Skip to main content

This page shows a chronological list of all CBPP materials.

Use advanced search and filtering

Pre-2005 Content Archive

Report

The Skewed Benefits of the Tax Cuts: With the Tax Cuts Extended, Top 1 Percent of Households Would Receive Almost $1.2 Trillion in Tax Benefits Over the Next Decade

  • The top 1 percent of households (currently those with incomes over $450,000) will receive almost $1.2 trillion in tax cuts over the next ten years, if the 2001 and 2003 tax cuts are extended and relief from the Alternative Minimum Tax is continued.
  • By 2010, the tax cuts will average more than $60,000 a year for households in the top 1 percent — and more than $150,000 a year for households with incomes above $1 million.
  • The cost of the tax cuts (when fully in effect) for people with incomes over $1 million will exceed the total amount the federal government devotes to K-12 and vocational education, and it will exceed what the federal government spends on hospital and other medical care for veterans.
  • The annual cost of the tax cuts for those with incomes over $1 million also will exceed the total savings in each of the next five years from the cuts the President’s budget proposes in an array of domestic non-entitlement programs, including education, health research, environmental programs, and others.
Report

Extending the President's Tax Cuts and AMT Relief Would Cost $4.4 Trillion Through 2018

Key Findings

  • Making the 2001 and 2003 tax cuts permanent, as proposed by the President, and extending Alternative Minimum Tax relief would add an additional $4.4 trillion to deficits over the next ten years.
  • Making the tax cuts permanent would also dramatically worsen the nation’s long-term fiscal problems. Even if the tax cuts expire or their costs are offset, the debt in 2050 would stand at 105 percent of the economy, already an alarming figure. But extending the tax cuts without paying for them would essentially double the size of the debt in 2050; debt would then stand at more than 200 percent of the economy.
  • Measured in today’s terms, the annual cost of the tax cuts when fully in effect exceeds the combined annual budgets of the Departments of Education, Homeland Security, Housing and Urban Development, Veterans’ Affairs, State, Energy, and EPA.
  • The cost of the tax cuts going to the top 1 percent of households alone is larger than the entire budget of the Department of Education. The cost is so high because by 2010 — the first year in which all provisions of the 2001 and 2003 tax cuts are fully in effect — households in the top 1 percent of the income scale will receive average tax cuts of more than $60,000 apiece.
Report

Capital Gains Tax Cuts Slashed Taxes of Top 400, While Their Incomes SoaredCapital Gains Tax Cuts Slashed Taxes of Top 400, While Their Incomes Soared

  • Tax rates for the 400 taxpayers with the very highest incomes have fallen significantly in recent years, new IRS data show. These individuals paid only 18 percent of their income in federal individual income taxes in 2005, down from 30 percent in 1995.
  • The decline is due in large part to the capital gains tax cuts enacted in 1997 and 2003. The top marginal tax rate on capital gains is now 15 percent, less than half the top tax rate on wages and salaries. The top 400 taxpayers derived more than half their income from capital gains in 2005.
  • Over the same period, the top 400 filers have enjoyed huge gains in pre-tax incomes. The average pre-tax income of this group rose by 235 percent, or $150 million, between 1992 and 2005, after adjusting for inflation.
Report

The Tax Commission's TABOR: A Path to Deterioration in Florida

Key Findings

  • The proposed state and local revenue cap contains the key elements of Colorado’s TABOR, which led to reductions in health, education, public safety, and transportation services. Voters suspended TABOR for five years in November 2005.
  • If the proposed limit had been effective in Florida beginning in FY 2002, capped state revenues for the FY 2003 – 2007 period would have been $5.7 billion less than the actual revenue level.
  • Florida is already at the bottom among states on many measures of public services; falling further could make it unattractive as a place to live or do business.
Report

Kyl Estate Tax Amendment Would Cost Nearly As Much As Estate Tax Repeal

Key Findings

  • Senator Jon Kyl’s proposal for an estate tax with a $10 million per-couple exemption and a 35 percent top rate would cost at least 77 percent as much as estate tax repeal, or about $750 billion over ten years (2012-2021).
  • The Kyl proposal would cost about $250 billion more (between 2012 and 2021) than simply making 2009 estate tax law — a $7 million per-couple exemption and a 45 percent rate — permanent.
  • Under 2009 law, the estates of 997 of every 1,000 people who die will owe no tax, due to the $7 million per-couple exemption. Thus, all of the additional cost of proposals going beyond 2009 law would go toward tax cuts for the 3 in 1,000 estates valued at more than $7 million per couple. The bulk of the additional cost would pay for tax cuts for the very biggest of these large estates.
  • Going beyond 2009 law to the Kyl proposal would benefit hardly any small businesses or farms, since virtually all such estates will already be exempt from tax under 2009 law.
  • On an annual basis, the additional cost of the Kyl proposal (relative to making 2009 estate tax law permanent) exceeds the budget of the Environmental Protection Agency and is about what the federal government currently spends on Pell Grants to help students afford college.
Report

