Committee for a Responsible Federal Budget

Media Coverage

Nov 6, 2017|The Washington Post

The Finance 202: The ticking time bomb in the House GOP tax plan

A Senate roadblock looms. Also from Bloomberg: "The draft House tax plan is going nowhere in the Senate as written. The legislation to enact $1.41 trillion worth of tax cuts would run afoul of a Senate budget rule without substantive changes that would either raise more government revenue or scale back some of the benefits directed toward businesses and individuals, according to experts on Senate procedures. 'This bill would not become law as is,' said Marc Goldwein, policy director at the Committee for a Responsible Federal Budget."

Nov 5, 2017|The Washington Post

Six problems for the GOP tax plan

Deficit hawks won’t like it. The Committee for a Responsible Federal Budget finds, “According to the Joint Committee on Taxation (JCT), the TCJA would increase deficits by $1.487 trillion over ten years. Those deficits would lead to higher debt, resulting in $270 billion in additional interest costs. As a result, the legislation would add $1.75 trillion to the national debt by 2027.” That is not all, however. “Three major provisions in the bill arbitrarily expire after five years, making them look much cheaper than they actually are. There is no legitimate policy justification for these sunsets – the intent is clearly to force Congress to extend them in the future. Doing so would add over $350 billion to the cost of the bill.” (And if Congress rejects cuts in Medicare and Medicaid in the spending bill, the debt will go up even more.)

Nov 5, 2017|Financial Times

Republican grumblings hover over US tax reform

Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, a think-tank, said the House bill also risked falling foul of strict Senate budget rules.

In order to pass a bill with 50 votes rather than the usual 60 it must not add to the deficit beyond 10 years, even if it loses money in its first decade. But Mr Goldwein said it was “extremely obvious” the House bill would fail that test, meaning Democratic opposition could kill it.

“It would not be able to pass the Senate. They would have to amend it and they would have to make serious amendments,” he said.

Policymakers’ options included scaling back tax cuts, having proposed cuts expire after 10 years, or closing even more tax breaks, such as those for retirement savings and healthcare costs, he said. But those ideas are politically unpalatable. “I could see it getting so messy that it basically becomes unpassable and they have to some degree to start over,” he said.

Nov 5, 2017|The Washington Times

House Republicans sneak in ‘hidden tax increase’ each year by changing cost-of-living calculation

“Chained CPI is absolutely a more accurate measure of inflation,” said Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget. “All economists that aren’t being hackish agree that chained CPI is better.”

Nov 3, 2017|The Washington Post

Voters reject the GOP’s tax ideas

Moreover, because most Americans oppose tax cuts for corporations, a plan that disproportionately benefits corporations will be a hard sell. The Committee for a Responsible Federal Budget finds: “Of the $1.5 trillion cost, roughly $1 trillion comes from business tax cuts. Individual tax cuts make up another $300 billion, and the ultimate repeal of the estate tax accounts for the remaining $200 billion.” In short, when at least 80 percent of the breaks go to corporations or rich heirs, Republicans will be on defense. When the remaining $300 billion in individual tax breaks provides additional help for the rich (e.g. a rate reduction from 39.6 percent to 35 percent for those making between $480,000 and $1 million), it quickly becomes obvious that tax breaks for the middle class are an afterthought.

Nov 3, 2017|CBS News

GOP tax plan: 3 lessons for Trump in Reagan's cuts

By Representative Brady's admission, the House bill costs $1.5 trillion over 10 years, although other estimates place the tab far higher. As the Committee for a Responsible Federal Budget noted, the recently passed House budget blueprint called for a revenue-neutral tax bill and $200 billion in spending cuts -- an unlikely scenario. 

Nov 3, 2017|LifeZette

Taxes to Be Filed on a Postcard?

Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, quipped: "I think it's going to be a pretty big postcard."

But Goldwein said the bill would make the system simpler, primarily by doubling the standard deduction — to $12,000 for individuals and $24,000 for married couples. He said that would lead to fewer people itemizing, which is much more straightforward.

