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The Future of Tax Expenditures and Entitlements in the Era of Hyper-Deficits

The Future of Tax Expenditures and Entitlements in the Era of Hyper-Deficits. Tax Colloquium Dedman School of Law Southern Methodist University March 5, 2009 by Jon Forman Alfred P. Murrah Professor of Law University of Oklahoma. Overview. The Budget Outlook Short-term

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The Future of Tax Expenditures and Entitlements in the Era of Hyper-Deficits

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  1. The Future of Tax Expenditures and Entitlements in the Era of Hyper-Deficits Tax Colloquium Dedman School of Law Southern Methodist University March 5, 2009 by Jon Forman Alfred P. Murrah Professor of Law University of Oklahoma

  2. Overview • The Budget Outlook • Short-term • 2010 Federal Budget • Long-term • Congressional Budget Office • Government Accountability Office • Fiscal Gap • Taxes and Tax Expenditures • Entitlements

  3. 2010 Budget • Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009), at 114 (table S-1).

  4. Projected Budget Totals • Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009), at 114 (table S-1).

  5. Where Does the Money Go? • U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2008), at 4.

  6. Proposed Budget Outlays • Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009), at 119 (table S-4).

  7. U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2008), at 3.

  8. Proposed Budget Receipts • Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009), at 119 (table S-4).

  9. Deficits and Public Debt • Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009), at 114 (table S-1).

  10. Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009), at 14.

  11. Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2009 to 2019 (January 8, 2009), Charts at 2.

  12. House Budget Committee, Summary of the President’s Fiscal Year 2010 Budget (February 27, 2009), http://budget.house.gov/pres_budg.shtml.

  13. House Budget Committee, Summary of the President’s Fiscal Year 2010 Budget (February 27, 2009), http://budget.house.gov/pres_budg.shtml.

  14. U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2008), at 7.

  15. House Budget Committee, Summary of the President’s Fiscal Year 2010 Budget (February 27, 2009), http://budget.house.gov/pres_budg.shtml.

  16. Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2009 to 2019 (January 8, 2009), Charts at 5.

  17. Majority Staff, Senate Budget Committee, Brief Analysis, President Obama’s FY 2010 Budget (February 27, 2009), http://budget.senate.gov/democratic/index.html.

  18. U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2008), at 2.

  19. Congressional Budget Office, Growth in Health Care Costs (January 31, 2008), Charts at 8.

  20. U.S. Government Accountability Office, Saving Our Future Requires Tough Choices Today (GAO-08-465CG, January 14, 2008), at 8.

  21. Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2008 to 2018 (January 23, 2008), Charts at 13.

  22. U.S. Government Accountability Office, Saving Our Future Requires Tough Choices Today (GAO-08-465CG, January 14, 2008), at 5

  23. U.S. Government Accountability Office, Saving Our Future Requires Tough Choices Today (GAO-08-465CG, January 14, 2008), at 6

  24. Why the Fiscal Gap? • Aging of American • Health Expenditures

  25. Jonathan Barry Forman & Yung-Ping [Bing] Chen, Optimal Retirement Age, in New York University Review of Employee Benefits and Compensation—2008, Volume II, Chapter 14 (2008).

  26. Jonathan Barry Forman & Yung-Ping [Bing] Chen, Optimal Retirement Age, in New York University Review of Employee Benefits and Compensation—2008, Volume II, Chapter 14 (2008).

  27. U.S. Department of the Treasury, Financial Management Service, Financial Report of the United States Government (2008), at 122.

  28. Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2008 to 2018 (January 23, 2008), Charts at 12.

  29. 2008 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds.

  30. The Long-Range SS Forecast(Best estimate) • In 2017, tax revenues into the trust funds forecasted to be less than benefits due that year. Interest on the reserves and the assets themselves will help pay for benefits until 2041. • In 2041, reserves are projected to be depleted. Income is forecast to cover 78% of benefits due then. • By 2082, assuming no change in taxes, benefits or forecasts, revenue would cover 75% of benefits due then.

  31. SS Unfunded Obligations(Present values as of January 1, 2008; trillions of dollars) 2008 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Table IV.B6.

  32. Congressional Budget Office, Growth in Health Care Costs (January 31, 2008), Charts at 2.

  33. Congressional Budget Office, Growth in Health Care Costs (January 31, 2008), Charts at 6.

  34. Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009).

  35. Office of the Actuary, Centers for Medicare & Medicaid Services, U.S. Department of Health & Human Services, 2008 Actuarial Report on the Financial Outlook for Medicaid 24(2008).

  36. 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.

  37. Medicare Unfunded Obligations(Present values as of January 1, 2008; trillions of dollars) 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Table III.B10.

  38. U.S. Department of the Treasury, Financial Management Service, A Citizen’s Guide to the Financial Report of the United States Government (2008), at 8.

  39. Dealing with the Recession(Various Forecasts of Real GDP) • Council of Economic Advisors, Economic Projections and the Budget Outlook (February 28, 2009).

  40. House Budget Committee, Summary of the President’s Fiscal Year 2010 Budget (February 27, 2009), http://budget.house.gov/pres_budg.shtml.

  41. House Budget Committee, Summary of the President’s Fiscal Year 2010 Budget (February 27, 2009), http://budget.house.gov/pres_budg.shtml.

  42. Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009).

  43. Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009).

  44. Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009).

  45. Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009).

  46. Key Tax Cuts in 2010 Budget(billions of dollars) • Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009), at 121-22 (tables S-5, S-6).

  47. Clearly Revenues Will Be Needed in the Future • Obama Budget • Tax Expenditures • What Is the Best Tax Base?

  48. Key Tax Increases in 2010 Budget(billions of dollars) • Office of Management and the Budget, A New Era of Responsibility: Renewing America’s Promise (2009), at 122-23 (table S-6).

  49. Top 10 Income Tax Expenditures, 2009 (Billions of Dollars) 2009 Federal Budget, Analytical Perspectives, Chapter 19, Tax Expenditures, Table 19-3

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