Describe and contrast the deficits projected

Reference no: EM13176367

In March and August of each Year, the Congressional Budget Office (CBO), the independent analysis arm of Congress, publishes "An Update to the Budget and Economic Outlook". These documents look out at the following decade to determine the impact of existing tax and budget policies on the government's fiscal health and on the economy.

The body of the report includes substantial discussion of the implications of budgets being enacted under current law, which includes the expiration of various provisions of the so called 'Bush era tax cuts' and the compromise agreed upon by the current congress to extend the debt ceiling (Budget Control Act of 2011 -Public Law 112-25), which are set to take effect in January 2013. (These are the so called "Fiscal cliff" provisions)

To illustrate the consequences of possible changes to current law, the CBO also produced alternative projections under the heading "An Alternative fiscal scenario." This work incorporates the following assumptions: that all expiring tax provisions are extended indefinitely ( except the payroll tax reduction in effect in calendar years 2011 and 2012) and that the Alternative Minimum Tax is indexed for inflation after 2011. The scenario also extends other provisions in current law that are set to expire.

ASSIGNMENT

Read the CBO report "An Update to the Budget and Economic Outlook: 2012-2022" and answer the following questions. Be sure that you are able to differentiate the reports "Baseline Projections" from the "Budget Projections under Alternative Scenarios." Limit your responses to each question to one short paragraph.

1. Using the tax evaluation criteria for economic efficiency and equity discussed in class, evaluate the effect of the expiration of the tax rate deductions, expanded deductions and expansion of tax credits described in the report.

2. Describe and contrast the deficits projected under the baseline and alternative fiscal scenario (summarized in Table 1-6) and the implications of the projections based on the CBO report.

3. What is the Alternative Minimum Tax (AMT) and what is its purpose?

4. What does indexing the AMT for inflation do for the revenue raising capacity of the income tax?

Reference no: EM13176367

Questions Cloud

What is the equilibrium constant for k2cro4 : What is the equilibrium constant for K2CrO4 and what is the equilibrium constant for K2Cr2O7?

Calculate script e values for the following cells : Calculate script e° values for the following cells. Which reactions are spontaneous as written (under standard conditions)? Balance the reactions. Standard reduction potentials are found in the table

Best suited economy for handling a crisis of epic proportion : Describe and explain why a socialist system might be the best in responding to the needs of people struck by an emergency situation like the earthquake that occurred in Haiti in January 2010.

What would be the electron configuration of the elements : What would be the electron configuration of the elements: 2NaOH(aq) + CuCl2(aq) yields 2NaCl(aq) + Cu(OH)2 (s)

Describe and contrast the deficits projected : Describe and contrast the deficits projected under the baseline and alternative fiscal scenario and the implications of the projections based on the CBO report.

What are the pka values of the various groups on the peptide : Draw the following peptides, AND indicating the amide bonds that are formed through the side chains. What are the pKa values of the various groups on the peptide?

Prepare the requirements using the fifo method : Write one page single space, comparing these two methods: key differences, and recommends which method should be used for this company and why.

State and draw a titration curve for both of these peptides : Draw a titration curve for both of these peptides. Be sure to label the axes properly, indicate the pKa values, the equivalence points and the buffering regions

Find the vapor pressure of a solution : Find the vapor pressure of a solution that contains 218 g glucose in 460.0 mL of water at 30 degrees Celcius.

User Account

All Pages