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Ezra Klein: Simpson-Bowles First Tax Reform Option Hits the Poor the Hardest

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flpoljunkie Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-16-10 06:23 PM
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Ezra Klein: Simpson-Bowles First Tax Reform Option Hits the Poor the Hardest
Simpson-Bowles first tax reform option hits the poor the hardest
By Ezra Klein

A few moments ago, I interviewed Rep. Jan Schakowsky, who is serving on the deficit commission. I'll post the transcript a little later, but one of her complaints was that the commission has been resistant to producing distributional analyses of the various proposals. If they did, she says, "we would know who benefits and who pays."

The Tax Policy Center just released the first distributional analysis on the commission's first tax option: zeroing out the tax code and restoring only the child-tax credit and the Earned Income Tax Credit -- both of which are thought to be the most progressive of the bunch. The results aren't good for the commission. Under this option, the poor pay more and the rich pay less:



This isn't the only option the commission offered, and it's not one they've yoked themselves to. But it was the first on their list, and it seems to fall most heavily on exactly the wrong groups of people. Progressives were already skeptical of the proposal's tax section, and this will make them more so.

By Ezra Klein
November 16, 2010; 5:26 PM ET

http://voices.washingtonpost.com/ezra-klein/2010/11/sim...
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hfojvt Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-16-10 07:08 PM
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1. considering the rate cuts
I am surprised that income at the top did not go up more. Much of the increase for the lower levels may come from the increase in the gas tax.
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flpoljunkie Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-16-10 07:48 PM
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3. These calculations were for the first tax option and do not include a gas tax.
'The Tax Policy Center just released the first distributional analysis on the commission's first tax option: zeroing out the tax code and restoring only the child-tax credit and the Earned Income Tax Credit -- both of which are thought to be the most progressive of the bunch.'
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hfojvt Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-17-10 12:58 AM
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4. that's only a summary
the tax policy center link says this

"Below are distributional tables for tax year 2015 for the variant of the Bowles-Simpson "Chairmen's Mark" that would eliminate all tax expenditures except for the child credit and the earned income tax credit, eliminate the alternative minimum tax and the phase-outs of itemized deductions and personal exemptions, and replace the current six bracket individual tax rate schedule with a three bracket schedule with rates of 9 percent, 15 percent, and 24 percent (from "Co-Chairs' Proposal: Draft Document", November 2010, page 24, line 4 on table). The proposal would also use the chained CPI to index tax parameters, increase the Social Security wage base by 2 percent per year more than the growth in the average wage (making the wage base $140,000 in 2015) and phase in an increase in the federal excise tax on gasoline of 15 cents per gallon (13.5 cents per gallon on average in 2015). Finally, it would reduce the corporate tax rate to 26 percent and eliminate corporate tax expenditures."

http://www.taxpolicycenter.org/taxtopics/bowles-simpson...

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LiberalFighter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Nov-16-10 07:30 PM
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2. I wonder if they got it from Paul Ryan the elitist.
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