>Nearly $1 Trillion Net Tax Hike Proposed in Fiscal Commission’s ‘Tax Reform’ Plan Friday, November 12, 2010
By Fred Lucas
(CNSNews.com) – Over the next 10 years, Americans could see a net federal tax hike of $961 billion if the draft recommendations of the National Commission on Fiscal Responsibility and Reform are enacted. This proposed tax hike would include those earning below $250,000, the people that President Barack Obama has repeatedly pledged would not see a tax hike.
The draft of the National Commission’s report from co-chairmen Erskine Bowles, a Democrat, and Alan Simpson, a Republican, talks about “lower rates” and “comprehensive tax reform.” But the lower rates in question do not offset the tax deductions and tax credits that are eliminated under the plan. Thus there would be a net tax increase.
The report projects $751 billion in revenue from changes to the tax code and another $210 billion from “other revenue.”
The hikes would encompass increased gasoline taxes, a change in the tax brackets and an automatic tax hike when the budget is not balanced. Along with significant spending cuts in the Defense Department, government personnel, eliminating congressional earmarks, and raising the age for collecting Social Security, the commission’s draft proposal is supposed to reduce the federal deficit by $4 trillion in 2020.
“Getting rid of most deductions and credits and replacing it with lower tax rates would mean virtually anyone paying taxes would be affected,” Ryan Ellis, a tax policy analyst for Americans for Tax Reform, told CNSNews.com. “It’s a good thing if they were being replaced with rates low enough to make up the difference, but they are not. The fact that their own report says that it raises net taxes by $1 trillion over 10 years means that they are not lowering rates enough.”
The draft calls for hiking the gas tax 15 cents by 2013 and dedicating the funding to transportation. The report also says, “Include automatic stabilizer with future benefit and/or revenue changes,” which would likely mean an automatic tax increase if the budget is unbalanced.
The report provides three options for restructuring the tax system, with common goals of lowering rates, simplifying the code, broadening the base, cutting tax expenditures, improving compliance, making America more competitive and reducing the deficit.
All of the proposals would eliminate the Alternative Minimum Tax, a tax law passed in 1969 designed to hit high-income earners that might avoid taxes through various shelters.
full story:
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