With the conventions now over, voters have more information to determine which political party has the best solutions for overall deficit reduction. Or was the reccomendations of the Simpson-Bowles Debt Reduction Commission the best way forward?
Figures come from the The Tax Foundation is a nonpartisan tax research group based in Washington, D.C..
Obama Romney Simpson-Bowles
| Top Marginal Rate on Personal Income |
39.60% |
28% |
23%-28% |
| Top Marginal Rate on Long Term Capital Gains |
30%* |
15% |
23%-28% |
| Top Marginal Rate on Dividends |
43.4%** |
15% |
23%-28% |
| Top Marginal Rate on Corporate Income |
28% |
25% |
26%-28% |
| Top Marginal Rate on Corporate Income from Foreign Sources |
28% |
0% |
0% |
| Tax Expenditures (Some 250 credits, deductions, and other preferences amounting to more than $1 trillion a year) |
Adds more than are taken away and complicates many existing ones, though limits benefits for high-income earners |
Potentially eliminates all, except middle-class preferences for mortgage, health, retirement, and charity |
Eliminates all under the 23% top rate plan; Eliminates all but Child Credit, EITC, mortgage, health, and retirement benefits under the 28% top rate plan |
| Alternative Minimum Tax, PEP and Pease (Limitations on high-income tax benefits) |
Maintains PEP and Pease; replaces AMT with a “Buffett Rule” minimum tax of 30% |
Eliminates |
Eliminates |
| Payroll Tax |
Increases the top rate from 2.9% to 3.8% |
Maintains |
Increases the wage base 2% each year until 2050 |
| Other Taxes Contained in Patient Protection and Affordable Care Act (“Obamacare”) | Maintains |
Eliminates |
Maintains |
| Estate Tax |
Maintains |
Eliminates |
Maintains |
| Gas Tax |
18¢ per gallon |
18¢ per gallon |
23¢ per gallon |
| Tax Revenue as a Share of GDP in 2015 |
19.40% |
18.00% |
19.30% |
| Spending as a Share of GDP in 2015 |
22.40% |
20.00% |
21.40% |
| Deficit as a Share of GDP in 2015 |
3.10% |
2.00% |
2.10% |
| Publicly Held Debt as a Share of GDP in 2015 |
79.40% |
Not Scored |
69.00% |
| Balanced Budget |
Never |
2020 |
2037 |
| * Based on the “Buffett Rule” minimum tax of 30%.
** Includes the 3.8% investment tax under the Affordable Care Act. Sources: Candidate statements, CBO |
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[polldaddy poll=6522453]
Here is the results of last week’s poll on gay marriage in Maryland with 262 votes cast.
Michael Hildebrand says
Neither party has any intentions of fixing the debt problem, they just tell you that they do to get re-elected. The only difference between the two is which programs they want to charge on the US credit card. In order to change the way things are being done in Washington, you are going to have to change the players that are there. Re-electing or electing any candidate from either party is just continuing more of the same. It is time for new parties and new ways of thinking to emerge and lead this country. But this will never happen because the American people have been brain washed into thinking the only parties that are capable of run this country are the only two in power now. So I as you this, how has that worked for us for the past 200 years? Until Americans grow a pair and elect real change, there will be no change. Start learning what comes after a trillion, because that’s where they are leading us!
Bill Parks says
Although the national debt is the direct result of Congress failing in its constitutional duties, neither party is equipped to deal with the debt. Very few people, in or out of government, appear to understand the nature and operation of privatized fractional reserve currencies. Our currency is issued by the Federal Reserve System, a privately owned cartel consisting of the Federal Reserve Central Bank in Washington, D.C., the twelve regional reserve banks, all commercial banks with national charters and some commercial banks with state charters opting to purchase stock in the regional reserve banks.
Keep in mind, aside from coins minted by the federal government, all of the currency in circulation is created as the principal of loans made by the Federal Reserve monetary and banking system. When governments, corporations, institutions, and individuals borrow money from the banking system, new money is created by the system. Almost every dollar in the economy is borrowed from the banking system by somebody. When borrowers repay these loans, that currency is destroyed. If all loans were to be repaid, there would be no currency in the economy at all. But some of the debt would remain because money to pay the interest on loans must also be borrowed.
The total amount of debt in the economy must constantly increase to keep currency circulating in the economy. Debt must double periodically, about every twenty years, just to pay the interest. For example, the total debt in the economy now stands at about $57 trillion, with annual interest of $3.66 trillion. The interest will consume the entire $57 trillion in fewer than 16 years (57 /3.66 = 15.57 years). To keep the currency from collapsing, the U.S. must increase its total debt to $114 trillion in the next twenty years.
On the other hand, Congress can exercise its enumerated constitutional authority to issue the nation’s currency directly without creating debt, cutting programs or rasing taxes.
Steve Payne says
I voted for the Simpson Bowles plan or similar.
The study mentioned above and used for the chart was put out by a DC think tank with a board that includes or included people from Pharma, Oil, Koch Brothers, A Rep congressman that now runs another conservative think tank etc…
The Tax Policy Center says that the Romney plan would increase the defecit by $450,000 by 2022 but adds that it’s imposible to really score it. Same with CBO, can’t score it.
https://en.wikipedia.org/wiki/Tax_Foundation#Board_of_directors
https://articles.marketwatch.com/2012-06-18/commentary/32283535_1_tax-plan-bush-tax-cuts-tax-rates
Steve Payne says
I meant 450 Billion increase of the deficit by 2022, sorry.
MB Troup says
I like SB for the top four tax rates and their handling of entitlements. We have a 1972 tax policy. Income is income, and our tax policy should reflect how income is derived in the year 2012. Put me in the Romney column for all else. Some of that stuff at the bottom is pretty much a pipe dream – like Steve’s $450k 🙂 Obama gets an 0fer on this one.
Steve Payne says
Michael, We should run on the American Elect ticket. You can be President since I can’t figure out how to put Smileys in my posts. (future smiley location)