Fiscal Commission Report Released, Rejected
Posted by National Community Tax Coalition
The release of “The Moment of Truth,” the report of the National Commission on Fiscal Responsibility and Reform, sheds light on the future direction of the tax reform debate.
The Fiscal Commission’s much anticipated report (available on the Commission’s website or through the link below) will not be sent to Congress after the panel failed to receive the necessary 14 member votes to bring the proposal to the floor. However, despite this rejection, there is still talk in Washington of the plan serving as a base on which to build future tax reform and deficit reduction debates. While NCTC is pleased to see that several of the requests and reforms we proposed in our comments to the Commission found their way into the final report, there is still much reason to be cautious about this report as a whole. A couple of the more concerning points:
- The report relies too heavily on budgetary cuts to discretionary spending and not enough on efforts to increase revenues. As many organizations have pointed out including the Citizens for Tax Justice, a more reasonable approach would have considering approaching the plan with a 50-50 split between revenue increases and spending cuts. The substantial decreases in non-security discretionary spending proposed in the report would simply set the stage for drastic program cuts down the road as our population grows and program demand changes. As a result, many of our clients will likely bear the brunt of the loss of much needed social programs.
- Cuts to Social Security benefits will be particularly hard to swallow and appear to be another method of shifting burdens down the road. By scaling back entitlement programs, this policy would put long-term Social Security benefits in doubt and jeopardize the retirement stability of many low-income families, the majority of whom do not save or significantly under-save for retirement.
At this time, it does not appear that any urgent action will come of the proposals in the Commission’s report. It is, however, a mixed bag of well-thought recommendations that are likely to set the stage for tax reform debates in the next Congress. We encourage you to sift through the report and add comments on both the positive offerings and concerning negatives.
For additional details and highlights from the report of the National Commission on Fiscal Responsibility and Reform, please check out the Tax Policy Center’s review of the report.
By Holden Weisman, Policy Analyst