Early last Saturday morning something happened in the U.S. Senate for the first time in four years. Lawmakers passed a budget.
The Senate approved a $3.7 trillion budget that included close to $1 trillion in new tax revenue over the next decade while protecting social safety-net programs.
This comes after last week House Republicans passed a budget that would balance the federal budget in 10 years by cutting social safety-net programs. It does not raise taxes unlike the Senate plan.
So here we are with two budget blueprints that will never be law, but represent a starting point for some debate or bargain on the budget.
But with a gap seemingly so large, particularly on the issue of taxes, is there any common ground to be found?
“Very little,” Steve Forbes, chairman and editor-in-chief of Forbes Media, tells The Daily Ticker.
Forbes ran for president twice as a Republican candidate, and, not surprisingly, is critical of the Senate plan.
“The idea of putting more taxes on this economy, which is already overtaxed, is simply preposterous,” he says. “I’m glad they finally passed a budget to show where their minds were, but it’s something that is a non-starter.”
The GOP budget advocates for just two tax rates of 10% and 25%. In contrast, the Senate wants to raise new tax revenue and close various loopholes.
But on the issue of tax reform and simplifying the tax code, Forbes places the roadblock squarely at the other end of Constitution Avenue.
“If the president came out for something like flat tax or radically simplifying the tax code, getting the top rate down to say 23% or 25%, I think it would sail through Congress with bipartisan support,” Forbes argues.
Forbes, for his part, continues to advocate a flat tax, something he has campaigned on as a political candidate.
He proposes getting rid of most deductions and offering a lower rate of 17% on income over $46,000 (for a family of four).
“What it achieves is you don’t spend 7 billion hours a year filling out tax forms,” he says. “You have a low tax rate, which is an incentive to do good things like productive work, and for risk taking.”
He offers more details in the accompanying interview.
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- Budget, Tax & Economy
- Politics & Government
- Steve Forbes