“Tax Reform” Principles Before the House Are a Big Step Backward

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.

Click here to read the full paper.