CBO Director Confirms Fallacy in Administration's Tax Revenue Estimates
February 2, 2012
Questioning CBO Director Douglas Elmendorf at a House Budget Committee hearing, Rep. John Campbell (CA-48) clarifies that allowing all current tax provisions to expire will only raise revenue to account for 15%-20% of total spending. "If you wanted to get to the alternative scenario [balanced budget] and you only raised taxes on $250,000 or more [household level income], then you have to take roughly 80% to 85% of the rest of that money and get it out of spending", explains Campbell. Affirming this, Elmendorf states,"Just raising those top tax rates [$250,000+] only makes a small difference in moving the alternative fiscal scenario back toward the current law baseline."
"There's a lot of rhetoric right now saying that we can solve the deficit problem by just taxing households that bring in $250,000 or more. We can't. If you want to solve the deficit problem, then you have to either significantly reduce federal spending or you have to increase taxes on virtually everybody." - Rep. John Campbell