CBO: Allowing Bush-era tax cuts to expire on the wealthy would lead to a $950 billion deficit reduction

August 25, 2012
By

Forget the ailing economy in its present form — next year America could be heading toward a (worse) recession if our do-nothing Congress holds us hostage…again. We’ve shown proof, diagrams, graphs, heard from top economists — and even one or two — possibly more Republicans now favor bringing in tax revenue – but stalwart Republicans remain at Grover Norquist, the anti-tax crusader’s side (aka: the Tea Party).

FYI: That’s not money ‘trickling down’; that’s urine.

 

 

 

 

 

 

 

 

 

 

International Business Times reports:

 

The U.S. could be hurtling toward a recession next year if Congress fails to prevent a series of government programs and tax cuts from expiring in January, according to a new report from the Congressional Budget Office, or CBO, which set an ominous forecast for 2013.

Without action by Congress to avoid the so-called fiscal cliff — the combination of massive government spending cuts and tax increases that are scheduled to be automatically enacted at the start of 2013 — could lead to the loss of as many as two million jobs, sending the nation’s unemployment back to 9 percent in the second half of the year.

Allowing the Bush-era tax cuts and payroll tax cuts to expire, while also permitting the automatic budget cuts under last summer’s debt ceiling deal to go through — it would cut funding for discretionary programs, including defense spending, and student loan aid — will push the U.S. into another recession, with real GDP expected to decline by 0.5 percent, the nonpartisan agency reports. While that figure hardly compares to the 3.1 percent decline the nation saw in 2009, it’s still a despondent forecast after seeing the GDP slowly inch up in 2010 and 2011.

(My bold)

Note the following:

Instead of allowing the U.S. to reach the fiscal cliff, there could be another way to make up for some of the savings that would be enacted under those spending cuts and tax increases: allowing the Bush-era 2001 and 2003 income tax cuts to expire on incomes above $250,000.

Allowing those tax cuts to expire on schedule, while extending them for middle- and low-income Americans, would save $823 billion in revenue and $127 billion on interest in the nation’s debt, according to Chuck Marr, the director of federal tax policy at the Center on Budget and Policy Priorities. Overall, that would lead to a $950 billion deficit reduction over a decade.

Of course there’s another way — a way around that  fiscal cliff — the proximity of which is far too close — but for fuck’s sake, someone give Norquist a Valium (or two), and ask him to tear up those gosh damned pledges. Austerity measures have not worked in Europe and said measures will not work here. In short, stop blaming the poor, when the blame should rightfully be spread out.

Stephen King wrote an article titled: Tax Me for F@%&’s Sake!

Tough shit for you guys, because I’m not tired of talking about it. I’ve known rich people, and why not, since I’m one of them? The majority would rather douse their dicks with lighter fluid, strike a match, and dance around singing “Disco Inferno” than pay one more cent in taxes to Uncle Sugar.

You can read the rest of Mr. King’s article here. 

See graphs and additional info from International Business Times here. 

Sorry for the F-bombs. /end of rant

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  • spegetteo

    I think you got the headline backwards. It would add to the deficit, not reduce it.

  • leeroyjenkins

    95 billion dollars? What ELSE could we do with that 95 billion?
    Well, there are 312 million people who live in the USA… and lets be generous and say that 20% of those people are unemployed and living on the streets. In real need of food and money. That works out to approximately 1301dollars for each person per year (108.41 per month). In other words, it could single handedly end hunger in the United States for 100% of the population. For over 10 years.

  • Vatcha

    While this article points out that the CBO’s baseline scenario predicts a negative 0.5% impact on GDP for 2013. What it fails to mention is the the projected positive 4.3% average annual impact on GDP for 2014-2017, and positive 2.4% average annual impact for 2018 – 2022. It also fails to mention the severe reduction in long term deficit relative to GDP that this scenario predicts.

    Meanwhile reinstating the income tax rates for the top brackets alone would not avoid the “fiscal cliff”. It would have a relatively small effect and perhaps stretch out the long term deficit crisis by a year or two.

  • http://twitter.com/95377_guy right side of No Cal

    So, first of all, your headline is misleading. The CBO never said what. Someone’s analysis of a CBO report says that. And who was that? Your article never states that. But if we click through, we learn that “The Committee for a Responsible Federal Budget” put this together. Perpetuating a dishonest debate by labeling a liberal advocay groups numbers as CBO numbers is worthless

    • Vatcha

      The $950B referred to come from table 1-5 of the CBO report. The $950B is the total for 10 years, so thats an average reduction of $95B/yr. So while every little bit helps if nothing else changes this is just a drop in the bucket relative to the deficit problem.

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