This week on Off the Charts, we focused on the federal budget, federal taxes, the economy, and state budgets.
- On the federal budget, Paul Van de Water explained that Mitt Romney’s budget proposals would cut Medicare and Medicaid by one-quarter or more, and cut non-defense discretionary programs to a percent of the economy not seen for at least 80 years.
We also highlighted and updated our analyses of several harmful proposed changes to the congressional budget process, and we pointed to a statement from Robert Reischauer, former director of the Congressional Budget Office and one of our board members, opposing one of the bills.
- On federal taxes, Chuck Marr explained why people at the top of the income scale should pay more in taxes, and Chye-Ching Huang discussed why the preferential tax treatment for capital gains makes no sense.
Chuck Marr also urged Congress to consider the interests of U.S. workers in deciding whether to eliminate taxes on corporate foreign profits.
And we highlighted some facts on the Earned Income Tax Credit (EITC) in honor of the sixth annual EITC Awareness Day.
- On the economy, Chad Stone outlined why the Federal Reserve’s decision to keep interest rates low is good news given current economic and political conditions.
He also noted that, while economic growth picked up in the fourth quarter of 2011, serious concerns about the recovery remain.Nick Johnson pointed out that steep cuts in state and local spending are slowing the economy.
- On state budgets, Nick Johnson explained why Kansas Governor Sam Brownback’s proposal to abolish the income tax on “pass-through” business income would be costly and poorly targeted.
In other news, we released reports on Mitt Romney’s budget proposals, the proposed Kansas tax break for “pass-through” business profits, and three proposed changes in congressional budget procedures: (1) requiring official budget “baselines” to assume that future appropriations will remain frozen indefinitely, (2) changing the accounting of federal credit programs in ways that would overstate their costs, and (3) barring Congress from considering any legislation that would affect the budget until it and the President have agreed on a joint budget resolution for the fiscal year.