- Hiding the marginal rate with phase-outs and a new 28% cap on deductions and retaining the AMT.
- Not being clear on who pays taxes - the proposed financial crisis responsibility fee will ultimately be paid by customers, shareholders and employees; the explanation should be clear about that.
- Unclear tax policy - for example, there are several international tax reforms proposed without explanation of what the goal is, why they differ from last year's proposals and how they will improve international competitiveness of US firms.
- Baseline confusion - the baseline used to show the cost of proposals assumes that certain tax cuts will be enacted; that's dishonest (even though it is referred to as "honest" budgeting.
- Hidden spending - while some spending will be frozen for three years, the spending that is buried in the tax law (special deductions, credits and exclusions) is not capped and is likely to grow.
- Nonunified budget - because some spending is in the tax law rather in agency budgets, it is hidden. For example, you can't look at the Dept. of Education's budget to see what the federal government spends on higher education because some of the federal spending is in the tax law in the form of special credits and deductions, such as the Hope Scholarship credit and its proposed larger replacement, the American Opportunity Tax Credit.
President Obama and the OMB are not the first to give us non-transparent information. I think we should though take the opportunity President Obama has opened up by stressing transparency and demand it throughout the federal budget and in presentations of data.
Any other areas of non-transparency you are aware of?
Again, here is the full article - here.
1 comment:
I think it's time that we all admitted that Obama's pledge of transparency was only a campaign pledge and is not binding for any action. With respect to other types of economic regulation it is clear that Obama is actually for less transparency.
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