AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (5 comments)

  1. I agree with Yuval. Wanting is not the same as getting. I don’t see a majority in either house voting for middle class tax increases at this point. Obama campaigned exclusively on taxing the rich. Now that is done, it seems like it would be politically very difficult to go back for more.

  2. Item #2 above – I can see how someone can make that assumption…since the US is stagnant and has extremely little to no economic growth you could raise taxes rates to 70% and you would still have extremely little to no economic growth. I guess the estimator never included negative growth due to increased taxes?

  3. Jon Murphy

    Revenue at 21.6% of GDP in 2021? 24.1% in 2035? Man, that is just some bad forecasting right there.

    I wonder how they justify a forecast where revenue is at unprecedented levels.

  4. Jon Murphy

    Question:

    Let’s take the statement that the CBO is over-estimating Medicare costs going forward at face value. Assume that is absolutely, 100% correct.

    My question is: why is that a bad thing? Shouldn’t we plan for higher spending?

    It seems to me that if one plans for higher costs, then, if those costs come in below what he was planning on, he has some extra cash. Conversely, if costs come in greater than what he planned, he needs to scrounge up some extra cash.

    1. SeattleSam

      Congress never plans for higher costs because if they did, they would never get the spending passed in the first place. In 1965, Congress created Medicare by asserting that costs in 1990 would be $9 Billion. They were, of course, almost 8 times that projection. Had they owned up to a $67 billion projection, they could never have passed the bill. Honesty doesn’t pay when you work in Congress.

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