Stories pertaining to efforts to reform Federal and State tax systems to be more fair and equitable. This includes efforts to end tax breaks for corporations or the wealthy that investment in areas that expand economic growth, such as infrastructure and education. Tax reform must be done in a way that raises significant revenue, protects working families and the vulnerable and requires corporations and the wealthy to pay a fair share.
The primary goals of comprehensive tax reform should be to progressively raise sufficient revenue to make investments that will grow the economy and set us on a path for long-term deficit reduction. Low- and moderate-income Americans are already contributing to deficit reduction through the Budget Control Act spending caps and are likely to be asked to sacrifice more. Progressive tax reform is the only way that wealthy Americans can share significantly in that sacrifice.
Rather than use the 1986 tax reform as a model, we should be taking cues from our last five balanced budgets (1969 and 1998-2001), which all required above average revenue. During these years of balance, federal revenue averaged 19.5 percent of GDP, substantially higher than the previous 40 year average (18 percent of GDP) and the pre-recession level (18.5 percent of GDP). However, with demographic shifts, the desperate need for job-creating investments and the size of our current deficits, our revenue will need to be higher than even these historical levels to achieve balance.