Battle Lines on Tax Policy

The President rolled out his latest deficit reduction outline yesterday. As expected, it included several tax recommendations. In sum, the President is calling for an additional $1.5 trillion in tax collections over the next decade, including:

  • Expire Bush Tax Cuts on High Income Earners ($800 billion)
  • Cap Itemized Deductions & Exemptions at 28 percent ($400 billion)
  • Various Loophole Closers ($300 billion)

There are a number of challenges with the list. First, allowing tax provisions already set to expire to, well, expire, doesn’t raise any revenue. It’s already in current law. That $800 billion in savings doesn’t exist.

Second, the President already proposed to use the

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