Budget

A New Kind of Gold Standard?

(Flickr/tao_zhyn)
In the latest issue of the magazine, I have a piece examining a strange and growing trend in some conservative circles—pushing states to adopt alternative currencies to the federal dollar. The basic concern is one you've probably heard from Ron Paul: The Federal Reserve can't be trusted, the national debt is out of control, so the U.S. dollar, backed only by faith in the government, may become worthless. (The story outlines some of the more obvious economic problems with this theory.) To deal with the concern, problem-solving state lawmakers have started introducing bills to create a second currency, one of gold and silver. Sounds like a fringe concept right? Well, not entirely. In the 2011-2012 legislative cycle, 17 states saw some form of the legislation introduced, either implmenting a second currency or at least prompting a study of one. The famous (and failed) "doomsday bill" in Wyoming included one such study. Utah already passed its version last year, so you can now start...

Does Congress Even Need to Pass a Budget?

The last time the U.S. passed a real budget was in 1997. Does this mean we don't need one?

As much as the Internet might try to fool you, the 2012 political season is about more than just Etch A Sketches and sweater vests. We’re up crap creek in a leaky canoe when it comes to the economy, and as the country heads into the general election, the debt and budget will be at the fore of public debate. With competing budget proposals flying in from all sides, much of the political talk these days centers on the endless delays and extensions that Congress has thrown in the path of approving a long-term federal budget. Which might lead one to wonder: Would it matter if we never passed a budget plan ever again? What exactly is the federal budget? The federal budget is one big ’ol nasty bill thousands of pages long that determines the fiscal future of the country over the course of a year by allocating money to various programs like Medicare and Medicaid as well as to things like defense spending. When was the last time we had a budget bill that was approved? April of 2009. But...

Romney Takes On the Rich!

Mitt Romney's old ski lodge, aglow with the warm light of taxpayer subsidy.
Like a good liberal, I feel a tiny pang of guilt when I do my taxes every year and see how much the government is subsidizing my choice to buy a home. Not that I'm going to turn it down as long as it's in place, but the mortgage interest deduction is not easy to justify. Even if there are reasons to believe that homeownership is a good thing, that doesn't necessarily mean that the government should pay you thousands of dollars to do it, particularly when you were probably going to do it anyway. Mitt Romney is down to a modest three homes these days (the house in Boston, the lake house in New Hampshire, and the beach house in La Jolla; he got rid of the ski lodge in Deer Valley and a second Massachusetts house), but that didn't stop him from suggesting that we might consider eliminating the mortgage interest deduction for second (and third and fourth) homes. The idea was quickly attacked from multiple sides (unsurprisingly, the National Association of Realtors, one of the most powerful...

Romney's Not-So Secret Plan

(Flickr/Gage Skidmore)
One of the more frustrating aspects of this year's Republican primary was the utter lack of specificity in candidates' proposals. It turns out this was a strategic decision. In an interview with the Weekly Standard last month, Romney said : “One of the things I found in a short campaign against Ted Kennedy was that when I said, for instance, that I wanted to eliminate the Department of Education, that was used to suggest I don’t care about education,” Romney recalled. “So I think it’s important for me to point out that I anticipate that there will be departments and agencies that will either be eliminated or combined with other agencies. So for instance, I anticipate that housing vouchers will be turned over to the states rather than be administered at the federal level, and so at this point I think of the programs to be eliminated or to be returned to the states, and we’ll see what consolidation opportunities exist as a result of those program eliminations. So will there be some that...

Top Ten Tax Facts

Think you know a lot about government revenue? Think again.

(Flickr/401K)
This piece is the fifth in a six-part series on taxation, and a joint project by The American Prospect and its publishing partner, Demos. 1. The government has collected less in taxes as a proportion of the economy in the past three years than it has in any three-year period since World War II, and tax rates are at historic lows . 2. One out of three multi-millionaires pays a lower percentage of their income in taxes than the vast majority of people making $60,000 a year. 3. Chairman Paul Ryan’s budget proposal, which has been praised by Governor Romney, would deliver benefits to people with incomes over $1 million that are 10 times greater than the benefits to those earning $40,000 or less. 4. Corporate income taxes for the past three years have hovered at just over 1 percent of GDP , lower than for any three-year period since World War II. The average for OECD countries is 3.5 percent. 5. The Bush tax cuts added $1.7 trillion to the nation’s debt between 2001 and 2008, which is more...

With Corporate Taxes, Less Is More

The federal government can lower rates for companies while increasing revenue.

