Roberton Williams: Fiscal Cliffs, Deficits, and the 47 Percent
Roberton Williams: Fiscal Cliffs, Deficits, and the 47 Percent
Last-minute congressional action on New Year's Eve kept Americans from toppling over the so-called Fiscal Cliff as 2013 began. That prevented a $500 billion jump in taxes and deferred scheduled spending cuts, the combination of which would likely have pushed the economy back into recession. But Congress only forestalled other fiscal cliffs that still loom ahead.
Meanwhile, because of the weak economy, more than a decade of tax cuts, and social policy run through the tax code, nearly half of all households pay no federal income tax. And the country's historically low taxes combine with high spending to yield unsustainable budget deficits that threaten to push the national debt close to 100 percent of GDP by the end of the decade.
What taxes do Americans pay? What happened at the New Year's Fiscal Cliff? What other fiscal cliffs lie ahead? Why do so many Americans pay no federal income tax? And what can be done about the deficit? Roberton Williams is a senior fellow at the Tax Policy Center, a nonpartisan joint venture of the Urban Institute and the Brookings Institution. The Center is made up of nationally recognized experts in tax, budget, and social policy who have served at the highest levels of government. Williams has analyzed tax issues for more than two decades, as a principal analyst and then deputy assistant director for tax policy at the Congressional Budget Office and, since 2006, at the Tax Policy Center.
