A Rose by Any Other Name: Clarity on Tax Hikes
Fiscal policy debates are loaded with emotion and complex terminology: thus, it is vital to hold tightly to a few simple concepts that clarify the debate. One is the definition of a tax increase. A tax hike occurs when, as a consequence of a change in the tax law, total tax receipts are projected to be higher than they would be under current policy using traditional quasi-static scoring employed by the Treasury Department and by the congressional Joint Committee on Taxation. Even some conservatives have said they oppose tax hikes “in principle” but still insist that tax hikes be on the table to foster a debate on basic reforms. As a negotiating strategy, this approach is unwise. The problem is spending. That is where the debate needs to start, and that is where it should end.