Why Tax Revenues Must Rise
USC Law and Economics Research Papers Series No. C13-1
USC Legal Studies Research Papers Series, No. 13-1
25 Pages Posted: 16 Jan 2013 Last revised: 12 Nov 2013
Date Written: February 14, 2013
This PowerPoint presentation reviews the fiscal picture of the United States in light of the resolution of the "fiscal cliff" controversy. The presentation argues that, while long-term trends in mandatory spending (entitlements programs) must be addressed directly, any meaningful modifications of these programs of necessity will be phased in very slowly, and in the meantime the large deficits that the United States will incur must be financed. The presentation demonstrates that over a 10-year horizon (the standard Congressional budget window), further government spending cuts are unrealistic, and tax revenues must rise to finance government operations. If one rules out new taxes (VAT, carbon tax), then the most efficient sources of additional tax revenues are tax expenditures — in particular, personal itemized deductions.
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