Tuesday, December 4, 2012

CAP Releases Deficit Reduction Plan

  The liberal-leaning Center for American Progress (CAP), which has close ties to the Obama Administration, released a deficit-reduction proposal yesterday.

The 28-page report can be found here.  The introduction and summary can be found here.

Here is how the Wall Street Journal describes the plan:
The liberal-leaning Center for American Progress on Tuesday proposed a deficit-reduction package that calls for raising tax rates on higher earners, suggesting that the Obama administration in some cases should try to tax the wealthy even more.
The plan, by a group that includes former Clinton administration and Obama officials, called for returning the top individual rate to 39.6%–the same top rate being pushed by the White House. The think tank also proposed taxing dividends as ordinary income, matching a White House proposal for ending the current 15% preferential rate. On Capitol Hill, many Democrats are uncomfortable with that approach, which would result in a near-tripling of dividend tax rates for the highest earners.
In two key areas the group went beyond the Obama administration, calling for higher capital gains and estate taxes than what the White House has proposed. On capital gains, the Center for American Progress proposed a 28% rate, the amount that some liberals believe is the amount that would generate the most revenue for the U.S. Treasury.
Slate has a good summary of the report.  Here is what The Hill says.

Authors of the proposal include:
  • Roger Altman
  • William Daley
  • John Podesta
  • Robert Rubin
  • Leslie Samuels
  • Lawrence Summers
  • Neera Tanden
  • Antonia Weiss
Here is Reuters analysis of the proposal:
It is unclear what sort of impact the proposal will have on the tense negotiations. It is certain to fall flat with Republicans, who have called Obama's first offer an insult.