Joshua H. Pinkham
08 March 2013
Tax Revenues: The Toomey Plan
For the past few years, the United States has been running on a budget deficit of historic proportions. By spending more than it is earning in tax revenues. To fund this deficit, the United States has to go into more debt, making Congress impose a limitation on how much the government can borrow. When the United States elected Barrack Obama, the nation thought the deficit would soon be reduced. Obama had vowed to cut the deficit in half by early 2009, but since then, he has continuously cut taxes and increased spending, which in return increases the amount of debt for the nation. Since the United States is still unable to find a way to increase its revenues, the nation’s super committee will soon have to make a decision on how to achieve its reduction goal of 1.2 trillion dollars.
With this in mind, Congress should use the most recent Republican proposal, the Toomey Plan, to raise revenues to reduce the country’s debt. The Toomey Plan will dramatically reduce the deductions and any credits wealthier taxpayers can claim to reduce their tax liability. Stephen Ohlemacher discusses in the Bloomsberg Businessweek that the GOP plan would raise taxes by 290 billion dollars over the next decade, which would limit deductions for mortgage interest, charitable donations and state and local taxes as a part of the deficit-reduction deal. Ohlemacher points out that some workers might see their employer-provided health benefits taxed for the first time in history. However, he does point out that aides are still cautioning how the Toomey plan is still somewhat fluid (Ohlemacher). With these drastic reductions, the United States will be able to generate revenue to both permanently reduce marginal rates for all taxpayers and provide more than 250 billion dollars for deficit reduction (Kyl). While these limitations on tax breaks on people who itemize their deductions would raise revenues,...