Senate Bill Would Update And Streamline Housing Voucher Program

Key Findings

  • Senators Dodd and Schumer recently introduced the Section 8 Voucher Reform Act (SEVRA), which would make significant improvements in the housing voucher program. The House approved a similar bill last year by a vote of 333-83.
  • SEVRA would build on the housing voucher program’s success by establishing a stable, efficient policy for funding vouchers. In recent years, 150,000 vouchers have been lost due to funding instability.
  • SEVRA also includes reforms in areas such as tenant rent payments and housing quality inspections to make the voucher program more efficient and effective, while retaining key tenant protections.
  • The House SEVRA bill contains an expansion of the Moving-to-Work (MTW) demonstration that is far larger than needed to test alternative policies, has inadequate evaluation mechanisms, and poses some risks to tenants. If an MTW expansion is added to the Senate bill, it should be more limited in order to facilitate oversight and evaluation and minimize unintended harm from untested policies.
Report

Is It Raining Yet? Yes, and It’s Time for Many States To Use Their Rainy Day Funds

Key Findings

  • With the economic slowdown creating budget gaps in many states, now is the appropriate time for them to tap the “rainy day” reserve funds they have set aside for just such a contingency.
  • Most states have sufficient rainy day funds to reduce the amount of spending cuts or tax increases that would be needed to balance their budgets in the near term.
  • Unlike spending cuts and tax increases, which worsen a downturn by further reducing overall demand, tapping a state’s reserve fund helps maintain overall demand by injecting savings into the economy.
  • States concerned that the downturn could be deep and prolonged should respond not by hoarding their reserves but rather by devising a multi-year plan to address recession-induced budget problems.
Report

Using Income Taxes to Address State Budget Shortfalls

Key Findings:

  • States facing deficits due to the current economic downturn should avoid spending cuts that can further weaken their economies.
  • Raising taxes, especially on wealthy households, is less economically damaging than cutting many types of services.
  • To fill budget gaps, states should consider enacting temporary income tax surcharges.
  • Nationwide, over $13 billion could be raised if every state with a personal income tax enacted a 1 percent rate increase for high-income taxpayers. An across-the-board surcharge equal to 5 percent of taxes owed could raise a similar amount.
  • If enacted quickly, revenues from a surcharge could help states close gaps in their current year budgets.
Report

Bush Budget Would Cut Domestic Discretionary Programs by $20 Billion In 2009

Key Findings

The President’s 2009 budget provides $20.5 billion less for domestic discretionary programs outside homeland security than is needed simply to keep pace with inflation. In many areas, the cuts come on top of sizable cuts made in recent years. Examples of the proposed funding levels include (all figures adjusted for inflation):

  • K-12 Education — 9.1 percent below its 2004 level;
  • Head Start — 12 percent below its 2002 level;
  • Repairing and Modernizing Public Housing — 45 percent below its 2001 level;
  • Low-Income Energy Assistance — 22 percent below its 2008 level;
  • Environmental Protection — 26 percent below its 2001 level.


These cuts would directly affect millions of Americans. The President’s budget documents, for example, show that the number of children with child care assistance would fall by about 200,000 between 2007 and 2009 under his budget.

Many of the cuts would hurt state budgets as well, by reducing support for a range of public services states help provide.

Report

Summary of Final TANF Rules

OverviewThe final TANF rule implementing changes due to the Deficit Reduction Act of 2005 was published in the Federal Register on February 5, 2008 at 73 Fed. Reg. 6772. The new rule finalizes, with...
Report

The President's Budget and the Medicare “Trigger”

Key Findings

  • Under a requirement enacted in 2003, the President is supposed to propose this year, and Congress is supposed to consider, legislation that would keep general revenues from covering more than 45 percent of total Medicare costs through 2013.
  • While Medicare faces serious long-term financing challenges, this 45-percent limit is not a legitimate measure of Medicare’s financial health, since Medicare was designed to be financed in substantial part by general revenues (as well as by payroll taxes).
  • The 45-percent limit effectively forecloses certain options for strengthening Medicare financing, such as a broad Medicare reform plan that includes measures to close part of Medicare’s financing gap by curbing abusive corporate tax shelters or scaling back tax cuts for the wealthiest Americans. Under the 45 percent limit, Congress’s options would be limited to raising regressive payroll taxes and beneficiary premiums and cutting benefits and payments to health care providers.
  • A combination of measures — including added general revenues, as well as reforms in Medicare and the broader U.S. health care system — will likely be needed to address Medicare’s financing problems. The 45-percent trigger significantly complicates that effort by taking important reform options off the table.

