CBO to ‘everyone’: Bend Over!

The Congressional Budget Office came out with a thick report titled: (love the graphics)

This 240 page beast has something for everyone to hate. More than 100 recommendations on ways that expenses could be cut, or revenues increased. You’d have to go through this line-by-line to find which idea will hurt you worse. My guess is that the average American family will get hit by at least a half dozen of the options.

There are a number of suggestions that may prove “popular”. For example a transaction tax on large financial institutions generates $71b over 10 years.

Impose a Fee on Large Financial Institutions = 71b

Increase Alcohol taxes.

Increase All Taxes on Alcoholic Beverages to $16 per Proof Gallon = 60b

Or any of these:

Raise Tax Rates on Capital Gains = 48b

Set the Corporate Income Tax Rate at 35 Percent for All Corporations = 24b

Tax Carried Interest as Ordinary Income = 21b

Reduce Funding for the Arts and Humanities = 5b

Cut the Number of Aircraft Carriers to 10 and the Number of Navy Air Wings to 9 = 1.8b

These things look interesting. But as you go through the report you get to see just how big these numbers are. While it may sound good to raises taxes on booze it really does not make much of a dent in the big picture. We need big numbers. Some of the suggestions that actually help fill the bucket:

Impose a 5 Percent Value-Added Tax (over 10 years) = +2.5 Trillion

Impose a Price on Emissions of Greenhouse Gases = 1.8 Trillion

Limit the Tax Benefit of Itemized Deductions to 15 Percent = 1.2 Trillion

Limit or Eliminate the Deduction for State and Local Taxes = 862b

Increase Individual Income Tax Rates (1% increase on income and AMT) = 702b

Accelerate and Modify the Excise Tax on High-Cost Health Care Coverage = 650b

Increase the Maximum Taxable Earnings for the Social Security Payroll Tax = 457b

Tax Social Security the Same Way That Distributions from Defined-Benefit Pensions Are Taxed = 438b

Accelerate and Modify the Excise Tax on High-Cost Health Care Coverage = 310b

Increase Excise Taxes on Motor Fuels by 25 Cents = 291b

What’s not to hate about these ideas? The one that stands out in my opinion? We’re getting a VAT.

About Bruce Krasting 208 Articles

Bruce worked on Wall Street for twenty five years, he has been writing for the professional press for the last five years and has been on the Fox Business channel several times as a guest describing his written work.

From 1990-1995 he ran a private hedge fund in Greenwich Ct. called Falconer Limited. Investments were driven by macro developments. He closed the fund and retired in 1995. Bruce also been employed by Drexel Burnham Lambert, Citicorp, Credit Suisse and Irving Trust Corp.

Bruce holds a bachelor's degree in economics from Ithaca College and currently lives in Westchester, NY.

Visit: Bruce Krasting's Blog

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