Tag: budget plans

Congress to Skip the Budget Process—-a Transparency Problem at the Very Least

You are required by law to file your taxes by the end of the day tomorrow, and you get penalized if you don’t. Meanwhile, Congress will not meet its April 15 requirement to pass a budget resolution. The budget resolution is the plan for FY 2011 revenue and spending that dictates the amounts in forthcoming annual spending bills.

It’s an understatement to say that skipping the annual budgeting process is a transparency problem. It’s a management problem, a spending problem, a leadership problem, a responsibility problem …

More commentary and a timetable of the congressional budget process is on the WashingtonWatch.com blog. Politico broke the story (so far as I can tell). Reuters quotes Senate Budget Committee Chairman Kent Conrad (D-ND) saying, “We’re going to go full speed ahead” with the budget.

You have until the end of the day tomorrow, senator.

Obama Tax Policies and Beyond

I was a panelist for a Tax Notes forum on April 3 regarding Obama’s tax policies. The other panelists were Len Burman of the Urban Institute and Gene Steuerle of the Peterson Foundation. It was an expert and ideologically diverse panel, but nobody was fond of Obama’s fiscal policy direction. (In the photo, that’s former CBO director Rudy Penner to my left. Photo credit to Derek Squires)

Tax Notes summarized the discussion: “A diverse panel of economists and tax specialists largely agreed … that President Obama’s tax and budget plans at best would fail to forestall long-term fiscal ruin and could even hasten its arrival.” One point of agreement was that the tax code is too complex and it doesn’t need the complicated new tax credits that Obama has proposed.

Where we differed was on the need for added federal revenue, and herein lies the big tax policy battle ahead. Len thought that some form of new value-added tax (VAT) was inevitable in order that the government could  raise more money. I am increasingly hearing that argument from top fiscal scholars, and I fear that the drumbeat for a VAT will get louder.

Dan Mitchell and I are dead-set against a VAT because it will be a tool to fund even larger government, as we discuss in Global Tax Revolution. But supporters of limited government need to start watching this issue and making preparations to ward off a Euro-style money machine.