 

Report

The Rangel AMT Proposal Versus Unpaid-For Repeal of the AMT: Which Is Better Tax Reform?

Key Findings

  • Rep. Charles Rangel’s proposal to replace the Alternative Minimum Tax with an income tax surcharge meets the criteria for tax reform. It would be simpler and more progressive — and likely more economically efficient — than the current AMT.
  • The surcharge would affect only a small minority (about 3 percent) of households, all of them high income. It would be indexed to inflation, so it would never grow to affect the middle class.
  • The proposal would reduce taxes for low-, middle-, and upper-middle-income households. It would scale back the 2001 and 2003 tax cuts for high-income households but still leave them with sizable net tax cuts. (Households with incomes over $1 million would still get an average tax cut of $21,000 in 2008, for example.)
  • The proposal is also revenue-neutral, so it would add nothing to the deficit. In contrast, the proposal to repeal or sharply reduce the AMT without paying for it could add as much as $2 trillion to deficits over the coming decade (2008-2017). For this reason, the Rangel proposal would likely be better for the economy.
Report

2008 Omnibus Appropriations Bill Cuts Funding for Head Start

Key Findings

  • In December, the President signed Head Start reauthorization legislation which had broad bipartisan support.
  • The legislation called for expanding the number of low-income children served in the program and for new investments to raise the quality of the program.
  • Two weeks after this legislation was enacted, the omnibus appropriations bill was completed. That legislation cut Head Start funding.
  • Head Start funding in 2008 is 11 percent below the 2002 funding level adjusted only for inflation.
  • Head Start is only one example of a broadly supported program that has been cut often in recent years because overall funding for domestic appropriated programs has been insufficient.
Report

Senate Proposal to Add Unemployment Insurance Benefits Improves Effectiveness of Stimulus Bill

Key Findings

  • The stimulus package passed by the Senate Finance Committee would provide additional weeks of unemployment benefits to jobless workers who are finding it difficult to find new jobs in this weakening economy.
  • A broad range of economists agrees that providing unemployed workers with extended UI benefits is one of the most effective of all available tax and spending options for stimulating the economy, since these workers, struggling to make ends meet after losing their paychecks, are likely to spend these benefits quickly
  • Extended UI benefits also meet the important stimulus criteria of being timely and temporary. They can be paid out almost immediately to workers who have run out of regular UI benefits — unlike tax rebates, which cannot begin to be paid until late May.
  • Long-term unemployment rates are significantly higher today than just prior to the recession in 2001. More than one in every six unemployed workers who is searching for a job has already been out of work for at least 26 weeks. This suggests that many workers are having a particularly difficult time finding new jobs and that extended unemployment benefits will provide important relief to them.
Report

House Bill Makes Significant Improvements In “Hope Vi” Public Housing Revitalization Program

Key Findings

  • HOPE VI aims to rebuild severely distressed public housing, improve economic conditions in the surrounding neighborhood, and help very poor families progress towards self-sufficiency, but the human side has been its weakest component. A House bill reauthorizing the program will improve housing outcomes for residents of public housing that undergoes HOPE VI redevelopment and provide new opportunities for hard-to-house families. The bill also contains measures to help overcome employment barriers faced by very disadvantaged families, although these could be strengthened further.
  • More than 100,000 of the public housing units slated to be demolished under the first 15 years of HOPE VI awards will not be replaced by other units affordable to poor families. The House bill would stem this loss of affordable housing, a critical change in light of the 20 percent increase in “worst case” housing needs since 2001, by requiring that all units demolished under future HOPE VI awards must be replaced, with narrow exceptions.
  • The House bill also promotes, as part of any new HOPE VI awards, key goals such as: housing choice and deconcentration of poverty through mixed income redevelopment, location of off-site replacement housing in low poverty areas, and greater assistance for displaced families in using housing vouchers.