Thursday, May 3, 2012
Hamilton Project Hosts Policy Forum Today on Economic Facts About Taxes: Rates, Revenues and Reform Options
The Hamilton Project hosts a policy forum today on Economic Facts About Taxes: Rates, Revenues and Reform Options:
Fiscal issues will rapidly come to the fore next fall as the federal government faces the looming expiration of the Bush-era tax cuts, the onset of the deficit “trigger,” and another debate on the debt limit. Across the political spectrum, one of the few points on which today’s policymakers can agree is that the tax code is in desperate need of reform.
On May 3, The Hamilton Project at Brookings will host a policy forum on the economic context for tax reform and the economic criteria that should be used when evaluating tax reform options. As part of the event, the Project will release a new policy memo, “A Dozen Facts About Tax Reform,” to help shed light on various aspects of the reform debate.
Following opening remarks, former Council of Economic Advisers Chair Martin Feldstein and Lawrence H. Summers, former Assistant to the President for Economic Policy and former U.S. Treasury Secretary, will discuss the broad economic case for tax reform.
A second panel of experts will debate key principles for a successful tax reform effort, drawing from a range of experiences. Participants include Center for American Progress Chair and Counselor John Podesta; NBER President and CEO James Poterba; Brookings Senior Fellow Alice Rivlin; and David M. Rubenstein, the Co-Founder and Managing Director of the Carlyle Group. Hamilton Project Director and Brookings Senior Fellow Michael Greenstone will moderate the panel. After each panel, the speakers will take audience questions.
- America collects lower revenues than other industrialized countries.
- Tax expenditures represent a large share of total government spending.
- The tax code subsidizes some activities and penalizes others.
- The tax system has become less progressive over time.
- Virtually all American families, even low‑income families, pay taxes.
- There is a limit to what tax reform can accomplish.
- Individuals and the economy will feel every approach to tax reform.
- The benefits from tax expenditures are not equally shared.
- Cutting individual income tax rates would modestly increase the earnings of the typical American family while substantially increasing the federal budget deficit.
- Deficit-financed tax cuts do not spur economic growth in the long run.
- Corporate tax reform can improve U.S. competitiveness in several different ways—but not necessarily all at once.
- Addressing the deficit will require policy solutions equal to the size of the problem.