Ezra Klein: House Progressives have the best answer to Paul Ryan

[babylonsister]

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/14/house-progressives-have-the-best-answer-to-paul-ryan/


House Progressives have the best answer to Paul Ryan


Posted by Ezra Klein on March 14, 2013 at 3:15 pm


The correct counterpart to the unbridled ambition of the Ryan budget isn’t the cautious plan released by the Senate Democrats. It’s the “Back to Work” budget released by the House Progressives.

The “Back to Work” budget is about exactly what the name implies: Putting Americans back to work. The first sentence of the budget lays it out clearly: “We’re in a jobs crisis that isn’t going away.” So that’s the budget’s top priority: fixing the jobs crisis.

The budget begins with a stimulus program that makes the American Recovery and Reinvestment Act look tepid. It includes $2.1 trillion in stimulus and investment from 2013-2015. The main policies there are a $425 billion infrastructure program, a $340 billion middle-class tax cut, a $450 billion public-works initiative, and $179 billion in state and local aid.

This is a lot of stimulus. The liberal Economic Policy Institute estimates that would be sufficient to “boost gross domestic product (GDP) by 5.7 percent and employment by 6.9 million jobs at its peak level of effectiveness (within one year of implementation).”

snip//

Investment on this scale will add trillions to the deficit. But the House Progressives have an answer for that: Higher taxes. About $4.2 trillion in higher taxes over the next decade, to be exact. The revenues come from raising marginal tax rates on high-income individuals and corporations, but also from closing a raft of deductions as well as adding a financial transactions tax and a carbon tax. They also set up a slew of super-high tax rates for the very rich, including a top rate of 49 percent on incomes over $1 billion.

But to the House Progressives, these taxes aren’t just about reducing the deficit — though they do set debt-to-GDP on a declining path. They’re also about reducing inequality and cutting carbon emissions and slowing down the financial sector. They’re not just raising revenues, but trying to solve other problems. But they might create other problems, too. Adding this many taxes to the economy all at once is likely to slow economic growth.

more...

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/14/house-progressives-have-the-best-answer-to-paul-ryan/

[northoftheborder]

1. yeah why can't the MSM talk about this plan a little instead of the stupid ignorant CPac junk.

[Blanks]

2. 49% isn't high enough.

When they get to about 90% on over $4 million; I'll know that they aren't dicking around.

That's how we paid for WWII; isn't that good enough anymore?

[TexasBushwhacker]

4. Nobody gets $1 Billion in wages

The people that get that kind of money, and a good number of the millionaires, get their millions and billions from capital gains. If they don't raise the capital gains tax from 20% for the super wealthy, they will still be paying a lower tax rate than those of us who work for wages. I would prefer a 25% tax rate for investment income over $1 Million and 30% for investment income over $1 Billion.

[Blanks]

5. Certainly capital gains tax needs raised too...

but they need to tax bankers bonuses at 90%.

I particularly think that money that comes from the FED and never gets into the economy (except for bankers) needs taxed very heavily.

[Cha]

3. thanks babylonsistah!

[muriel_volestrangler]

6. This should be front and centre on DU; it's important policy

This is what the USA needs. Comment from Steve Benen:

Keep in mind, this isn't a fiscally irresponsible budget plan or even a plan that says fiscal responsibility is unimportant. In fact, it's the opposite.

The Progressives' priorities are paid for and after an initial burst, the budget plan reduces the deficit. What about spending cuts? The CPC blueprint does that, too, but not in a way Republicans would consider satisfactory -- their budget cuts defense by more than $900 billion.
...
The actual bookend for Paul Ryan's vision is the Congressional Progressive Caucus' plan -- it's bold and unapologetic, presenting an agenda without real regard for whether folks on the other side of the aisle will find it worthwhile.

We'll never know for sure whether the public would be amenable to a vision like this. In fact, I have a strong hunch more than 99% of the population will never hear a single word about the "Back To Work Budget." But let's be clear about one thing: on Capitol Hill, when it comes to creating millions of jobs in a hurry, this is the only game in town.

http://maddowblog.msnbc.com/_news/2013/03/14/17314833-the-back-to-work-budget?lite

And Matt Yglesias:

Congressional Progressive Caucus Shows You What a Liberal Budget Looks Like

It restores Clinton-era marginal income tax rates starting at the $250,000 threshold. It establishes new income tax brackets—45 percent at $1 million, 46 percent at $10 million, 47 percent at $20 million, 48 percent at $100 million, and 49 percent at $1 billion. Capital gains and dividends will be taxed as ordinary income. The deductibility of all itemized deductions will be capped at the 28 percent rate. The estate tax will have a $2.5 million exemption and then a series of progressive marginal rates from 55 to 65 percent. The mortgage interest tax deduction for second homes is eliminated. There's a financial transactions tax. A couple of corporate income tax deductions are eliminated. There's a kind of too-big-too-fail tax on banks with over $50 billion in assets. There's a $25 per ton carbon tax.

There are also a lot of spending-side measures here. Medicare will reduce its payment rates to pharmaceutical companies down to the Medicaid level. A strong public option will bring down spending on Affordable Care Act exchange subsidies. The use of bundled payment procedures is going to be accelerated as will the Affordable Care Act state waiver process. Base Pentagon spending is reduced to 2006 levels, and farm subsidies for commodity crops are reduced.
...
The upshot is that by 2023 spending will be about 23 percent of GDP with revenue coming in at 21.4 percent of GDP, leaving for a small and prudent budget deficit of 1.2 percent of GDP. In terms of timing, the fiscal consolidation happens pretty rapidly here. You run large deficits for the next few years, but by 2015 you're already in arguably sustainable territory with a 3.3 percent of GDP deficit, and by 2016 it's all the way down to 1.7 percent.

Obviously this isn't going to be enacted and it's in that sense not a "serious" budget. But people should take it seriously. The CPC envisions America becoming a country that has higher taxes, commits a much smaller share of national output to its military, and compensates its health care providers less generously. That's not everyone's cup of tea, but it's not a wild and crazy dream. It means America would look more like the United Kingdom. Most of all it shows that the passion for reducing elgibility for Social Security and Medicare isn't driven by the laws of mathematics. It's driven by a desire to protect the military budget, keep taxes low, and keep provider payment rates high. Those are all reasonable things to want to do and you can see why people would want to do them, but you can also see why people don't want to be forced into a zero sum choice between welfare state programs for the elderly and education and infrastructure programs for the future.

http://www.slate.com/blogs/moneybox/2013/03/14/back_to_work_budget_congressional_progressive_caucus_unveils_left_wing_budget.html

This is a good budget. It preserves what needs to be preserved, cuts unnecessary spending (like ridiculous amounts on defense), and finds the new revenue where it can be afforded (the wealthy who have taken all the increases in income in the last decade), and introduces a carbon tax to make a start on discouraging civilisation-threatening climate change.

Every Congressional Democrat should be supporting this. The CPC should be applauded for producing this, and the rest of the party should be getting behind them. Please contact your representatives and tell them the real economists are in the CPC.

[WillyT]

7. HUGE K & R !!! - THANK YOU !!!

[Arkana]

8. Now this is a budget I could get behind.