While the White House continues to fudge what it will give away in the upcoming budge negotiations, progressives in Congress have proposed a budget that raises taxes on the rich, cuts military spending and saves Medicare by increasing investment in it. Even Krugman in the NYT admits such a budget is workable and will not blow up the deficit.
The CPC plan essentially balances the budget through higher taxes and defense cuts, plus some tougher bargaining by Medicare (and a public option to reduce the costs of the Affordable Care Act). The proposed tax hikes would fall mainly on higher incomes, although not just on the top 2%: super-brackets for very high incomes, elimination of deductions, taxation of capital income as ordinary income, and — the part that would be most controversial — raising the cap on payroll taxes.
None of this is economically outlandish. Marginal tax rates on high incomes would rise substantially — enough to make even liberal economists slightly uncomfortable — but the historical evidence suggests that the incentive effects wouldn’t be too severe. Overall taxes as a share of GDP aren’t given, but they would clearly remain well below European levels.
Support Budget for All!
Budget of the Congressional Progressive CaucusFiscal Year 2013
The Budget for All makes the American Dream a reality again. By putting Americans back to work, the Budget for All enhances our economic competitiveness by rebuilding the middle class and investing in innovation and education. Our budget protects Medicare, Medicaid, and Social Security, invests in America’s future, and asks those who have benefited most from our economy to pay their fair share.
Our Budget Puts Americans Back to Work
Our budget attacks America’s persistently high unemployment levels with more than $2.4 trillion in job-creating investments. This plan utilizes every tool at the government’s disposal to get our economy moving again, including:
• Direct hire programs that create a School Improvement Corps, a Park Improvement Corps, and a Student Jobs Corps, among others.
• Targeted tax incentives that spur clean energy, manufacturing, and cutting-edge technological investments in the private sector.
• Widespread domestic investments including an infrastructure bank, a $556 billion surface transportation bill, and approximately $1.7 trillion in widespread domestic investment.
Our Budget Exhibits Fiscal Discipline
• Unlike the Republican budget, the Budget for All substantially reduces the deficit, and does so in a way that does not devastate what Americans want preserved.
• We achieve these notable benchmarks by focusing on the true drivers of our deficit – unsustainable tax policies, the wars overseas, and policies that helped cause the recent recession – rather than putting the middle class’s social safety net on the chopping block.
Our Budget Creates a Fairer America
• Ends tax cuts for the top 2% of Americans on schedule at year’s end
• Extends tax relief for middle class households and the vast majority of Americans
• Creates new tax brackets for millionaires and billionaires, in line with the Buffett Rule principle
• Eliminates the tax code’s preferential treatment of capital gains and dividends
• Abolishes corporate welfare for oil, gas, and coal companies
• Eliminates loopholes that allow businesses to dodge their true tax liability
• Creates a publicly funded federal election system that gets corporate money out of politics for good
Our Budget Brings Our Troops Home
• Responsibly and expeditiously ends our military presence in Iraq and Afghanistan, leaving America more secure at home and abroad
• Adapts our military to address 21st century threats; through modernization, the Department of Defense will spend less and stop contributing to our deficit problems
Protects American Families
• Provides a Making Work Pay tax credit for families struggling with high gas and food cost 2013-2015
• Extends Earned Income Tax Credit, the Child and Dependent Care Credit
• Invests in programs to stave off further foreclosures to keep families in their homes
• Invests in our children’s education by increasing Education, Training, and Social Services