The IMF, which often requires fiscal prudence among its borrowing countries, recommended a series of options to lower deficits, including reducing some longstanding tax deductions and exemptions that it said were “poorly targeted.” These include tax exemptions for the value of employer-provided healthcare plans and capital gains on the sale of a primary residence, and deductions for mortgage interest and state and local taxes - breaks that add up to about 1.4% of U.S. GDP per year.
The U.S. should consider closing the “carried interest” provision under which investment partnership income can be taxed at lower capital gains income rather than normal income, the IMF said. It added that corporate tax rates should be raised and the corporate tax system shifted to a cash flow tax.
The IMF also recommended raising federal excise taxes on gasoline and diesel, which have not been raised since 1993.
On the expenditure side, the IMF recommended indexing Social Security benefits to the chained consumer price index and subjecting earnings greater than $250,000 a year to payroll taxes.
So kind of a mix of good and bad. But raising corporate taxes was one thing. A lot more reasonable than I was expecting.
On the corporations, right?
Right?
Their proposals are in the article
So kind of a mix of good and bad. But raising corporate taxes was one thing. A lot more reasonable than I was expecting.