(Flickr/rexboggs5)
This piece is the fifth in a six-part series on taxation, and a joint project by The American Prospect and its publishing partner, Demos. There is no shortage of alarmism when it comes to corporate taxes. Earlier this year, Mitt Romney said that the U.S. tax code “looks like it was devised by our worst enemy to tie us in knots.” A more recent memo drafted by the Senate Republican Caucus claimed that the “corporate income tax harms workers, consumers, job creation, investment, and innovation” (you have to wonder what else exactly is left). These statements are enough to scare anyone into thinking that the entire U.S. economy will crumble if corporate tax rates aren’t slashed tomorrow. But, as Republicans often claim, are U.S. corporate tax rates really among the highest in the world? And are workers really so dependent on protecting corporate profits? More important, is there any reason the U.S. shouldn’t raise more revenues from corporations during this time of great fiscal need?...

Read My Lips: Fairer Taxes

Six ways to restore balance to our broken system

(Flickr/TruthOut)
This piece is the fourth in a six-part series on taxation, and a joint project by The American Prospect and its publishing partner, Demos. The “Buffett Rule” proposed by President Obama and now being considered by the Senate would be an important symbolic step toward a fairer tax system. By instituting a minimum tax on very high earners, it would advance the principle of progressive taxation and reform the tax code in an overdue way. By itself, though, the Buffett Rule does not go nearly far enough. It should be a small piece of a much larger agenda for restoring fairness to America’s tax system. Some of this agenda is reflected in President Barack Obama’s 2013 budget proposal, but other important ideas are not yet being seriously considered. Here are six such ideas that should be part of the national debate. Create New Top Tax Brackets The Obama budget plan would let the Bush tax cuts lapse at the end of this year for households making over $250,000, and the highest tax bracket—for...

Paul Ryan Wants Democratic Friends

(Flickr/Gage Skidmore)
Paul Ryan's budget has become a rallying cry for Democrats, and President Obama's re-election in particular. Republicans have long expressed an antipathy for the general concept of government services, but these were often expressed in the abstract or lone exceptions, with the party generally focusing on the starve-the-beast philosophy of reducing taxes so that government outlays would eventually have to be reduced. Ryan's budget gets that down on paper in crystallized form, codifying those ideas into a specific vision for the future that would gut all government services except health spending, Social Security, and an increased budget for defense, discarding the rest of discretionary spending. Earlier this morning, Ryan told a group of reporters in New York that his budget wasn't actually all that extreme because an anonymous selection of a dozen Democrats have told him they love his bill. From Buzzfeed: "There are a number of democrats but I don’t want to name their names, because I...

Making State and Local Taxes Fair Game

Fixing highly regressive tax systems is one of the essential steps in making our country's tax code more fair.

(Flickr / kenteegardin)
This piece is the second in a six-part series on taxation, and a joint project by The American Prospect and its publishing partner, Demos. “Tax fairness” is defined very differently by Americans from various walks of life. Despite this divide, there is a substantial shared vision: A majority of Americans believe that the government should be doing more to help people, and the vast majority believe that wealthier Americans should be the ones paying higher taxes to support those priorities. If that is the case, why do we have a state and local tax system that is the polar opposite of those beliefs, one where the better-off pay about half as much in taxes as the less-well-off? This inequity both contradicts our country’s shared beliefs on tax fairness and is the major cause behind the critical lack of state and local investment in social capital that I wrote about in my last piece . We need to correct this inequality immediately if we are going to maintain needed levels of investment in...

When $1 Million Isn't Rich Enough

(Flickr/Fortune Live Media)
Democrats are doing everything they can to make the Buffett Rule as the predominant issue of the week before it is subjected to a Senate vote on Tax Day. The rule—named after Warren Buffett's frequent refrain that his secretary pays a higher effective tax rate than the multi-billionaire investor—would force multimillionaires to give up some of their tax breaks until they pay at least a minimum rate of 30 percent. Obama is headed to Florida tomorrow to promote the bill, while his campaign is highlighting the rule as a campaign issue in contrast to Mitt Romney's tax disclosures he released earlier this year, which revealed that the probable Republican candidate paid taxes of just 13.9 percent on his $21.7 million in income in 2010. I'm sure many of us at the Prospect will have more to say about the bill over the course of the next week, but one minor detail in the New York Times write up of the push is worth highlighting : The Senate legislation would establish a minimum 30 percent tax...

