Charles Blahous was able to simplify two points about how the new Joint Committee will deal with taxes in the Budget Control Act. I thank him for these examples.
Both the following conversations are hypothetical, designed to illustrate concepts. These are not quotes from actual Administration officials.
Question 1: What does a current law baseline mean for hypothetical tax increase proposals in the Joint Committee?
Administration: We want to let current rates expire for those earning more than $250 K.
Joint Committee: Sorry, that doesn’t score as reducing the deficit. Under current law, those rates would expire for everyone. You can include it if you want, but it won’t help you meet your deficit reduction target.
Administration: OK, then, we want to impose a new surtax on sugary breakfast cereals.
Committee: OK, that counts as reducing the deficit.