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 …