesterday’ New York Times that while the first three decades after World War II were a time of broadly shared prosperity, income gains over the next three decades went almost entirely to the very wealthy. You can see the striking contrast in the graph below.
Bill Galston of the Brookings Institution and Maya MacGuineas of the New America Foundation offered a plan last week to reduce federal deficits and push down debt held by the public to 60 percent of gross domestic product by 2020. The plan explicitly recognizes that it would be unrealistic to hold federal revenues and outlays to the averages of recent decades, a topic on which we’ve recently written. We commend Galston and MacGuineas for proposing reasonably specific tax increases and spending cuts rather than relying largely on mechanical formulas that avoid making the hard choices.
We’ve updated our chart and table on how the change in income distribution between 1979 and 2007 affected different income groups to reflect a slightly different methodology. Below are the revised figures.
UPDATE, SEPTEMBER 30: We’ve revised some of the figures in this post. Click here for the updated numbers.
In yesterday’s New York Times, Richard Thaler, one of the nation’s top economists, neatly refuted the arguments for borrowing tens of billions of dollars each year to keep President Bush’s tax cuts flowing to the most affluent 2 percent of people in the country. He then posed a central question: “whether we want a society in which the rich take an ever-increasing share of the pie, or prefer to return to conditions that allow all classes to anticipate an increasing standard of living.”
A major component of the “Pledge to America” legislative blueprint, which House Republicans issued this morning, is an earlier proposal from House Minority Leader John Boehner to cut domestic funding substantially.