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CBO Releases Report on Revenue Effects of 53 Potential Tax Changes

Cbo_2 The Congressional Budget Office yesterday released Budget Options (364 pages), its annual report on options for altering federal spending and revenue.  See here for its 80-page section on Revenue Options, which explains the estimated revenue effects of 53 potential tax changes: 

 

Marginal Individual Income Tax Rates

  • Option 1: Raise Marginal Tax Rates for Individuals
  • Option 2: Permanently Extend EGTRRA’s Provisions for Tax Brackets and Married Filers
  • Option 3: Permanently Extend the 5% and 15% Tax Rates for Capital Gains and Dividends
  • Option 4: Return Tax Rates to Their Level in 2002 or Freeze Rates at Their Current Level
  • Option 5: Accelerate the Repeal of the Personal Exemption Phaseout and the Limit on Itemized Deductions
  • Option 6: Replace Multiple Tax Rates on Long-Term Capital Gains with a Deduction of 42%
  • Option 7: Permanently Extend the Individual Income Tax Provisions of EGTRRA and JGTRRA
  • Option 8: Provide Relief from the Individual Alternative Minimum Tax

The Individual Income Tax Base

  • Option 9: Limit the Tax Benefit of Itemized Deductions to 15%
  • Option 10: Limit the Mortgage Principal on Which Interest Can Be Deducted to $500,000
  • Option 11: Limit Deductions of State and Local Taxes to the Amount Exceeding 2% of AGI
  • Option 12: Limit Deductions for Charitable Giving to the Amount Exceeding 2% of AGI
  • Option 13: Eliminate the Exclusion for Employer-Sponsored Dependent Care and the Child and Dependent Care Credit
  • Option 14: Include Employer-Paid Life Insurance in Taxable Income
  • Option 15: Limit the Tax Exclusion of Employer-Paid Health Insurance Premiums
  • Option 16: Include Investment Income from Life Insurance and Annuities in Taxable Income
  • Option 17: Include in Adjusted Gross Income All Income Earned Abroad by U.S. Citizens

The Tax Treatment of Income

  • Option 18: Include Social Security Benefits in Calculating the Phaseout of the Earned Income Tax Credit
  • Option 19: Substitute a Tax Credit for the Exclusion of Interest Income on State and Local Debt
  • Option 20: Tax Social Security and Railroad Retirement Benefits Like Private Pensions
  • Option 21: End the Preferential Treatment of Dividends Paid on Stock Held in Employee Stock Ownership Plans
  • Option 22: Disallow Further Deductible Contributions to Traditional IRAs, But Allow Contributions of $5,000 to Roth IRAs Regardless of Income
  • Option 23: Consolidate Tax Credits and Tax Deductions for Education Expenses

The Taxation of Business Income

  • Option 24: Integrate Corporate and Individual Income Taxes Using the Dividend Exclusion Method
  • Option 25: Set the Corporate Tax Rate at 35% for All Corporations
  • Option 26: Repeal the "Lower of Cost or Market" Inventory Valuation Method
  • Option 27: Tax Large Credit Unions the Way Other Thrift Institutions Are Taxed
  • Option 28: Repeal the Expensing of Exploration and Development Costs for Extractive Industries
  • Option 29: Repeal the Tax Credit Against Motor Fuel Excise Taxes Now Given to Alcohol Fuels
  • Option 30: Tax the Income Earned by Public Electric Power Utilities
  • Option 31: Repeal Tax-Free Conversions of Large C Corporations to S Corporations
  • Option 32: Apply the Limited Depreciation Schedule to All Business-Use Sport Utility Vehicles and Automobiles
  • Option 33: Eliminate Private-Activity Tax-Exempt Bonds
  • Option 34: Repeal the Low-Income Housing Credit
  • Option 35: Permanently Extend 50% Partial Expensing Under JGTRRA and Increased Limits Under Section 179
  • Option 36: Extend the Period for Recovering the Cost of Equipment Purchases

The Taxation of Payroll Income

  • Option 37: Expand the Medicare Payroll Tax to Include All State and Local Government Employees
  • Option 38: Calculate Taxable Wages in the Same Way for Both Self- Employed People and Employees
  • Option 39: Increase the Upper Limit for Earnings Subject to the Social Security Payroll Tax
  • Option 40: Increase Federal Employees’ Contributions to Pension Plans

The Taxation of Wealth

  • Option 41: Extend or Freeze the Estate and Gift Tax Provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001
  • Option 42: Eliminate the Gift Tax Annual Exclusion for Life Insurance Premiums
  • Option 43: Eliminate Nonbusiness Valuation Discounts Under the Estate Tax Tax

Rules for Income from Worldwide Activity

  • Option 44: Eliminate the Source Rules Exception for Inventory Sales
  • Option 45: Make Foreign Subnational Taxes Deductible Rather than Creditable

Excise Taxes

  • Option 46: Increase the Excise Tax on Cigarettes by 50 Cents per Pack
  • Option 47: Increase All Alcoholic Beverage Taxes to $16 per Proof Gallon
  • Option 48: Increase Excise Taxes on Motor Fuel by 12 Cents per Gallon
  • Option 49: Eliminate the Federal Communications Excise Tax

Taxes That Affect the Environment

  • Option 50: Impose a Tax on Sulfur Dioxide Emissions
  • Option 51: Impose a Tax on Nitrogen Oxide Emissions
  • Option 52: Reinstate the Superfund Taxes
  • Option 53: Impose an "Upstream" Tax on Carbon Emissions

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