A plan to increase revenue, spur economic growth and distribute the additional burden progressively
By Joe Minarik, Senior Vice President, Committee for Economic Development (CED); Member, BPC's Debt Reduction Task Force
Loren Adler and Shai Akabas contributed to this post.
In early November, the super committee held a hearing on prior deficit reduction plans. All of the witnesses, including former Senator Pete Domenici (R-NM) and Dr. Alice Rivlin (co-chairs of the Bipartisan Policy Center’s (BPC) Debt Reduction Task Force, with the agreement of all of the members of the Task Force) and former Senator Alan Simpson (R-WY) and Erskine Bowles (co-chairs of the Fiscal Commission), concluded that both increased revenues and outlay cuts will be necessary to contain the nation’s rising public debt.
Because of this fact, BPC has invested considerable time and effort in developing a fundamental tax reform package, which the Task Force believes would meet three essential criteria: increase revenue, stimulate economic growth, and distribute the additional burden progressively. To achieve all three goals, we determined that it is essential to eliminate the current preferential tax treatment of capital gains and tax them as ordinary income.