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CBO's Options for Raising Revenues and Chances in Tax Law, 1980 to 1993 1 (January 1994)

handle is hein.congrec/cbo10280 and id is 1 raw text is: 0 CONGRESSIONAL BUDGET OFFICE U.S. Congress Washington, DC 20515 Robert D. Reischauer Director CBO'S OPTIONS FOR RAISING REVENUES AND CHANCES IN TAX LAW, 1980TO 1993 A Review by the Tax Analysis Division January 1994 A review of CBO's options for raising revenues since 1980 reveals that: o Many have since been enacted into law, substantially, if not entirely. o Tax preferences that were sacred cows in 1980, such as mortgage interest deductions and deferral of capital gains taxes on home sales, seem no less inviolate today. Early on, CBO staff determined that options for raising revenues should stress certain major themes, discussing the arguments for and against and providing readers with estimates that would be updated each year of revenue increases resulting from: o Raising marginal tax rates; o Broadening the tax base by removing preferences entirely (to suggest scale) and by enacting more modest cutbacks (to inject a measure of realism); o Increasing excise taxes (on specified services or products, such as alcohol and tobacco); o Imposing broad-based energy taxes; and o Levying a broad-based consumption tax. Thus, the broad themes of current options, and even some specific options for reducing or eliminating tax preferences, are virtually unchanged since the early 1 980s. Since the passage of the Tax Reform Act of 1986 (TRA-86), however, options for raising tax rates have received relatively more emphasis than they had previously. Overall, the options have stressed that a broad-