Federal Budget and Economy Archive

Congress’s Debt Limit Problem Is Toddler Fiscal Policy
September 22, 2021
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TweetShareSharePin0 Shares Partisan congressional squabbling over the nation’s debt limit once again threatens to shut down the federal government and perhaps trigger a worldwide financial crisis. The debt limit as currently structured is toddler fiscal policy. Every parent of a young child knows what I am talking about: Little Peter gets all dressed up in

Neal’s Tax Bill Is Big And Bold, With Hits and Misses
September 14, 2021
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TweetShareSharePin0 Shares The most important thing to know about the tax bill proposed by House Ways & Means Committee Richard Neal (D-MA) is that it’s big. Really big. The congressional Joint Committee on taxation estimates the massive plan would raise taxes on corporations and high-income households by roughly $2.1 trillion over 10 years, use about

What’s Easier: Killing Aliens, Or Levying A Vehicle-Mileage Tax?
September 1, 2021
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TweetShareSharePin0 Shares My teenaged son and I just watched the science-fiction thriller “The Tomorrow War,” in which a future government drafts present-day civilians to travel forward in time and fight an alien invasion. It turns out (spoiler) that the extra-terrestrials had crashed into one of Earth’s glaciers centuries ago. Climate change melts the ice and

How Today’s Unsustainable Budget Is Stopping a Marshall Plan for Vaccines
August 30, 2021
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TweetShareSharePin0 Shares In 1948, Congress and President Truman adopted the Marshall Plan that at its peak provided about 2 percent of total US gross domestic product to aid Europe’s recovery from World War II—close to ten times the level of international assistance provided today. After leading the world in the production of vaccines, why hasn’t

How Can Tax and Spending Policy Together Enhance The Wealth Of The Nation?
August 16, 2021
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TweetShareSharePin0 Shares Buried in today’s partisan squabbles over President Biden’s ambitious domestic agenda is a fundamental question: How can government best increase the nation’s wealth? Does it do so by taxing the wealthy and spending more on income supports for much of the public, as many Democrats want? Or by limiting taxes on capital income

Searching for Supply-Side Effects of The Tax Cuts and Jobs Act
July 6, 2021
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TweetShareSharePin0 Shares The 2017 Tax Cut and Jobs Act (TCJA) was built on the idea that lower business and corporate tax rates, new domestic investment incentives, and guardrails against international profit shifting would increase investment, make workers more productive, and ultimately raise output and wages. Did it work? In a new paper with my Tax

Paying for Infrastructure With Pixie Dust
June 29, 2021
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TweetShareSharePin0 Shares President Biden and a bipartisan group of senators have agreed to the framework of a plan to boost infrastructure spending by about $579 billion. On top of already planned spending for roads, bridges, transit, water, and broadband, it would amount to a massive $1 trillion. And they have agreed to pay for it
The Deficit Is Likely To Be Bigger Than Biden Projects, But Not Because Of A Rosy Economic Forecast
June 2, 2021
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TweetShareSharePin0 Shares Those of us who have been writing about the federal budgets for too long remember the sad history of presidents trotting out wildly optimistic economic assumptions to explain away growing deficits and debt. It was a tried-and-true way to hide their unwillingness to pay for ambitious spending with too little tax revenue. Former
Five Tax Questions to Ask When Looking at President Biden’s Budget
May 27, 2021
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TweetShareSharePin0 Shares President Biden on Friday is set to unveil his first full budget along with Treasury’s Green Book, which will provide the first detailed look at key revenue proposals in the American Jobs Plan and American Families Plan. We already know that Biden aims to raise the top individual income tax rate from 37
Treasury Will Allow States to Take ARP Funds and Cut Taxes, With Some Guardrails
May 13, 2021
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TweetShareSharePin0 Shares On Monday, the U.S. Treasury Department released much-anticipated guidance for the American Recovery Plan’s (ARP) $350 billion in direct state and local aid, including details on how it will implement the law’s restriction on using ARP funds for state tax cuts. Treasury’s rules give states plenty of flexibility. But there are limits, and