The House is scheduled to vote tomorrow on a set of requirements for tax reform that could expand deficits and shift tax burdens from high-income to low- and moderate-income taxpayers, as our new paper explains.
Our paper details the severe problems with the House bill — namely, that it would:
fail to require any deficit reduction and, in fact, invite higher deficits;
cut individual income tax rates well below the already unaffordable Bush levels;
slash the top corporate tax rate and eliminate taxes on the foreign profits of U.S. multinational corporations;
not identify specific measures to broaden the tax base; and
not protect low- and moderate-income Americans. In other words, it would allow policy changes that would shift tax burdens down the income scale by giving large net tax cuts to high-income individuals and net tax increases to low- and moderate-income families.
Policymakers broadly agree on the need to address long-term budget deficits, and they increasingly recognize the need for a balanced approach that includes revenue increases. Unfortunately, the House bill represents a big step backward.