Apart from the headaches of filing taxes under a complicated system, Goldwein said lost time and money complying with the code hurts the economy. Tax software has mitigated but not eliminated that concern, he said.

"There certainly are costs to complexity," 

Nov 3, 2017|LifeZette

Trump Predicts Corporate Tax Cut Will Bring Back Jobs

Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, said he believes supporters of the plan are overselling its potential to spark long-term growth. He said structural problems, such as slow population growth and an aging population, will restrain growth.

Even if the benefits are smaller than the advocates predict, Goldwein said, tax reform is still beneficial because "We need every decimal point [of growth] we can get."

But Goldwein added that the steep corporate tax cuts in the bill are not balanced with enough spending cuts or elimination of loopholes to make it deficit-neutral. He said the gains from tax cuts could be lost to higher debt.

"It's kind of a jump ball," he said. "I don't know which will be a more powerful factor."

Nov 3, 2017|FactCheck.org

GOP, Democrats Spin Tax Plan

That’s nowhere close to President Ronald Reagan’s 1981 tax cut, which was 2.89 percent of GDP over a four-year average. That’s according to a 2013 Treasury Department analysis on the revenue effects of major tax legislation. Five more tax measures since 1940 had an impact larger than 1 percent of GDP, and the Committee for a Responsible Federal Budget includes a 1921 measure as also being larger than the GOP plan. That’s eighth place for Trump’s “biggest tax cut in our history.”

Nov 3, 2017|Bloomberg

House Tax-Cut Plan Hurtles Toward Senate Roadblock

The draft House tax plan is going nowhere in the Senate as written.

The legislation to enact $1.41 trillion worth of tax cuts would run afoul of a Senate budget rule without substantive changes that would either raise more government revenue or scale back some of the benefits directed toward businesses and individuals, according to experts on Senate procedures.

"This bill would not become law as is," said Marc Goldwein, policy director at the Committee for a Responsible Federal Budget.

Nov 2, 2017|Reuters

Trump's Tax Cut Won't Be the Biggest in U.S. History

The Committee for a Responsible Federal Budget, a bipartisan Washington think tank, estimated the Trump tax cut could be the fourth-largest as a percentage of gross domestic product, or GDP, a measure of national economic output.

Nov 2, 2017|Business Insider

A part of the new GOP tax plan will be a tough sell for Republicans in New Jersey, New York, and California

Most of the claimants that benefit from the deduction live in traditionally Democratic states like California and New York. The Committee for a Responsible Federal Budget found that New York and California receive about 30.5% of the total benefits from the SALT deduction.

Nov 2, 2017|Mother Jones

Republicans Unveil Huge Corporate Tax Cuts Paid For by Deficit-Spending

The budget resolution passed by the House last week allows Congress to increase deficit-spending by $1.5 trillion over the next 10 years. The TPC has estimated that Republicans initial cuts would cost $900 billion more than that. Republicans are using what nonpartisan groups like the Committee for a Responsible Federal Budget considers gimmicky and deceptive accounting to mask tax cuts that are likely to cost more than their $1.5 trillion limit.

Nov 2, 2017|Huffington Post

The Politics Of Tax Reform Are Driving Republicans, Not The Policy

Cutting the high statutory corporate tax rate would be good for competitiveness and growth, said Marc Goldwein, a policy expert with the conservative Committee for a Responsible Federal Budget. But adding an extra trillion dollars to the national debt, as Republicans have indicated they’re willing to do, would be unhelpful over the long term, he said. (The Committee for a Responsible Federal Budget does not endorse massive budget deficits.)

“There’s no scenario where the tax plan by itself is getting us a percentage point of growth a year,” Goldwein said.

Nov 2, 2017|The Hill

Republicans launch into sales push for tax plan

"While it is encouraging to see the House move forward on tax reform, it seems each new vote and milestone is a step backwards for the cause of fiscal responsibility,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan policy group.