Washington, We Have a Revenue Problem

Why taxes have to go up—by a lot

(Flickr/401K)
This piece is the first in a six-part series on taxation and a joint project by The American Prospect and its publishing partner, Demos. The United States has a revenue problem. Taxes at all levels of government are too low to balance budgets and, more important, to ensure America’s future prosperity and cope with an aging population. While many political and policy leaders argue that future revenues should reflect “historic norms,” this is a flawed assumption on which to base long-term fiscal planning. Tax revenues have accounted for around 18 percent of GDP since World War II, and 18.3 percent over the past 30 years. The budget released by Paul Ryan and the House Budget Committee proposes average revenue levels at this same level—18.3 over the next decade. (Although an analysis by the Tax Policy Center found that the average would in fact be 15.4 percent.) The Simpson-Bowles plan, released in late 2010, proposed average revenues of 19.3 percent through 2020. Meanwhile, the Obama...

Who Benefits From Paul Ryan's Tax Cuts?

(Flickr/Gage Skidmore)
Via Ezra Klein, here are handful of charts from the Center on Budget and Policy Priorities that perfectly captures how Paul Ryan's budget would essentially wipe out all government services for those in need in order to fund a massive redistribution of wealth back up to those at the top of the income scale. Ryan's budget goes beyond the GOP regressive standard of turning all of the Bush tax cuts permanent and includes a number of other tax reductions that would benefit the wealthy. According to the Tax Policy Center that adds up to an extra $265,000 average windfall in fewer taxes that people earning over $1 million wouldn't have to pay each year. The total distribution of those tax cuts would tilt sharply toward the country's highest income bracket. It'd be one thing if this plan just represented the views of a lone congressman from Wisconsin, but the Ryan plan has become accepted dogma in the GOP. Only 10 House members broke ranks to vote against it last week, and the plan has a seal...

Paul Ryan's "Smoke and Mirrors"

(Flickr/Gage Skidmore)
Paul Ryan, the supposed champion of fiscal restraint among right-wing Republicans, has put his colleagues in an awkward bind. His budget includes a host of unpopular provisions, and if implemented, would eviscerate almost every part of the government except defense, health care, and Social Security by 2050 according to the Center on Budget and Policy Priorities. Yesterday, all but 10 House Republicans entered their name in the congressional record as supporters of the bill, providing Democrats with ample material for negative campaigning this fall. Ryan's proposal shows a reckless disregard for the country's less fortunate. Any social safety net for non-senior citizens would disappear, and while the plan would largely maintain Medicare for current retirees, the move to premium support would rob future generations of needed health care coverage, all to achieve lower taxes It might seem like Ryan has never run across a federal program he would like to destroy, but he debunked that...

It Takes an Election

Last year's Save Texas Schools rally produced thousands of people, but education funding was still slashed by $5.4 billion. (Flickr/matthewjuran)
Last year, Save Texas Schools held a rally that wowed most of us covering it. Around 10,000 people came from across the state , traveling hours on buses to demand lawmakers prioritize education funding, and forego the unprecedented cuts the legislature's initial budget had proposed. In a state with little history of organization and few structures for bringing people together, the rally was an impressive success. But here's the thing: Even with the public outcry, lawmakers went ahead and slashed education funding anyway. So perhaps it's not a surprise that this year's rally only had about 1,000 attendees at its height (though organizers say a total of 4,500 people came through at one point or another). Toward the end, the numbers seemed to be in the low hundreds. The speakers each had a different pet cause or complaint —testing, funding, equity—and the overall program ran about 30 minutes longer than it was supposed to. Over at The T exas Observer , I left the program thinking the...

Did Virginia Democrats' Budget Gamble Pay Off?

Smoother roads ahead? (Flickr/401K)
Today the Virginia Senate will likely pass a budget. After weeks of deadlock, that's quite a feat in itself. But for Senate Democrats—who had already voted down two previous budgets and prompted a special session—the latest document is a much bigger victory. For weeks, Senate Democrats had engaged in a risky game of political chicken , demanding both more committee leadership positions and more spending on both state infrastructure and government programs. While the GOP dominates the state House, the upper chamber is divided evenly. However, in split decisions, it falls to Republican Lieutenant Governor Bill Bolling to cast the deciding vote—and guess which side he favors. That means that despite a having 50 percent of the seats, the Senate Dems have little committee leadership positions and have been powerless to stop a series of measures, including most famously the state's pre-abortion sonogram measure. When it comes to the budget, though, Bolling can't vote, and Democrats decided...

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