In my various critiques of the working paper released by the president's Fiscal Commission, I've been careful to note that we really need a better analysis of the distributional effects of the tax-reform plan before pulling out our jump-to-conclusions mats.
Well, the widely respected Tax Policy Center has done the numbers, and -- surprise, surprise -- the poor are the hardest hit by the commission's tax plan:
Note that this estimate assumes the end of Bush tax policy and the alternate minimum tax, and keeps in place the EITC and the child tax credit. Under a different estimate, where Bush tax policy is extended and the AMT continues to be in effect -- the commission wants to eliminate both -- the tax reform is actually progressive, but that's not the likely context in which we'll see them enacted.
I think it's incumbent on the people who have endorsed this plan, like Andrew Sullivan and Ross Douthat, to explain why deficit reduction should also include an increase in after-tax income for the wealthiest among us while the poorest see cuts in their income as well as in government programs that benefit them.
-- Tim Fernholz