Nov 2, 2017|The Guardian

Trump's 'largest tax cut ever' could fall apart over who foots the bill

But someone has to pay for these tax cuts, and fiscally conservative Republicans are likely to defect if they see the plan doing little but adding to the national debt. After the bill was released, the non-partisan Committee for a Responsible Federal Budget called it “a bill of treats paid for by too many tricks that could harm the economy” and add $12,000 in debt to every US household.

Nov 2, 2017|LifeZette

House GOP Promises $1,182 Tax Cut for Average Family

"Not only would today's legislation cost more than $1.5 trillion over a decade, but it includes a number of gimmicks, including allowing certain provisions to expire, that could ultimately result in more than $1.5 trillion of new deficits," Committee for a Responsible Federal Budget President Maya MacGuineas said in a statement. "The bill also continues to rely on unrealistic economic growth assumptions to justify its cost."

Nov 2, 2017|The Washington Post

Republicans break their promise on tax reform

The Committee for a Responsible Federal Budget’s Maya MacGuineas warned Thursday that the House plan would cost $1.5 trillion over 10 years, and, because of the way it is written, the price could end up being even higher. “No credible model shows that tax cuts will create enough growth to fill the funding gap,” she concluded, echoing the views of most independent experts.

Nov 2, 2017|The Hill

Debt watchdogs slam Republican tax proposal

The Republican budget allows for the tax cuts to add $1.5 trillion to the deficit over 10 years. That money would be paid for by borrowing, adding to annual deficits and the nation’s overall debt burden. 

The Committee for a Responsible Federal Budget’s President Maya MacGuineas said an additional $1.5 trillion in debt amounts to almost $12,000 per household.

“Given the huge unpaid-for gap remaining, this plan does not constitute true comprehensive, revenue-neutral, and pro-growth reform,” she said.

Nov 2, 2017|The Hill

GOP refusal to deal with spending will haunt tax overhaul

But while politicians on both sides have strong feelings about the deficit, most have precious little to say about the spending that is responsible for the problem.

The Committee for a Responsible Federal Budget has called the tax plan a “a step backwards for fiscal responsibility,” citing what it called “gimmicks” and a $1.5-trillion revenue cut to the federal government.

Nov 2, 2017|The Hill

Winners and losers in the Republican tax bill

The Committee for a Responsible Federal Budget’s President Maya MacGuineas noted that the additional debt amounted to almost $12,000 per household.

“Given the huge unpaid-for gap remaining, this plan does not constitute true comprehensive, revenue-neutral and pro-growth reform,” she said.

Nov 2, 2017|LifeZette

House Plan Keeps 401(k) Contributions Tax-Free

Marc Goldwein, senior vice president and senior policy director at the Committee for a Responsible Federal Budget, said he favored eliminating the state and local tax deduction in its entirety. But he said the compromise rolls it back substantially.

"That's still pretty significant," he said.

All of the reductions the bill makes to tax breaks total between $1.2 trillion and $1.3 trillion over a decade, Goldwein said.

Nov 2, 2017|New Yorker

Donald Trump Stands to Gain Millions from the Republican Tax Bill

How so? The measure shifts the burden of taxation in the U.S. from corporations, which are largely run and owned by rich people, to households. It cuts the top rate on “pass through” business income—the sort of money generated by sole proprietorships, investment partnerships, and S-corporations—from 39.6 per cent to twenty-five per cent. And it phases out the estate tax, which falls most heavily on the largest estates, starting in 2024. Indeed, according to an analysis by the Committee for a Responsible Federal Budget, fully three-quarters of the over-all tax cuts in the bill are directed at businesses and large estates.

Nov 2, 2017|Bloomberg

House GOP Tax Bill Estimated to Add $1.49 Trillion to Deficit

A separate report Thursday from the Committee for a Responsible Federal Budget said tax cuts for individuals would result in a net cost of $300 billion, when factoring in the repeal of deductions for state and local income and sales taxes, and limits on the property tax and mortgage interest deductions. Repealing the estate tax by 2024 would add almost $200 billion to the tab, CRFB said.

