Wednesday, July 20, 2011

Has President Obama Agreed to a $1.5 Trillion Tax Cut or a $1 Trillion Tax Increase

Only in America Can It Be Both

The news today was that there was large bi-partisan support for plan formulated by the so-called Gang of Six in the Senate that would make large cuts in spending and also raise revenues by changing the tax code.  At least that is what was reported.

The plan to slow the deficit by $3.7 trillion over 10 years would come from roughly 74% spending cuts and 26% new taxes

And yet this is also a quote from Sen. Conrad

The gang's plan would bring in $1 trillion in new tax revenue over 10 years by narrowing several tax breaks. But Mr. Conrad said it would also lower tax rates and end the alternative minimum tax. He said the combination of tax changes would be viewed by budget experts as a $1.5 trillion tax cut.

Well that sure clears things up. 

But The Dismal Political Economist does have one question.  Who exactly are these “budget experts” that can turn a $1 trillion revenue increase into a $1.5 trillion tax cut?  And why haven't they been around before, because they could have saved everyone a whole lot of trouble.

Stephen Crowley/The New York Times
President Barack Obama remarked on a new proposal for raising the nation's debt ceiling.


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