Cutting the corporate rate to 20 percent from 35 percent is estimated to cost $1.5 trillion, and allowing certain pass-through businesses to take advantage of a lower 25 percent rate would lose about $448 billion, according to CRFB. Those provisions would be partially offset by limiting corporate interest deductions, eliminating certain credits and preventing companies from moving their profits offshore.

Nov 2, 2017|Chicago Tribune

Editorial: Growth, debt and a controversial GOP tax plan

But there’ll also be warnings from those of us who have long (and often unpopular) records of urging that Washington live within its means. The nonpartisan Committee for a Responsible Federal Budget noted Thursday that a $1.5 trillion debt hike “amounts to almost $12,000 per household — a steep price passed on to our children.”

Nov 2, 2017|Huffington Post

Tax Reform Is Not For The Poor

quick analysis of the legislation by the conservative Committee for a Responsible Federal Budget on Thursday indicated that two-thirds of the bill’s $1.5 trillion cost would go to business tax cuts, and another $200 billion or so would go to extremely wealthy Americans who would no longer have to pay a tax on their estates after death. (The levy, which would gradually be phased out, currently applies only to individual estates worth more than $5.49 million.)

Nov 2, 2017|The Fiscal Times

The Republican Tax Plan: The Good, the Bad and the Controversial

Budget Hawks Call the Bill Fiscally Irresponsible: “Not only would today’s legislation cost more than $1.5 trillion over a decade, but it includes a number of gimmicks, including allowing certain provisions to expire, that could ultimately result in more than $1.5 trillion of new deficits,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in a statement. “The bill also continues to rely on unrealistic economic growth assumptions to justify its cost.”

Nov 1, 2017|CNBC

Tax plan will be a tough sell to middle class Americans: Former NEC Director

As Republicans delay the reveal of their tax plan by a day, Gene Sperling, former National Economic Council director, and Maya MacGuineas, Committee for a Responsible Federal Budget president, discuss what details they expect.

Nov 1, 2017|The Washington Post

Republicans’ tax plan so far can’t pass the laugh test

Advocates of fiscal sobriety remain skeptical. The Committee for a Responsible Federal Budget warns Americans to be on the lookout for familiar gimmicks designed to hide massive debt:

Well-designed tax reform has the potential to improve economic growth and thus generate some additional revenue from “dynamic feedback.” Advocates of tax reform have claimed such feedback could total $1 trillion or even $2 trillion. These numbers are highly unlikely and certainly should not be counted on.

In reality, dynamic feedback for a well-designed tax reform plan is more likely to produce closer to $300 or $400 billion of dynamic feedback over a decade, and debt-financed tax cuts may ultimately slow economic growth over the medium and long term and result in little net positive feedback at all.

Likewise CRFB cautions against using sunset provisions to comply with reconciliation rules. “There is a high likelihood that Congress will rely on sunsets to make a $1.5 trillion ten-year tax cut appear to cost nothing in the second decade — with the assumption that future Congresses will extend various debt-increasing tax cuts before they expire as they did with the 2001/2003 tax cuts,” CFRB explains. “Their unified framework proposed to allow corporations to immediately deduct the cost of equipment — a provision known as expensing — but proposed that this measure be in effect for ‘at least five years’ rather than permanently. In addition to undermining the growth impact of expensing, making this provision temporary obscures the cost. While five years of equipment expensing would cost $300 billion, including interest, permanent expensing would cost three times that.”

Nov 1, 2017|The Washington Post

President Trump’s tax cut: Not ‘the biggest’ in U.S. history

In other words, Trump’s tax cut would even be smaller than two tax cuts passed by Congress under President Barack Obama. We’re sure that must be a source of irritation. In fact, Trump’s tax cut would even fall behind Obama’s tax cuts when measured by inflation-adjusted dollars, according to the Committee for a Responsible Federal Budget.

Here’s a useful chart put together by CRFB, which labels the Trump tax cut as “Framework.” The group also included an estimate for a 1921 tax cut from a 2012 paper by Christina Romer and David Romer.

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